"Do you own and understand hospital indemnity insurance?"

That was the question we asked employees in a survey earlier this year. Surprisingly, just two percent of respondents said "yes."

I say "surprisingly" because I sensed there was a gap—a lack of education among the employee audience around hospital indemnity insurance—but, wow, two percent! That's a full 98 percent of the market that not only doesn't own hospital indemnity insurance, but also doesn't fully know what it is and how it can help them.

Again—wow.

But, that number also represents a big opportunity for benefit managers and HR teams to better educate employees.

One of the easiest areas to tackle is the language we use for hospital indemnity insurance. With a word like "indemnity" in the name, you're headed for a breakdown in an employee's understanding right from the start. It's up to carriers and people who work with benefits every day to find ways to communicate with employees in language they understand.

Aside from the language we use, employees have to have a framework to understand the product. So, let's start here: Why do your employees need hospital indemnity insurance?

For starters, to help reduce financial risk. Let's face it: hospital stays can be taxing on anyone; not only from a health point-of-view, but financially as well. For example, did you know that medical bills are considered the largest cause of people filing for bankruptcy? And, for good reason. ER procedures can cost as much as $18,0002. Heart-attack recoveries can add up to over $20,0003. These are big numbers that can quickly grow even bigger; leading to significant out-of-pocket expenses. A single hospital stay could quickly chew through the entire deductible and out-of-pocket maximum on an employee's medical plan.

Hospital indemnity insurance can help reduce this risk and make hospital stays far less cost-prohibitive. But its benefits extend well beyond financial well-being.

In that same survey I mentioned above, employees told us hospital indemnity insurance gives them peace of mind and is good to have in case of emergency. So clearly, there are emotional benefits to carrying this insurance, too.

But again, only two percent of employees own and understand what hospital indemnity insurance is. So, there's a big opportunity to educate and convince employees that hospital indemnity insurance is a valuable addition to their medical coverage.

Here are the three key points I'd focus on as you talk with employees:

Strategy 1: Appeal to emotions; don't just give them facts.

Of course employees will want to understand how hospital indemnity insurance works and related costs, but we have found through our research that employees respond and act based more on emotional cues than factual ones. Our research found that 40 percent of employees said the primary reason they enrolled in benefits was "It's important to have peace-of-mind." They're clearly making choices with their hearts as well as their minds.

Whether it's loved ones traveling to visit you, concern about child or pet care as well as the understandable amount of stress and uncertainty, a hospital stay has every bit as much of an emotional as a financial cost. Frame hospital indemnity insurance as the protection from that burden for policyholders and their families; it's the peace of mind they need in difficult times.

Strategy 2: Talk about how hospital indemnity insurance can fill gaps left in medical insurance.

No matter how great of a medical plan an employer offers, that doesn't mean hospital stays can't be expensive! Hospital stays routinely cost employees more than $1,000 in out-of-pocket expenses4. That's a pretty sobering statistic when you consider that 6-in-10 Americans don't have $500 in savings5. Even with the best medical policies, there are still gaps in coverage. But, many employees don't realize those gaps exist, or how large they are, until it's too late. Be sure to talk about the risks now—and how hospital indemnity insurance can help manage them.

Strategy 3: Focus on the long-term financial risk.

The biggest risk to employees is the potentially life-changing costs associated with longer hospital stays. Now, many employees are, understandably, price-conscious. They're usually resistant to adding more coverage. So, talk about the cost-benefit equation. Yes, hospital indemnity insurance comes with a cost—but, without it, employees can end up owing tens of thousands of dollars after a lengthy hospital stay. Those are bills that can impact an employee's financial situation for years. Make sure employees know the financial ramifications of longer hospital stays—because they are significant.

Fact: hospital indemnity insurance is not easily understood by employees. But, it's a topic (and benefit offering) that's worth discussing with employees given the emotional and financial impact it can have on their lives. Work with a carrier who can help you have that conversation and, this open enrollment reason, make a point to help educate employees about how hospital indemnity insurance can help reduce financial risk and give employees peace of mind. You just may end up making a big difference in an employee's life.

Christin Kuretich joined Trustmark in 2009. As senior director of product and innovation for Trustmark's accident and critical illness insurance products, she is responsible for researching marketplace trends and assessing the voice of the customer in order to create new product solutions for customers.

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3 ways to help employees get smarter about the benefits of hospital indemnity insurance

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