As the coronavirus pandemic continues, employers and carriers are taking a closer look at voluntary benefits, especially critical illness (CI) and hospital indemnity (HI) insurance. These benefits can help address employees’ increased need for financial protection should they face a severe health threat by providing cash benefits that can be used to help cover deductibles, co-pays and other expenses that medical insurance may not. The cash benefits can also be used for any other cost of living expenses, such as a mortgage, rent or groceries. With an average cost of more than $2,500 per day for inpatient hospital care,1 these benefits can provide important financial support when it’s needed most. In addition, these evolving coverage options can offer financial protection for unique health risks and challenges raised by the COVID-19 virus, such as rising mental health needs.
Employee Benefits Education Is Vital
The Hartford’s 2020 Future of Benefits Study showed strong interest in these benefits among employers and employees. As of June 2020, of employers who don’t currently offer these benefits, 50% indicated they were likely to offer critical illness insurance, with 48% likely to offer hospital indemnity in the future. This is an increase in interest from 35% and 34% just three months earlier in March. Additionally, employees who don’t currently have access to these benefits expressed strong interest in both critical illness (60%) and hospital indemnity (50%).2
Although employees show an interest in having access to these products, many say they are unfamiliar with both critical illness and hospital indemnity insurance. This demonstrates a clear need for more employee education about these benefits. Employees with lower incomes had the lowest familiarity with these benefits overall.3 This demonstrates a clear need for more employee education about these benefits, particularly among employees who may be feeling less financially secure. Having better access to and understanding benefits such as critical illness and hospital indemnity insurance could help ease concerns and reduce worry.
“The importance of benefits education cannot be understated. When employees more fully understand the financial protection offered by their coverage and how to use it, it not only can help them make informed purchase decisions, but can also bring them greater peace of mind,” said Laura Bongiorno, voluntary benefits practice lead for Group Benefits at The Hartford. “Having enough financial coverage may mean the difference between seeking necessary medical care or not.”
Although employees show an interest in having access to these products, many say they are unfamiliar with both critical illness and hospital indemnity insurance. This demonstrates a clear need for more employee education about these benefits. Employees with lower incomes had the lowest familiarity with these benefits overall.3 This demonstrates a clear need for more employee education about these benefits, particularly among employees who may be feeling less financially secure. Having better access to and understanding benefits such as critical illness and hospital indemnity insurance could help ease concerns and reduce worry.
“The importance of benefits education cannot be understated. When employees more fully understand the financial protection offered by their coverage and how to use it, it not only can help them make informed purchase decisions, but can also bring them greater peace of mind,” said Laura Bongiorno, voluntary benefits practice lead for Group Benefits at The Hartford. “Having enough financial coverage may mean the difference between seeking necessary medical care or not.”
Employees May Be Avoiding Care Because of Financial Fears
A worrisome trend revealed by the CDC showed that by June 30, 2020, an estimated 41% of U.S. adults had delayed or avoided medical care, including urgent or emergency care (12%) and routine care (32%).4 Avoidance of urgent or emergency care was more prevalent among unpaid caregivers for adults, persons with underlying medical conditions, Black and Hispanic adults, young adults and persons with disabilities.5 With 74% of Americans living paycheck-to-paycheck, paying for treatment for themselves or a loved one can be a tremendous strain, and in some cases, downright impossible.6
“Employees are facing increased levels of anxiety in response to the many faceted challenges of the pandemic, but may be delaying care. Some insurance carriers are responding by evolving voluntary benefits to help defray out of pocket costs associated with supporting both physical and mental health,” said Bongiorno.
“Employees are facing increased levels of anxiety in response to the many faceted challenges of the pandemic, but may be delaying care. Some insurance carriers are responding by evolving voluntary benefits to help defray out of pocket costs associated with supporting both physical and mental health,” said Bongiorno.
Carriers Consider Enhanced Mental Health Options
In response to the coronavirus, some insurance carriers are considering changes to their hospital indemnity and/or critical illness policies, to include or expand coverage for infectious diseases (like COVID-19) or other viral conditions which pose a severe health threat. In some cases, mental health is also becoming a part of this expanded coverage.
Hospital indemnity and critical illness insurance can fill in the financial gaps left by high deductible medical plans. Hospital indemnity insurance may also provide enhanced support for mental health impacts of COVID-19. When considering these benefits, employers will want to evaluate whether they are compatible with existing benefit plans, including whether the new benefits are HSA-compatible.
Even prior to the pandemic, mental health was a growing concern of employers and employees. The Hartford’s 2020 Future of Benefits Study revealed that nearly half of all employees surveyed reported an increase in anxiety since the pandemic.7 However, as employees report increasing challenges to achieve work/life balance, the study shows they also have rising worries about money, including debt, savings and living paycheck-to-paycheck. Without access to coverage, this could mean they might choose to delay necessary care.
It’s important that employers communicate often about employees’ benefits so they know what resources are available to them and their families, and encourage them to seek support. When employees understand the financial protection critical illness and hospital indemnity offer, and how it can help them, those who need care for physical or mental health issues may be more likely to seek it without delay. It’s essential for employers to help employees understand the importance of these critical types of coverage, especially now. Voluntary benefits are evolving to continue to meet the changing needs of employees during the pandemic. Employers play a vital role in helping keep employees engaged and productive by offering the right mix of benefits, along with enrollment and education support.
Hospital indemnity and critical illness insurance can fill in the financial gaps left by high deductible medical plans. Hospital indemnity insurance may also provide enhanced support for mental health impacts of COVID-19. When considering these benefits, employers will want to evaluate whether they are compatible with existing benefit plans, including whether the new benefits are HSA-compatible.
Even prior to the pandemic, mental health was a growing concern of employers and employees. The Hartford’s 2020 Future of Benefits Study revealed that nearly half of all employees surveyed reported an increase in anxiety since the pandemic.7 However, as employees report increasing challenges to achieve work/life balance, the study shows they also have rising worries about money, including debt, savings and living paycheck-to-paycheck. Without access to coverage, this could mean they might choose to delay necessary care.
It’s important that employers communicate often about employees’ benefits so they know what resources are available to them and their families, and encourage them to seek support. When employees understand the financial protection critical illness and hospital indemnity offer, and how it can help them, those who need care for physical or mental health issues may be more likely to seek it without delay. It’s essential for employers to help employees understand the importance of these critical types of coverage, especially now. Voluntary benefits are evolving to continue to meet the changing needs of employees during the pandemic. Employers play a vital role in helping keep employees engaged and productive by offering the right mix of benefits, along with enrollment and education support.
2,3,7 The Hartford’s 2020 Future of Benefits Study, March and June 2020.
4,5 CDC.gov.
6 2019 Getting Paid in America Survey, American Payroll Association, September 2019.