Amidst Health Care Reform and Consumerism, Choices and Options for Coverage are Crucial

In today’s environment, employers are focused on providing superior health care coverage while dealing with budget cuts and increasing costs.

For many organizations, supplemental or voluntary benefits address a number of concerns and challenges that have been magnified with the implementation of health care reform. Offering voluntary benefits can enhance the perceived value of an employer’s core benefit plan. Employees who have supplemental insurance can use the benefits to help pay for out-of-pocket costs.

The challenges organizations face when it comes to rising health care costs are not lost on their employees. According to the 2012 Aflac WorkForces Report, 36 percent of employees believe rising health care costs have had a very strong or strong impact on their company’s ability to offer a top benefits package, and 42 percent say it has impacted their ability to keep insurance costs low. Many workers (51 percent) say that health care reform is too difficult to understand, and will rely on their employers to help educate them. In fact, 38 percent somewhat or strongly agree they believe their employer will educate them about changes to their health care coverage due to health care reform. ¹

2012 Aflac WorkForces Report, a study conducted by Research Now on behalf of Aflac, January 24–February 23, 2012.

Employees Want More Benefits Options

HR decision-makers who choose not to offer voluntary plans that could help workers with the financial obligations of unexpected health events may not understand that employees are interested in such options. The Aflac study found that 74 percent of employees say that if their employers did not provide the type and level of health insurance they desired, they would be willing to apply for additional insurance products to ensure adequate coverage. ¹

When asked why adding voluntary insurance plans would be important to them, the top three reasons given by employees were:

• “It offers me more options when it comes to health care coverage.”
• “To meet my needs.”
• “To give me more comprehensive insurance coverage.”

The recession has not only affected consumers’ wallets, but has also influenced how workers view their income-protection strategies. More than ever, they are addressing their insurance needs and the financial impact of health care reform on their households. In fact, 40 percent of employees are doing or have already done something to prepare themselves or their family for possible changes to the health care system. ¹ With these changes, many employees are finding that options to bolster protection from unexpected medical expenses are now a must-have.

Adding voluntary insurance products not only increases an employee’s insurance options, but also helps give a policyholder peace of mind and financial security. In the event of an illness or injury, policyholders receive cash benefits to help pay for daily living expenses, such as rent, gas, groceries, day care and other necessities. Because cash benefits are always welcome, the added protection voluntary insurance offers will continue to be in strong demand.

How to Best Put Voluntary Insurance Benefits to Work in Your Organization

Companies can incorporate voluntary benefits into their existing packages in a number of ways:

As a complement to existing employer-paid benefits . Organizations may add voluntary short-term disability insurance to employer-paid disability coverage that’s already in place. This enhances their current benefit offerings without adding costs for the employer, and satisfies workers’ needs for for more options and more protection.

Restructure current employer-paid benefits to include employee buy-up options. Some businesses offer voluntary insurance plans that feature an employer-paid core plan, while giving employees the option to “buy up” to broader, more comprehensive coverage as their needs change.

Replace some employer-paid benefits with voluntary insurance plans. To avoid eliminating benefits coverage altogether due to cost constraints, employers can replace company-funded insurance with voluntary options. This allows businesses to retain coverage options at no direct cost to their bottom lines and, at the same time, help protect workers. For example, many companies that have dental and vision benefits as part of their comprehensive plans have found they can eliminate these benefits and replace them with voluntary dental and vision plans that interested employees can purchase.

Conclusion

Some aspects of the new law are already in effect, much of the law will be phased in over the next two years. Now is the time for HR professionals and benefits decision-makers to seek out health care benefits strategies that can be counted on to soften the impact as their employees are asked to pay more of their own health care costs. This includes voluntary insurance solutions that can have no direct cost to the company, but offer workers choice regarding additional coverage that best suits their needs.

¹ 2012 Aflac WorkForces Report, a study conducted by Research Now on behalf of Aflac, January 24–February 23, 2012.