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McKinsey & Co. caused quite a stir not only around the insurance world, but all the way to Washington, when it recently revealed that 30% of employers will “definitely or probably” drop their coverage when the Patient Protection and Affordable Care Act takes effect in 2014.
While the exact percentage of employers keeping or dropping their coverage in three years remains to be seen, voluntary programs will be valuable to employers and employees alike in either situation.
For example, high deductible options such as HSAs continue to grow in utilization and due to escalating premiums, an employer electing to continue its medical coverage will probably opt to offer an HDHP over a more traditional HMO or PPO plan design.
Similarly, it stands to reason that employees who are sent to the exchanges to purchase their own coverage will be more likely to choose an HDHP to obtain a lower individual premium.
In both instances, voluntary programs like disability, critical illness, cancer and accident insurance can increase employees’ comfort level by providing additional benefits to help them cover their deductible, coinsurance and other out-of-pocket costs.
And, by providing voluntary programs with special underwriting concessions that employees could not otherwise obtain on their own, employers will demonstrate their concern for their employees’ well-being. This may be even more important after reform takes effect if employers have drastically reduced or dropped their benefit programs altogether.
There is still much to be determined when it comes to healthcare reform and its impact on employer-sponsored benefits. However, signs point to significant opportunity for voluntary benefits growth in 2014 and beyond. One encouraging sign is more carriers are beginning to offer voluntary benefits, so they must see the potential for these programs in the age of healthcare reform.
And so do I.
Mantz is vice president of sales at The Farmington Company, a national provider of benefits communication and voluntary benefits services.He can be contacted at email@example.com or800-621-0067, extension 6703.
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