Is now the time to offer accident or critical insurance along with other traditional benefit enrollments? With the uncertainty facing the Affordable Care Act’s employer mandate and the high costs associated with these medical claims, new research from MetLife finds that communication of these voluntary benefits will help with employee productivity and cost savings.

In 2015, the employer mandate goes into effect, which leaves some unanswered questions in terms of health care reform and health costs. MetLife says that employers need to promote voluntary benefits, in this case accident or critical illness insurance, because it can promote employee loyalty and help out with bottom lines.

“Employers are facing a lot of challenges right now with rising health care costs and health care reform,” says Meredith Ryan-Reid, vice president of accident and health/worksite benefits for MetLife. “Offering supplemental health benefits such as accident and critical illness is an easy and valuable way to complement these benefit strategies because they can help fill financial gaps caused by the increase in out-of-pocket expenses.”

Ryan-Reid adds that these insurance products are “low risk to the employer and highly valuable to the employees who purchase them.”

In two late-2013 studies, the MetLife Accident and Critical Illness Impact Study and the MetLife Accident and Critical Illness IQ Study, MetLife found that the financial impact of accidents and critical illness was enormous. Out-of-pocket costs associated with these unexpected health issues can range as high as $4,000 for accidents or more than $14,000 for a critical illness. For a household, lost income from these episodes ranges from nearly $27,000 to more than $50,000.

Because of these high costs normally charged to employees, MetLife says offering voluntary benefits can increase employee loyalty. Of the surveyed population, 59% said they would value a greater variety of benefits to choose from and 62% said they want benefits that “geared to their individual circumstance.”

More alarming is that 60% of the survey pool is worried about the financial impact of a critical illness on their families and about half are concerned about the impact of an accident. However, 38% and 60% did not know the correct product definition for accident or critical insurance, respectively. 

When asked what benefits employers could bank from having a positive, more up-beat workforce, MetLife’s Ryan-Reid says that loyalty is a priceless addition to a company.

“Attracting and retaining employees are two of the top priorities for HR and benefit plan sponsors,” she says. “Our research shows that when employees are satisfied with their benefits they are much more satisfied with their jobs and loyal to their employer and more likely to recommend their company as a great place to work.”

Clearing the air

MetLife found that employees “too often confuse” the accident and critical illness voluntary benefit with their traditional health coverage. Approximately 44% thought that had enrolled with these products, but confused it with medical insurance.

One way to increase voluntary benefit take-up is step up communication and educational offerings, Ryan-Reid says.

“While most employers understand the importance of communications, it can be a challenge to find the right mix and frequency especially because awareness of voluntary benefits is lower,” Ryan-Reid explains. “In fact, we see a significant increase in participation when there is a greater emphasis on communications; the result is increased engagement, participation, and value for what the employer is offering.”

MetLife lists that employers need to provide choice, raise awareness and counteract confusion and alert employees to risk and resources realities in order to “implement, communicate and maximize” this insurance option.

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