Supplemental health plans have long been offered as voluntary benefits with premiums paid by employees. With health insurance premiums and cost-sharing on the rise, there is a case to be made for employer benefit dollars going towards supplemental health solutions to help ease the burden. Join us as Brella’s Chief Revenue Officer, Mike Zarrillo explains the advantages of employer-funded supplemental health benefits in Episode 18 of the Better Benefits podcast.
The case for employer funded supplemental coverage
Mike recently authored an article explaining the case for employer funded supplemental health insurance. In it, he outlines why now is the time for employers to consider reallocating some of their benefit dollars towards supplemental coverage. They include:
- Most of your employees can’t afford today’s health plan cost-sharing
- Look beyond traditional supplemental products for new plans that work
- HSAs alone aren’t solving the problem
- Asking employees to pay is like pouring salt on the wound
We highly recommend reading Mike’s post to get the background for this episode. Below, we recap our conversation with Mike and unpack these ideas to get a full picture of the case for employer funded supplemental health insurance.
What is a supplemental insurance plan? How does it relate to voluntary coverage?
These are basic questions but they’re an important place to start. Supplemental insurance was invented to help cover life-altering, critical illnesses. It wasn’t designed to be wide-ranging. The sales process involved talking to an employer and pitching that they don’t have to fund these programs, employees will pay the premiums with payroll deductions, and it will be simple and easy to implement.
Over the past several years supplemental products have changed as deductibles have increased. But what hasn’t changed is that they are almost always voluntary. Supplemental benefits have been equated with voluntary benefits because that is the way it has always been done. Up until now, there hasn’t been a compelling reason for employers to fund this coverage.
Currently the U.S. health system is experiencing burdensome healthcare costs, which drives up health insurance premiums and cost sharing. Critical illness and other supplemental plans are being asked to solve a problem they weren’t originally intended to address. Supplemental plans were intended to cover relatively rare illnesses like heart attacks and cancer. But nowadays people are far more likely to experience financial hardship from common illnesses like appendicitis, kidney stones, diverticulitis, etc. In the past, the need for more coverage for these common illnesses wasn’t there. But today we are seeing younger people with common health issues experiencing large medical bills that hit their deductibles, drain their HSAs, and then saddle them with financial hardship.
Why is now the right time for employers to revisit funding supplemental coverage?
The timing comes down to a few things. First, it’s simple math. Health insurance deductibles have skyrocketed 800% over the past 25 years, while household income has grown only 18%. It’s really no wonder why half of Americans fear bankruptcy because of a major health event, and 60% would struggle to cover a $1000 unexpected expense.
On top of this, research indicates that a growing number of employees are delaying care, or skipping it altogether, because of the potential costs, causing a vicious cycle that negatively impacts their health and wellbeing.
Lastly, a modern supplemental health option like Brella delivers greater value on an employer’s benefit dollar. Up until Brella, employers have only had access to narrowly scoped supplemental products that weren’t designed to cover the broad spectrum of injuries and illnesses. But Brella is different. Brella plans have a significantly wider scope which better complements the health insurance plan and enhances the health benefits strategy.
We are at a tipping point and things need to change. Supplemental health coverage is one way for employers to take some of the burden off of employees. Any amount of employer contribution can indicate the importance of this coverage and encourage employees to consider investing in it.
What makes Brella a different kind of supplemental coverage?
Brella is a fundamentally different kind of supplemental health insurance. In one plan, Brella covers a wide range of injuries and illnesses from moderate conditions like dehydration or a simple fracture to more dangerous or life-threatening conditions like heart attacks and cancer. And Brella triggers benefits solely on the covered ICD-10 diagnosis code, meaning there are no accident or hospitalization requirements. This approach drastically simplifies the claims process ensuring employees and their families receive their Brella benefits quickly to minimize the financial strain caused by unexpected health issues.
How should employers approach the funding of supplemental benefits?
There’s no question that employer dollars are precious and the best benefits deliver the greatest return on the employer’s investment. That said, any employer funding of supplemental health benefits starts with finding the right product. Traditional options have struggled to demonstrate the compelling value that would warrant an employer contribution because of the limited coverage those products offer. Brella changes that discussion.
A logical next step for employers is to think about the importance of the benefits they’re offering and reconsider the allocation of their spend to better align with the highest priority programs. As voluntary-only options, today’s supplemental health plans are an afterthought in the benefits offering. But, if you had a plan that boosted the health insurance, covered more, and was designed to be utilized, then it would stand to reason that a supplemental plan should garner the highest level of attention after the health insurance plan.
Finally, it may not be enough to just offer a supplemental plan on a voluntary basis. A plan with some level of employer funding will give it legitimacy with employees and will send the message that the benefit is valuable. Employees are fatigued enough by the time they get to voluntary options during a typical enrollment and those benefits are not viewed as important or relevant. On the other hand, if a benefit includes an employer contribution, it sends the message that it is worth paying attention to during enrollment.
What are some of the barriers (real or perceived) that are holding employers back?
Sometimes it just comes down to change. It’s not always easy and it may create a little more upfront work. Brella is a new kind of supplemental coverage that is changing the discussion and challenging the status quo. But we understand it can be overwhelming for some employers to change their plans and their strategy. Employers will have to be willing to take a leap and put in a little work to step forward and approach things differently. We are optimistic that brokers and employers alike remain open to making changes and implementing new solutions.
How does Brella make buying and implementing supplemental coverage easier?
It starts with a simpler product. Using its unique ICD-10 code approach, Brella speaks the same language as the medical plan, stripping away the complexity built into the legacy supplemental insurance options. We keep things simple with a clean, black and white focus on what’s covered and how benefits are triggered, eliminating the complexity and confusion of the old school plans.
Next, we leverage tools to demonstrate the unique value a Brella supplemental health plan would bring to your group. We can review your real-life medical claims data to clearly, accurately, and transparently demonstrate how a Brella plan would perform. This analysis helps showcase the value and utilization of a Brella plan and the potential return on an employer contribution. And, we can model premiums in real-time to show how an employer contribution can positively impact overall plan premiums. That makes Brella more flexible than traditional supplemental plans and allows employers to fund Brella with confidence.
Finally, we know that implementing benefits is hard work. We’ve made it easier with paperless plan installation, a simpler, tech-enabled product, and less administrative burden. Plus, by making it easy for employees to actually use Brella, we do our part to improve the overall employee satisfaction with their benefits. Something employers will certainly appreciate.
If you’re an employer or broker, have the discussion. Think about where you can reallocate dollars to offer supplemental health insurance. Next to the major medical, it’s undoubtedly the next most important thing on your employees’ minds.
Listen to the full episode to hear more from Mike.
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Mike recommends the book Developing the Leader Within You by John C. Maxwell. He tells us that a mentor gave him this book in 2006 as he transitioned into his first leadership role. It had a big impact on him as he took on this new role and grew as a leader.
In the book, Maxwell talks about levels of leadership that leaders will progress through. A level 1 leader is someone who is a leader only in position, meaning people follow them because they have to. This progresses all the way up to a level 5 leader, someone who is a leader as a person, meaning that people follow them because of who they are and what they represent. This is a guiding light for Mike, who often thinks about how to be true to himself and his values as an effective leader.
If you want to get in touch with Mike or learn more about Brella, visit our website at Joinbrella.com or email us at firstname.lastname@example.org.
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