new options being offered by employers
Recently, MetLife conducted independent surveys of people of people 25-55 years old to study the level of critical illness awareness and the impact critical illnesses have not only on an individual but on their families as well. There are two types of financial impact: Medical and Non-medical. Co-pays, out of network doctor visits and prescriptions fall into the first category, while travel, modifications to the home or vehicle and home maintenance are considered non-medical.
The financial impact can range from significant to devastating. Inside this category, lost income is a major factor, with an average burden of over $35,000 per family. Non-covered out-of-pocket medical expenses average approximately $5,000 per household with an additional $1500 in non-medical expenses. This proves to be quite a burden to most households and can have a shattering financial impact. Most household would not be able to tolerate such losses.
Reducing costs, not benefits
With the economic crisis in a very slow recovery, employers are constantly seeking ways to reduce some of their benefit costs and lobby for higher deductibles. Critical illness insurance coverage is vital to employees, and more employers are responding by offering optional critical illness policies. This typically benefits both employer and employee. For the employer, it can mean reduced premiums. For the employee, this insurance option fosters a good working relationship, even if they have to pay the premiums, knowing that their employer has their best interest at heart. Additionally, they can customize their policies and purchase only the coverages needed.
Who benefits and how
There are several side benefits to offering these optional policies in the workplace. With the information overload resulting from the Affordable Care Act is compounded by health insurance customer service representatives not are totally comfortable or familiar with the new nuances of their company's revamped policies, adding to the confusion. In addition, employers are experiencing difficult times trying to explain all the benefits. When enrolling in these optional policies, employees receive the benefit of a consultation by an insurance representative and are coached on a one-on-one basis in order to ensure they are buying only the coverages they need. As a result, employees have indicated they are much more appreciative and willing to consider this guidance when purchasing such a policy. Everyone benefits when confusion is eliminated and both employee and employer receive clear information and confidence is restored.
The on-boarding process is typically quick and simple. A bonus benefit with this type of policy is the ability to receive lump-sum payments for certain catastrophic illnesses, eliminating the need to file claims. This not only helps a person improve their quality of life at this stage in their life, but also eases some of the financial burdens. Employees have also indicated they would be willing to pay as much as $200 a month for critical illness insurance premiums, considering the astronomical costs of medical treatments and the fact that they would not have any other way of paying.
Employee/ Employer Buy-In
Employers are coached extensively and are guided on how to promote this type of benefit to their employees. These steps included showing them how to add the offer to the initial benefit package for new hires, how to offer the coverage as an additional option to health and disability coverages at renewal and how to offer communication options for employees with questions. The training includes guidance on how to offer and discuss critical illness cost information as part of an employee's financial package.