With high deductible health plans becoming the primary options for many employers and employees, the need for supplemental medical programs have grown to fill the gaps in traditional medical plans.
While participation rates continue to climb, advisers are discovering there are still communications and educational disconnects between their clients’ employees and the understanding of what the need is for critical illness.
Initially, critical illness only covered conditions such as cancer and heart attacks, but has since expanded to cover Alzheimer’s, blindness, deafness, kidney failure, organ transplant, HIV and several other conditions.
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Because of this expansion, Danielle Lehman, product marketing manager at the insurance, retirement and investment firm, The Standard, says it is more likely for people to at least know someone who is suffering from one of these conditions which could encourage them to invest in critical illness even if they do not suffer from one of the conditions themselves.
“People may know somebody like a parent who is going through one of these conditions now,” Lehman says. “For millennials who are having kids, they want to make sure they are protecting their family.”
Educating clients on the benefits offered
Many employers and employees are not aware of the additional coverage critical illness can provide. Kevin Tehan, benefits consultant for the insurance, benefits and risk management firm Lawley, says it is the responsibility of the broker to provide the information necessary for their clients to educate their employees on these matters.
“The broker dictates the information and educates the client on the strategy, and the client roles it out to the staff,” Tehan says. “If the employer says they don’t want to carry-out the strategy, I always tell my employers, “That’s fine but then the program is not going to be successful,” so what are their motivations and why are they offering the benefit?”
Bradd Chignoli, senior vice president of sales and group benefits at MetLife, says informing employees on how coverage for critical illness works continues to remain low and the possibility for confusion among employer staff could increase over the options they are offered.
“That’s where helping employers understand the variety of resources employees have to help them with their benefits can be useful,” Chignoli says. “We know a lot of employers offer benefits handbooks or links to helpful resources on their own benefits websites, but there are a number of large tools that are growing pretty dramatically.”
Chignoli refers to private exchanges and third party administrators as alternative resources to help educate on benefit comprehension such as critical illness. “Having the tools, decision, advice and guidance to help them understand what their need is and what are the products that they are offered from their benefits programs,” he says.
Adding incentive to the program
Another way advisers are assisting their clients in increased participation of critical illness is advising them to invest in the employee’s enrollment by seeding the critical illness plan as a way of encouraging the employee to participate.
“The employer may pay a small dollar amount like $5,000 of critical illness to the employee to help cover that deductible,” Lehman says. “This will also give the employee the option to purchase additional coverage.”
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Chignoli says he has seen some employers pay 100% of the critical illness for their employees as part of their overall healthcare strategy. “We’ve seen some employers says, ‘as a part of our healthcare strategy we are going to offer up a high deductible health plan and we get that some of our employees may have some concern around that high deductible nature and not understand it as much,’” he says. “A decent amount of employers have said, “to ease that burden we are going to fully fund a critical illness policy for anyone that joins that high deductible medical plan.””
Tehan says he does regular strategic meetings with his clients to determine what they need and based on their responses determines if critical illness is an appropriate benefit to offer to them.
“If someone is on a co-pay plan, critical illness may not be the best thing for them,” Tehan says. “If I have an employer that offers a lot of high deductible health plans and is looking for different strategies to spend their benefit dollars efficiently, that is where I will introduce some of these products.”