Healthcare costs continue to climb, and many Americans are living paycheck to paycheck, making a disabling condition or injury that can keep them out of work financially devastating. In searching for ways to cover that “critical exposure,” says Meredith Ryan-Reid, senior vice president of Accident and Health for MetLife, accident and critical illness coverage can help. The most important way to drive access to those benefits is for brokers to ensure employer clients provide more decision-support tools at the time of plan enrollment, she says.
“We also see a direct correlation in the number of employees who select these products when they have an integrated tool to see how the benefits will work for them,” Ryan-Reid says. “If [employees] move to a high-deductible plan, they’ll save on premium and use some of that premium savings to invest in a CI, an accident plan. That’s one of the most effective ways we see the supplemental health products being communicated.”
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Brokers can also help employers drive enrollment in voluntary benefit coverage for benefits like accident and disability by evaluating their demographics. If there’s a mix of white- and blue-collar workers, their needs may not be universal, but their coverage should be. Plan affordability is also an area on which employees may be willing to compromise in exchange for more personally tailored coverage.
Affordability factor
“Employees want more and more choice, and they don’t mind paying a little more for it, provided it’s right for them,” Ryan-Reid says. “It’s very important to them that they have the education and the offering from their employer.”
Affordability isn’t necessarily a hurdle, either, says Kathy Plummer, director of product development for Unum. For a plan where employers bear the full cost, per-person short-term or long-term disability coverage might hit $245 per person per year; voluntary plans can range from $300-$330 per person per year, on average, she says.
“I think the hurdle for us is that there’s perception out there that it costs a lot more than that,” Plummer says. “We do know that most employees are willing to pick up the cost for $30 a month or less if it protects their income.”
Nonetheless, she says, “We haven’t changed our penetration rate for a number of years as an industry.”
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“There are a great number of employees out there who still don’t have STD and LTDI coverage,” Plummer adds. “It’s probably in the 50-55%; as an industry, that’s something we are very focused on. How do we get more employers and brokers comfortable with offering disability coverage?”
Steve Hesler, assistant vice president of product and market development at Colonial Life, says that voluntary coverages “performed well through 2015, with accident products performing especially well,” mostly because such products are “easy to understand and position.” Beyond their ease of communication, voluntary coverages fill gaps left in high-deductible health plans, and “help release some cost pressure” from employers.
“As accident products continue to evolve over the next few years, I expect we will see them continue to become more flexible to better complement the evolving health insurance market,” Hesler said.
