Employers project a 9.2% increase in healthcare costs in 2025, with the percentage jumping to 10.3% among small businesses. At the same time, nearly 6 in 10 Americans lack the savings to cover a $1,000 medical bill without relying on credit cards or loans.
Caught between cost constraints and the desire to support employee health and financial stability, employers face difficult decisions, including redesigning medical plans, increasing deductibles, and shifting more costs to their workers. In this environment, benefits consultants and advisors play a critical role in positioning supplemental health benefits as a strategic and necessary method to balance cost control and care.
“Supplemental health benefits have long provided an effective strategy for employers to expand their benefit offerings without increasing their health insurance spending,” says John Feeney, Vice President of Group Sales and Market Development at Renaissance Life and Health Insurance Company of America. “Now, there are opportunities to be more creative in providing solutions that help employees use and optimize their supplemental health benefits to manage increasing medical coinsurance and out-of-pocket costs.”
As supplemental health benefit strategies evolve, advisors are well-positioned to help employer clients explore fresh approaches in three key areas: balancing cost control with financial protection, simplifying benefits delivery, and selecting carrier partners and tools that align with workforce needs.
Balancing costs and care
More than half — 51% — of private industry workers were enrolled in high-deductible health plans as of 2023, shifting more upfront costs to employees. As a result, more employers – and employees – are considering supplemental health benefits as more than a nice-to-have voluntary add-on.
“Supplemental health plans fill a critical financial gap for employees,” Feeney says. “We’re seeing more interest from employers in funding these benefits – in full or in part – as a way to encourage employees to enroll in the coverages and effectively manage rising out-of-pocket expenses tied to coinsurance, deductibles, and uncovered treatments.”
When employees have a safety net for unexpected healthcare costs, they’re more likely to access care and reduce financial stress. For employers, that can translate into improved workforce well-being, increased productivity, and a better return on their overall benefits investment. To meet rising expectations, insurance carriers are rethinking how supplemental health benefits are structured and delivered.
Innovation drives simplicity
Supplemental health benefits provide optimal value when employees understand, enroll in, and use them. Insurance carriers are applying creativity to enhance and simplify employee experiences from product design through enrollment and claims.
Advancing technology also elevates employee expectations for ease and personalization. In response, carriers have adapted their processes and service models to integrate mobile app access, personalized decision-support tools, and streamlined claims payments.
Simplified claims submission and rapid payments can also enhance the value of supplemental health coverage by delivering the lump-sum payments to employees as they navigate out-of-pocket expenses.
Carrier innovation extends to the supplemental health benefits themselves. Renaissance recently launched RenSecureHealth, which pays cash benefits for over 13,000 injuries and illnesses, with no accident or hospitalization requirements, for groups of five or more.
“RenSecureHealth is an innovative supplemental health insurance product designed to ease the financial impact of unexpected medical expenses and is built for the consumer,” Feeney adds. “The benefit payments are based on ICD-10 diagnosis codes rather than an accident or hospitalization incident. And payment to a member for a covered diagnosis is typically made within 72 hours."
A pivotal role for brokers
As trusted advisors, benefits brokers and consultants play an increasingly vital role in helping employers evaluate supplemental health options to address specific coverage gaps, budget challenges, and employee protection needs.
Recommending the right products and insurance carrier is about more than pricing. Advisors must also weigh product flexibility, the service model, and technology platforms. Enrollment tools and education are critical to driving employee engagement and participation in these products.
To ensure employers deliver meaningful financial protection — without overspending or overcomplicating — Feeney recommends brokers look for supplemental health carriers that offer:
- Broad product portfolio that offers additional protection to employees and their families (Life, Voluntary Life, Short-term Disability, Long-term Disability, Dental and Vision insurance)
- Flexible funding options and benefit categories
- Guaranteed-issue coverage with no pre-existing exclusions
- Accessible mobile-friendly tools and fast, digital claims processing
- Knowledgeable account service teams for employers and employees
As healthcare costs rise and financial pressures mount, supplemental health benefits are an essential element of employee benefit programs. With strategic design, simplified delivery, and expert, personalized guidance, these benefits help employers provide meaningful financial protection without increasing their benefits budgets.
Explore how Renaissance Benefits helps you and your clients create benefits strategies that stand out: RenaissanceForBrokers.com.
Ann Clifford is a freelance writer who translates her background in financial services marketing into specialized content focused on employee benefits and small business topics.
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