As millions of Americans become better educated consumers about their medical insurance options through the first open enrollment period for public health insurance exchanges, the time is right to take that knowledge to the next level.

Most people with workplace-based coverage aren’t familiar with the value of supplemental plans, such as accident and critical illness insurance. But the potential payback in offering these plans with core coverage is huge for employers interested in creating a meaningful voluntary benefits strategy.

In the recently published white paper entitled, “Accident and Critical Illness Insurance Are Surprisingly Good for Business,” MetLife examines how these voluntary benefits provide an added layer of financial protection to employees while helping employers achieve key business objectives.

Employees Are Not Prepared

The Study estimates that out-of-pocket costs typically associated with an unexpected health issue can climb as high as $4,112 for an accident and $14,444 for a critical illness. And those figures do not include lost-income projections from accidents and critical illnesses, which the findings suggest can be as much as $26,900 and $50,600 respectively. This is especially concerning considering that one in four surveyed employees admit they do not know where the money would come from should they face a health issue such as a critical illness.

“Employees significantly underestimate the costs associated with an accident or critical illness, especially lost income,” according to Meredith Ryan-Reid, vice president, Accident & Health/Worksite Benefits for MetLife. “This can leave employees financially vulnerable if an unexpected health issue should arise. Further, the shift toward increased employee responsibility for health care costs through consumer-directed and high deductible health care plans is leaving employees more exposed than ever to these financial risks. Even with medical and disability coverage, there are gaps in these coverages that could leave employees unprepared.”

Solutions That Benefit Employees And Employers Alike

Employers can help employees fill these significant coverage gaps by offering voluntary supplemental health products, such as accident and critical illness insurance, on an employee-pay-all basis. These valuable benefits are paid directly to employees in a lump sum, regardless of what is covered by medical insurance or other coverages. The beauty of these benefits is that they are a cost-effective way for employers to offer greater choice to employees. And research reveals increased benefits satisfaction and loyalty when employees are given access to such coverage. These plans also can be used as a recruitment and retention tool for employees. MetLife’s 12th Annual Employee Benefit Trends Study connects the dots, concluding that benefits satisfaction influences job satisfaction, loyalty and the perception of their company as a great place to work. However, the Accident and Critical Illness white paper findings also suggest a learning curve and need for proactive employee communication strategies to maximize the value of these products. For example, 85% of the survey respondents do not understand what these plans cover, nor do they realize their flexibility and ease of use.

Taking Action

The MetLife white paper outlines three critical steps toward helping elevate employee recognition of accident and critical illness insurance as both desirable and valuable benefits. They include the following recommendations:

1. Provide choice. A robust suite of voluntary products is seen as driving loyalty, with 59% of employees saying they value a greater choice of benefits and 62% desiring plans that are customized to their individual circumstances. Given these findings, it may not be surprising that nearly 40% of those surveyed employees indicated that shouldering more of the cost of their coverages was a price worth paying to secure access to benefits that meet their needs.

2. Raise awareness. A crucial issue revealed by the research is that employees too often confuse accident and critical illness insurance with “traditional” health coverages. And while employees appear to be concerned about accidents and critical illnesses, they’re unaware of coverage options. For example, half of the respondents have contemplated the impact of an accident, while 60% worry about the financial impact of a critical illness on their families. But there’s clearly a need for more education about these solutions. Half of all employees who described themselves as worried are unaware of the potential benefits provided by critical illness insurance. Employees also tend to mistakenly believe medical insurance covers accidents and critical illnesses.

3. Promote resources to address risks. There’s also a disconnect between employees’ worry and their attitudes about the prospect of an accident and critical illness occurring.

When it comes to accidents nearly one in five (19%) reported that “I don’t worry about stuff that may or may not happen.” As for critical illnesses, 16% of surveyed employees reported that “I am healthy enough that I don’t need to worry about critical illness right now.” Yet, approximately 1.6 million new cases of cancer are expected every year alone. Employers are advised to avoid using scare tactics, but rather offer a reality check in employee education about these risks.

To gain more insights and easy action steps that can help enhance your benefits strategy, download the white paper at metlife.com/cwb.

Bruce Shutan is a Los Angeles-based freelance writer.

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