Voluntary Benefits can Offset Employees’ Financial Consequences of
Medical Emergencies and Major Illnesses
Mathew A. Matarrese, SVP Combined U.S. Agency
Mr. Matarrese is responsible for driving the sales growth strategy for Combined Agency Distribution through agent recruitment, sales production, professional development, and building and maintaining client relationships. He joined Combined Insurance in 2018 after holding sales leadership roles at Aflac and Colonial Life. Mr. Matarrese, who started his career as a sales agent, is licensed in Accident/Health and Life Insurance and holds a bachelor’s degree in Business Administration from the University of Wisconsin at La Crosse.
It’s no secret that the rising costs of healthcare are a persistent concern for both employers and employees. Corporate and individual healthcare consumers are exploring new ways to manage costs through worksite insurance vehicles, various savings strategies and even crossed fingers that a medical-related financial crisis “won’t happen to us.” As competition for talent tights up, it is more important than ever that employers offer an attractive, well-rounded benefits package.
Preparing for the inevitable?
Unfortunately, unexpected medical events—and their related costs—happen every day. And they happen to people from every walk of American life. But one thing is for sure: simply having major medical insurance usually isn’t enough to prevent your employees from having problems paying medical bills. If they’re involved in an accident or are diagnosed with a serious health condition, they may be faced with some difficult financial choices that can significantly impact their lifestyles.
Offering voluntary healthcare insurance plans is an increasingly popular and low-cost way for employers to help employees protect themselves against the unexpected. You may already appreciate the value of these plans—and you may already provide your employees with access to some combination of worksite products, from accident to cancer and critical illness coverage. But have you explored the real impact that a serious medical event can have on your employees’ livelihood?
Let’s review the facts in the U.S.:
· Cancer now tops heart disease as the No. 1 cause of death.1
· The American Cancer Society estimated 1.9 million cancer cases diagnosed and 608,570 cancer deaths in 2021.2
· 659,000 people in the United States die from heart disease each year—that’s 1 in every 4 deaths.3
· There are 136 million hospital ER visits every year.4
· The average hospital stay in the U.S. costs $5,220 per day.5
· National health spending is projected to grow at an average annual rate of 5.4 percent for 2019-2028 and to reach $6.2 trillion by 2028.6
Major medical policies aren’t designed to cover everything. They don’t cover non-medical expenses, for example, and most don’t start paying benefits until the insured meets cost-sharing requirements. Getting diagnosis and treatment for a serious illness or getting into an accident can result in a sudden, unexpected need for cash to cover:
· Deductibles, coinsurance and co-payments
· Treatments or care not covered by medical insurance, such as alternative therapies or care received from an out-of-network provider
· Transportation to and from care facilities
· Childcare and pet care
· Household bills like rent, utilities, tuition and loans
· Lost income due to time off work to recover or care for a family member
· Financial consequences, financial facts
Meeting medical and non-medical obligations can be a real challenge for your employees without adequate supplemental insurance coverage, let alone major medical insurance or family savings. Now, let’s look at some pertinent findings from the Commonwealth Fund Biennial Health Insurance Survey, 2020:7
· 43.4% of U.S. adults ages 19 to 64 were inadequately insured.
· Half of adults who spent any time uninsured or who were underinsured reported problems paying medical bills.
· People who had trouble paying medical bills experienced lingering financial problems including damage to credit ratings.
· People with incomes below the federal poverty level (ex. $16,971 for an individual and $34,846 for a family of four) reported uninsured rates that were three times higher than adults with incomes at 400% of the poverty level or higher (ex. $51,040 for an individual and $104,800 for a family of four).
· 25% of adults in an employer plan are underinsured
· Share of privately insured adults with deductibles of $1,000 or more has doubled since 2010
· Deductibles have grown faster than income, taking up larger shares of household budgets, leaving more people underinsured
· Adults who look for but do not buy plans in the individual market or marketplaces cite affordability
What these findings show is that medical expenses negatively impact the financials of everyone, even those with insurance. As an employer, you can help your employees ensure their needs are met by offering a comprehensive healthcare benefits package with access to supplementary insurance products that protect their pocketbooks.
1 - Howard, J. (2019, September 3). Cancer now tops heart disease as the no. 1 cause of death . CNN. Retrieved December 26, 2021, from https://www.cnn.com/2019/09/03/health/leading-cause-of-death-cancer-heart-disease-study/index.html
2 - Cancer facts & figures 2021. American Cancer Society. (n.d.). Retrieved December 26, 2021, from https://www.cancer.org/research/cancer-facts-statistics/all-cancer-facts-figures/cancer-facts-figures-2021.html
3 - Centers for Disease Control and Prevention. (2021, September 27). Heart disease facts. Centers for Disease Control and Prevention. Retrieved December 26, 2021, from https://www.cdc.gov/heartdisease/facts.htm
4 - Emergency room visit statistics: The emergency center: ER. The Emergency Center. (2021, October 22). Retrieved December 26, 2021, from https://www.theemergencycenter.com/emergency-room-visit/#:~:text=Injuries%20Are%20One%20Of%20The,those%20visits%20relating%20to%20injuries.
5 - SingleCare Team | Updated on Aug. 18, Team, S. C., & Team, S. C. (2021, August 18). 2021 medical debt statistics. The Checkup. Retrieved December 26, 2021, from https://www.singlecare.com/blog/medical-debt-statistics/
6 - Nhe fact sheet. CMS. (n.d.). Retrieved December 26, 2021, from https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet
7 - https://www.commonwealthfund.org/publications/issue-briefs/2020/aug/looming-crisis-health-coverage-2020-biennial