Every year around this time, benefits brokers get word of LIMRA’s most recent data on voluntary benefits sales.

Last year, the consulting group reported a fourth straight year of brisk growth in the voluntary market. Nearly all lines did well, with vision, critical illness, and accident insurance leading the pack.

But new research on the financial hardship faced by insured Americans suggests that growing adoption of voluntary benefit options may still be lagging behind consumers’ needs, notwithstanding years of improved sales.

For proactive brokers, this lag means plenty of opportunity. Data shows that more employers than ever are seeing workers suffer under the reality of mounting out-of-pocket costs while high-deductible plans continue to become the norm.

The key is in knowing the current environment – and how to position voluntary benefits as the solution.

One in five insured workers struggle with medical debt

A decade’s worth of cost-shifting has helped underscore the value of voluntary products, as out-of-pocket costs for enrollees in all types of workplace health care plans have skyrocketed even as health care costs and premium inflation has leveled.

In 2015, the average single-coverage deductible for all plan types was $1,318 -- a steady increase since 2012, when the average first eclipsed the four-figure threshold.

Last year’s average is about a 125 percentage increase over 2006, when the average single-enrollee deducible was $584 across all plans, according to the Kaiser Family Foundation’s 2015 Employer Health Benefits Survey.

By another measure, out-of-pocket costs have increased nearly three times as fast as premiums in the past decade.

In January, Kaiser and the New York Times released results from a survey detailing just how rising costs are affecting American workers. A sampling of more than 2,500 respondents revealed an emerging trend: Medical bills are taking a toll beyond the ranks of the uninsured.

Among the insured in the survey, one in five reported struggling to pay medical bills in the past year.

For many, this created real financial strain. Two-thirds exhausted their savings to cover bills, and more than 40 percent said they took on an extra job or worked more hours to avoid plunging into further debt. Other insured workers reported loading up credit cards and borrowing from retirement plans to cover medical debt.

Perhaps most distressing: More than one-third of covered workers claimed medical bills prevented them from covering basic expenses like food and housing.

The most common sources for these bills? Claims denials and out-of-network care – the expenses of which topped $5,000 for about 25 percent of insured respondents, according to the Kaiser/Times study.

Gap coverage trails out-of-pocket inflation

The Kaiser/Times study showed that 39 percent of those struggling with medical expenses had coverage through a workplace plan. While the precise types of plans and coverage were not broken out, the study did identify what it classified as high-deductible plans ($1,500 for an individual, $3,000 for a family).

Nor did the study track the prevalence of such savings options as HSAs or respondents’ experience with worksite voluntary products like critical illness.

So, could affordable savings plans and voluntary options help reduce the number of insured Americans struggling to pay out-of-pocket medical bills?

Benefitfocus, a cloud-based benefits platform used by more than 700 large employers, may have the answer to that question.

In its recent inaugural report on the state of employee benefits, data mined from the firm’s participant base shows that neither employers nor workers are using voluntary benefits as much as they could.

Only 36 percent of large employers offer just one voluntary option. And only 8 percent offer a package of critical illness, hospital indemnity, and accident insurance.

When such coverage was available, only 14 percent of employees enrolled in one voluntary product; just 1 percent enrolled in three.

The slow adoption of voluntary coverage comes as more employers offer high-deductible plans. Pricewaterhouse Coopers says 25 percent of employers are now offering high-deductible plans as the sole option for workers. And Benefitfocus says 52 percent of large employers now offer a high-deductible plan as an alternative to a traditional plan. When given the choice, 41 percent of employees choose a high-deductible plan.

Yet doing this may result in more insured Americans’ exposure to out-of-pocket duress, as the average deductible for family plans can swell beyond $4,000.

Herein lies the opportunity to communicate the value of voluntary benefits – a task that is not without its challenges, according to Benefitfocus’ researchers.

“We have a long way to go,” they said.

Instant Insights /

Is voluntary adoption lagging behind consumers&rsquo; needs?

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Is voluntary adoption lagging behind consumers’ needs?