This change applies to Non-Grandfathered plans for plan years starting on or following August 1, 2012.. After this time, they will be required to provide coverage without cost sharing for the following women’s Preventative Services:

• Annual well-woman visits to a healthcare provider
• Breastfeeding support, supplies, and counseling
• Gestational diabetes screenings
• Counseling for STIs
• HPV DNA testing for women over 30 years of age
• FDA-approved contraception methods and counseling for contraceptive users
• HIV screenings and counseling
• Domestic violence counseling and risk screening

There are some exemptions to these plans. Group health plans that are sponsored by some religious employers are exempt from the contraceptive coverage requirement. In addition to this, group health insurance coverage that has connections to such plans is also exempt from covering birth control for women. In definition, a religious employer is one that has the inculcation of religious values and its purpose, primarily serves people sharing religious tenets, is a non-profit organization under the IRC and is one who has a majority of employees sharing religious tenets.

Although these changes are nearly a year into the future, it is important to analyze the additional services’ impact on pricing. While these changes will benefit thousands of women across the country, the changes will certainly come with a price.  Benefits Account Managers should keep abreast of any additional changes and amendments affecting the Patient Protection and Affordable Care Act.

Although nearly 93% of companies with more than 5,000 workers have self-funded plans, many smaller companies don’t. According to a recent survey conducted by Kaiser Family Foundation, the reason for reluctance among smaller companies is the possibility of being hit with a large employee healthcare bill and not having enough cash to pay it. The survey found that only 16% of companies with fewer than 200 workers had self-funded plans. However, experts in this industry expect interest in these plans to rise in the future.

The Benefits of Self-Funded Plans
From the data gathered, it’s clear that there are some benefits to self-funded plans. However, there are more benefits than those that are apparent on the surface.

1. Quality of Data
   Employers have better access to health claims of employees. In addition to this, they also have more information about their employees’ demographic information. Exposure is limited only to employees instead of a broad population. This is a major benefit over regular health plans, which only offer generalized information.
2. Customized Plans
   Employers decide what is covered in the plan. This includes benefits, exclusions and eligibility provisions. Employee cost sharing, retiree benefits and policy limits are also decided by the employer. With exemption from state rules, employers are able to decide on specific provisions without state considerations.
3. Control of Cash
   Since coverage isn’t prepaid, employers have access to interest and cash income that wouldn’t be available under regular insurance policies. Self-funded plans may also delay payment of health plan fees until the services have been charged. However, if claims are lower, the employer is able to retain the savings instead of allowing the insurer to keep that money. Another benefit is that self-funded companies are not under obligation to pay state health insurance premium taxes.
4. Lower Employee Premiums
   Workers will enjoy lower premiums for both single and family plans. In addition to this, they also pay less upfront when they’re enrolled in complete or partial self-funded plans than they would at a company that is fully insured.
5. ERISA Laws Replace State Regulations
   This federal law exempts self-funded plans from the state’s regulations. This includes reserve requirements, insurance laws, premium taxes, mandated benefits and consumer protection regulations. Employers must still abide by rules from the following entities:
   • ADA
   • U.S. Tax Code
   • Health Insurance Portability & Accountability Act
   • Newborns’ & Mothers’ Health Protection Act
   • Pregnancy Discrimination Act
   • Mental Health Parity Act
   • Women’s Health & Cancer Rights Act

The Cons of Self-Funded Employee Plans
Although there are many benefits to enjoy by implementing self-funded plans, there are also potential downfalls. It’s important to consider these.

1. Financial Risk
   With fewer employees than a larger company, there is a higher statistical risk of costly claims for illnesses or accidents. Most employers with self-insured plans purchase stop-loss coverage in order to get a reimbursement for claims totaling amounts over a specific dollar level. In a description posted by the Self-Insurance Institute of America, stop-loss coverage is insurance that indemnifies a plan sponsor from claim frequency or severity that is abnormal. Companies such as Zurich, Gerber Life and Arch Insurance, which are all considered large companies, provide this type of coverage.
2. Administrative Risks
   The Department of Labor has researched how self-funded employers fail to implement efficient administrative systems. Failure to correctly administer a plan is considered a breach of fiduciary duty. Employers take full legal responsibility for operating the plan, so it’s important to realize just how crucial this responsibility is. In addition to worrying about this, there are also strict rules for private claims information. Since employers have access to such information, they must take further measures to protect it and keep it secure. In some cases, this may require hiring one or more security workers.
3. Administrative Costs
   Self-insured claims can be administered within the company or handled by a subcontracted party, which is commonly called a TPA (Third Party Administrator). These administrators assist employers in setting up self-insured group plans. They also coordinate stop-loss coverage, utilization review services and provider network contracts. However, there are extra costs for these services.
4. Economic Weakness
   It may be necessary to keep a self-funded plan for a minimum of three to five years in order to fully enjoy the benefits. This may be extremely difficult for some companies during economic hardship.

At Paradigm Benefits Group, we can help you weigh the benefits and disadvantages of self-funded plans before making any changes. The task of determining how profitable such a change would be can be difficult and may seem overwhelming, but there is no need to worry – we’ll make sure you have the information you need to make a well-informed decision.

1. Fit employees are less likely to use sick days. When employees use less sick days, they contribute more to overall productivity. They also reduce the hassle of trying to find replacements at the last minute. Employees who exercise are much less likely to get sick than those who don’t exercise. Fit employees are also less likely to take an extended leave of absence, require surgery or quit because of health reasons.

2. Employees who are fit are more confident. Exercise gives employees the feeling that they’re doing what they’re supposed to be doing. This creates a sense of confidence, which allows them to set higher goals and strive for excellence. Since they don’t settle for less than meeting their goals, they are very successful.

3. Exercise gives employees more energy. While many people think exercising drains energy levels, it actually creates more energy. Exercise promotes better circulation, which allows ample amounts of blood to reach the brain consistently. This makes employees more focused and alert.

4. Exercise encourages goal achievement. Fitness programs demand commitment and goal setting. Since employees are familiar with these important tasks, they’ll also carry them into the workplace. Employees who can achieve goals consistently are an asset to any company.

5. Employees who are fit make good leaders. Since they’re disciplined by nature, fit employees tend to do well at leading others. Their confidence is high, and they tend to use that to help direct others. They’re usually the first ones to jump in with a solution to a problem. Every employer knows that having a problem solver is an asset.

6. Exercise contributes to a better attitude. When people exercise, the chemical changes in their body create a better mood. People who are in a good mood make excellent employees because they are more balanced mentally.

7. Employees who exercise inspire confidence in others. Fellow employees are likely to look up to an employee who is fit. The fit employee’s discipline to follow an exercise program gives other employees the sense that they’ll always have someone to provide solutions to problems. Fit employees are also more likely to speak up when something isn’t right. If there are problems with other employees, a system or equipment, they’re not too timid to confront their supervisors.

8. Encouraging exercise is a good way to promote teamwork. Planning employee softball games, hikes or other activities is a good way to encourage fitness. However, these examples also promote teamwork. When employees can learn to work as a team outside of work, they’ll have an easier time working together as a team during business hours.

9. Fitness reduces employees’ stress levels. Exercise has the phenomenal ability to lessen the amount of stress felt from physical and emotional tensions in life. Employees who aren’t stressed are more focused, positive and happy. Their clear minds allow them to focus on work, which means they contribute to a much higher level of productivity.

10. Encouraging employee fitness shows that employers care. Many employees feel that their employers don’t appreciate them or their contributions. Employee turnover is reduced in work settings where employers show genuine concern for employees. Providing free gym memberships, employee sports leagues or other enjoyable fitness opportunities is an excellent way to say “I care about you.”

1. Preventing Gum Disease
The best way to prevent gum disease is to get regular checkups and cleanings. It’s important to floss daily and brush twice daily. Gum disease affects the tissues in the bones and gums that keep the teeth in place. Progressive gum disease is the leading contributor to adult tooth loss over any other oral condition.

2. Preventing Oral Cancer
The Oral Cancer Foundation reports that one person dies each hour from oral cancer in the United States. Regular checkups are the best way to prevent and treat this form of cancer. If it’s caught early, it is easy to treat and cure.

3. Keeping Teeth In Place
Nobody wants to lose their natural teeth. By getting regular dental checkups and cleanings, the risk of losing adult teeth is reduced greatly. Good oral hygiene is also required. Using dentures can be a lifelong hassle, and implants are very expensive. In addition to this, it’s easier to chew any food with natural teeth.

4. Maintaining Overall Health
Since there is such a high risk of heart attacks with gum disease, it’s important to get dental checkups regularly. Getting checkups every six months is required in order to battle gum disease.

5. Maintaining Good Oral Health
Regular checkups are the easiest solution for tracking progress or problems. Since dental professionals are able to monitor conditions from one checkup to the next, they’re also able to spot potential problems. It’s much cheaper and simpler to have a dentist create a prevention plan than to pay for costly major procedures.

6. Creating A Treatment Plan
If any problems are present, the dentist will prescribe a special treatment plan to follow. Dentists present these plans, which are usually in the form of a list of services needed, to the patient before proceeding with treatments. Patients are able to work out an affordable treatment schedule and payment plan to receive the needed services.

7. Using Dental Plan Benefits
Most dental insurance policies cover preventative treatments. This includes an annual x-ray, two cleanings and all required checkups. Fillings, scaling, root planing and gum disease antibiotics are also reduced in price with dental insurance. Most smaller procedures are much less expensive than they would be without coverage. Even if popular dental insurance plans aren’t affordable for most people, most people are still able to pay a few dollars each month for a discount plan. While discount plans don’t cover as much as major plans do, they greatly reduce the costs of procedures, treatments and x-rays. Preventative treatments are especially cheap with discount plans.

8. Preventing Bad Breath
Bad breath can be embarrassing to an individual and offensive to others. However, the biggest issue with this is the underlying dental problem. Dental studies show that nearly 85% of people who have constant bad breath, which is also called halitosis, have a more serious underlying dental problem that is causing the bad breath. Good oral hygiene, regular checkups and regular cleanings are the best solutions for preventing halitosis and battling the issues that cause it.

9. Detecting Dental Problems Early
Early detection and prevention are the keys to keeping teeth healthy. Since dentists are able to take advantage of modern technology, the extent of what they can predict and treat is astounding. Simple treatments to prevent major problems are very inexpensive. When compared with the high costs of cosmetic and surgical procedures, preventative costs are very attractive. In addition to saving money, early detection can also save lives. Oral cancer, heart attack and stroke risks are reduced by good oral hygiene and checkups.

10. Having A Bright White Smile
Wine, tea, coffee, tobacco and several other addictive things that go in the mouth can also leave their mark. Stained teeth are common. However, dentists are able to whiten teeth in a matter of hours or days. They also have professional polish to help a white smile shine.

1. Desired Benefits
Employees usually ask prospective employers about disability, life, health and dental benefits. It’s always beneficial to be able to offer good prospective employees the benefits they desire.

2. No Employer Expenses
The only thing better than being able to offer employees the benefits they desire is being able to do so without paying much. The payroll tax savings gained from Section 125 will partially, if not totally, offset the administrative costs that are often associated with voluntary benefits.

3. Group Rates
Since the rates are calculated for a group, individual costs for employees are lower than coverage would be if purchased on their own. This means that employees are able to enjoy the same great benefits they desire for an affordable cost.

4. Lower Employee Turnover Rates
Employers who offer better benefit packages to their employees enjoy a low turnover rate. Good benefit choices also attract good prospective employees. When employment levels are high, it’s essential for employers to have the best benefit offerings to attract the best job candidates.

5. No Secondary Market
Some of the best programs are only offered in plans that are sponsored by employers. This aspect is also more attractive to prospective employees because they can’t obtain the same insurance coverage without working for the employer who offers it.

6. Fosters Goodwill
Employees appreciate employers who show that they care enough to offer good benefit options. This shows employees that the employer cares about their individual needs and the needs of their families.

7. Good Underwriting
Most individuals are not able to find life or disability coverage on their own. This is especially true for individuals who have a medical history that is not favorable. Voluntary benefit plans have simple underwriting requirements. They are also guaranteed without any health questions.

In previous years, employers offered voluntary benefits to retain employees, attract strong candidates and boost morale. They weren’t as popular as they are now. Since there has been significant growth in economic pressures, most employers want to use these benefits because the plans have no direct costs for them. However, employers’ costs aren’t the only benefit. Many employers offer these benefits because their employees are able to afford them. The same employees may not be able to afford similar benefits on their own.

Business owners and company executives are seeking better ways to manage healthcare expenses. They’re also seeking more flexible benefit choices. In addition to reducing costs to employers, voluntary benefit plans reduce FICA contributions. Employees enjoy the benefit of paying less upfront for costly medical procedures or illnesses. If a serious illness or accident occurs, plan members receive cash benefits. These benefits may be used for groceries, travel, living expenses or other expenses related to the medical issue. Whether employers offer indemnity, discount or insurance, voluntary benefits are a great choice for employee relations, employee retention and company savings.

Just like most employees, most businesses start to look at ways they can cut their expenses during difficult economic times. One common focal point of such is employee benefits programs, especially in the area of health benefits. Considering that health benefits are frequently the most expensive aspect of a company’s benefits program, this may seem like a reasonable, logical place for an employer to take cost-cutting measures. However, employers should carefully consider what the consequences will be from making cuts to their employee benefits programs; whether or not there are any alternative cost-cutting options available; and, if benefits cuts are a must, how they can lessen the impact.

The Consequences

Let’s say you, as an employer, decide to target your employee benefits program and make some significant cost shifts toward your employees with the idea you’ll cut costs and save money. If the cost shift involves higher deductibles and/or co-pays for employees, then they may procrastinate seeing a physician when they’re suffering symptoms of illness or injury, forgo or delay filling vital prescription medications, and do without wellness care. If the cost shift involves premium increases, then many employees, especially young and relatively healthy ones, might decide to drop coverage all together. The exodus could leave your plan with a larger and more undesirable risk pool.

These types of cost shifts can very well cost the health plan more money over the long run. Furthermore, it can negatively impact your company’s financial bottom line when it comes to employee morale, productivity, disability costs, and absenteeism.

Consider Your Options

An alternative to cost shifts would be to focus your benefit dollars on the measures that will enhance employee well-being and overall health. Some ideas would include:

• Using incentives to motivate employees to participate in wellness activities, such as weight loss and fitness programs, tobacco cessation classes, and nutrition education and counseling.
• Using incentives to motivate employees to participate in activities that can screen and detect serious medical conditions, such as glucose level testing, blood pressure screenings, cholesterol testing, and completion of health risk assessments.
• Having an employee assistance program (EAP) available to your employees can be especially helpful during poor economic conditions since it can provide resources and/or referrals for things like financial counseling, crisis intervention, and stress management.

If You Must…

Despite the negative consequences, you might feel that cost-shifting is your only feasible option. If so, make sure that you do everything possible to soften the blow to your employees. Here are some ideas:

• Offer voluntary benefits to your employees. This will cost you little, if any, money. While the employee will be responsible for most to all of the cost, they’ll benefit from group rates, convenient payroll deductions for the premiums, and the ability to personalize their coverage selections to meet their own unique needs.
• Offer flexible spending accounts (FSAs), which will let employees pay for health care expenses with pre-tax dollars and get the most of their health care dollars.
• Offer employees consumer-directed health plans (CDHPs). These plans combine a health savings account (HSA) with a health plan that has a higher deductible.

All of the above options have a commonality in that they each require employees to get more personally involved in the their own health and the management of their health-related benefits. Whether the change makes the employee more vigilant in scheduling preventive care visits, participating in wellness activities, or budgeting their future health care expenses, the point is that the employee is assuming more responsibility for their health care and management thereof. It is this greater individual responsibility on the part of the employee that can be one of the best long-term cost-management tools available to an employer.

An employee’s oral health goes far beyond the niceties of fresh breath, sparking white teeth, and a vibrant smile. In fact, there are countless studies showing how closely an individual’s oral health is linked to their overall well-being and health.

First Line of Defense?

Believe it or not, dentists were characterized by a Delta Dental information sheet as disease detectives. While this may seem like a bit of a leap, many professionals feel that this is a very appropriate and accurate characterization, considering regular dental exams can play a role in detecting an array of medical conditions.

In fact, Delta Dental, which is one of the nation’s largest dental benefits carriers, says that a dental exam can reveal over 120 different signs and symptoms of disease. For example, a dental exam may reveal a patient has a dry mouth and fruity, sharp smelling breath, signs of possible diabetes; mouth sores, a sign the patient’s immune system could be compromised; possibly cancerous lumps or sores on the tongue, jaw, neck, or mouth; or certain mouth appearances and inflammatory processes, which could be a sign of anemia. A routine dental X-ray could reveal bone loss, a sign of osteoporosis. When such is noted by a dentist, he/she will alert the patient and encourage them to follow-up with their primary care physician.

Nip it in the Bud

Aside from being a diagnostic tool for non-dental related diseases, the presence of poor oral health can actually lead to a number of medical problems itself. For example, gum disease has been directly linked to some underweight babies, premature births, hyperglycemia, and pancreatic cancer. A gum that’s not healthy can also allow the bacteria that are naturally present in the human mouth to invade the blood stream and travel to other areas of the body that would consider it foreign, a happening that could lead to clogged arteries, stroke, bacterial endocarditis, or heart disease.

As if the above isn’t reason enough to offer employees access to dental benefits, there’s always the actual dental-related and cosmetic impacts from maintaining good dental health. After all, an employee suffering the pain, discomfort, and embarrassment of a broken tooth, cavity, or gum disease isn’t very likely to concentrate as well or be as productive as they could without such ailments.

Dental Insurance – A Primary Benefit

By offering employees access to a dental insurance plan, employers can help enable and encourage them to seek regular dental care to prevent such problems or, at the very least, get treatment for existing problems. Preventive care is often 100% covered under dental plans, especially when the employee uses an in-network dentist, but there’s usually coinsurance or a co-payment associated with non-preventive visits.

In such economic times, it may be hard for some employers to fit the addition of dental insurance into their budget. However, the coverage can always be offered on a voluntary basis where the employee would be responsible for most, if not all of the benefit’s cost. The employer wouldn’t be shouldering the expense, but the employee would still have access to dental coverage, be able to get a group discount, and conveniently have the premiums deducted from their payroll check. The voluntary insurance market offers several plan structures, including indemnity plans, PPOs, HMOs, and discount plans.

The Smile Says it All

Employees that are able to maintain their oral health will be happier, healthier, and ultimately more productive and focused while they’re working. Employers that are unsure what dental benefits option would best fit both the needs of their company and employees should call Paradigm Benefits Group at (508) 991-5352 or (800) 558-2691 and ask for Judy at extension 201.

My grandmother once told me that she would save her allowance all month to walk three miles to the soda fountain for a single milkshake. From ready-made foods at the market, to the fast-food drive by, to diet pills purporting instant and effortless weight loss, our culture today is all about instant gratification and results. The basic fact that not everything is obtained without an effort and/or wait seems to be a lost concept.

Commitment and Discipline

When it comes to a person changing their mindset to adopt healthy habits and rid unhealthy habits, results and gratification take time. It takes a commitment and constant effort to succeed at losing weight, exercising regularly, tobacco cessation, and other habit changes. If they’re to be successful, workplace wellness programs not only need to recognize the above, but also to understand what elements will engage employees over the long-term.

Let’s say you’ve hosted a health benefits presentation on active lifestyles and eating right. The employee turnout is high, and you had a lot of sincere interest from your employees. However, you observe a week later that very few have made any of the recommended changes. Within a few months, even most of those that made an attempt are back to their regular routines.

We Mean Well…

The above is an all too common scenario that confirms the reality that most people are more well-intentioned than self-motivated. Therefore, motivation should be one of the key elements provided by your wellness initiatives. Here are a few tips to help you inject motivation into your workforce:

• Make the experience personal for employees through offering a health risk assessment that will show an employee their own unique health risks and what steps he/she can take to address each risk.
• Completion of the assessment and any resulting follow-up recommendations should be tied to the health risk assessment incentives you’re offering, such as reduced health plan premiums.
• Keeping in mind that an individual must be willing, ready, and able to make a behavior change, you might focus on those that express a desire to make positive lifestyle changes. Aside from offering incentives, you might also help employees see the risks of failing to make positive changes, such as by posting charts with comparative lifespan stats on individuals that are smokers and non-smokers; pre-hypertensive, hypertensive, and of normal blood pressure; and are overweight, obese, and of normal weight.
• Provide/encourage support system structures, such as employee-based walking clubs, sponsoring a biggest loser competition, subsidies for joining certain fitness centers, or newsletter articles featuring health-successful employees.

Creatures of Habit

Change is rarely easy for any of us. Employers must be careful that they don’t get so caught up in the black and white of a wellness program that they forget to address what will make or break it – human nature.

Health reimbursement arrangements (HRAs) and health savings accounts (HSAs) share important characteristics: Both allow for tax-free reimbursement of medical expenses and both can encourage employees to have more awareness of how they’re spending their health care dollars, and thus develop more conscious health care consumerism. However, HRAs and HSAs differ in a number of important ways. Therefore, an employer considering adding some type of health care account to its health benefits program should exercise care and be sure to understand the ins and outs of both types of accounts, so as to choose the one that is a better fit for the company, as well as its employees.

The following are some of the points that distinguish HRAs from HSAs -

Funding

Only the employer contributes to an HRA (the HRA is a notional account, with contributions made to cover claims as they are incurred). The employer, the employee, or both contribute to an HSA, which is set up as a trust or custodial account. Contributions to both HRAs and HSAs are tax-advantaged (as a deductible business expense for the employer, or made on a pretax basis by the employee; and employer contributions are not taxable to the employee).

Design requirements and flexibility

HSAs must be offered in conjunction with a high-deductible health plan, and are subject to annual account limits and limits on annual out-of-pocket expenses. HRAs do not have these requirements. Other than preventive care, an HSA will cover expenses according to the accompanying high-deductible health plan’s deductible and copay requirements. In contrast, the employer can design coverage features in the HRA as it chooses and, for example, provide first-dollar coverage for selected benefits (or providers).

Unspent money and portability

An HSA is an account owned by the employee. As such, unused amounts stay in the account year to year, with no limit on accumulations, and the account goes with the employee when leaving the company. With an HRA, the employer will determine by plan design whether unused funds roll over from year to year and whether employees will receive any remaining account balances upon termination (and, generally, they do not).

So which type of fund makes the most sense for your company? Consider what you are trying to accomplish through the account. Both HRAs and HSAs can encourage conscientious health care spending. However, because unused funds carry over year to year, stay with employees when they leave your employment, and may involve the employee’s own money – all factors which generate a feeling of having a greater stake in the money – HSAs are likely to make employees most conscious of their health care spending. The selling point for many employers that choose an HRA is flexibility, in design and in funding. An employer can link an HRA to a health plan of its choosing – and not just a high-deductible health plan – and tinker with HRA design to encourage/discourage use of certain services or providers. Furthermore, an HRA can be easier on a company’s cash flow, since regular contributions are not required and claims are reimbursed as they are incurred.

Both an HRA and an HSA can add a new dimension to your health plan program in addition to creating the prospect of saving money on your company’s health plan costs. Carefully consider what you are trying to accomplish through the account and how it fits in with your health benefits and overall benefits program. Regardless of which approach you take, it’s likely to be a new way to look at health care for your employees, so be sure to use comprehensive communications when implementing any changes.

What Is Critical Illness insurance?

This policy basically lists a variety of medical conditions, such as cancer, renal failure, paralysis, stroke, and heart attack, within the policy. The insured individual will receive a fixed, lump sum payment if diagnosed with an illness listed within the policy. A per-day benefit may also be paid for certain treatments, surgeries, and hospital drugs. The insured individual will receive a direct benefit payment that they can use however they see fit – medical deductibles, medical travel, or just covering household expenses.

The coverage amount can be as high as $1 million dollars, but, for premium affordability, most employees elect coverage more along the lines of $5,000 to $50,000. Premium pricing is also based on several personal factors, such as geographical location, gender, age, tobacco usage, medical history, and current state of health. Additionally, premiums are likely to be higher with higher-quality policies containing a broader definition of what medical conditions are covered. While premiums for individual policies aren’t tax-deductible, the receipt of the benefit is tax-free.

Critical illness insurance can definitely assist in paying some of the costs being shifted from employer to employees, but it shouldn’t be mistakenly considered a replacement for other insurance policies. It should instead be considered a separate, supplementary, and complementary coverage to major medical, disability, and long-term care.

Recovery Can Be Costly

Research has shown that the probability of both diagnosis and survival is on the rise when it comes to critical illnesses. Research by MetLife estimated the average recovery cost for a critical illness to be around $35,500, a large portion of which is from lost wages. When a critical illness strikes, and it can strike anyone at anytime, it can be an emotional and financial roller-coaster. Critical illness insurance can help keep the financial side of the roller-coaster stable.

The critical illness insurance market is fairly young. As more employers become aware of critical illness products, employees will find more access to group plan products and better deals. These group plans may also make it more likely to have some degree of guaranteed issue limits that would mitigate some of the factors that would cause an individual obtaining the insurance on his/her own to be turned down for coverage by an insurer.

Employer Considerations

Employers considering offering critical illness coverage should keep in mind that not all carriers and products are equal. Definitely consider how the product is being sold. For example, cancer insurance sold by agents using high-pressure sales caused the sector to gain a poor reputation among some employers. Here are some tips when evaluating carriers:

• Employers should work with a carrier that has experience working with businesses of a like size to better ensure company and employee needs can be successfully accommodated.
• Insurance regulations vary from state to state. Larger employers, especially those operating out of multiple states, should look for a group plan to help ensure all employees, regardless of location, are eligible for the same benefits.

Employers should look at the waiting period between when the policy is purchased and when it will pay claims and try to avoid those with a waiting period exceeding 90 days. Employers should also consider limiting how many policy choices are offered to avoid employees losing interest or becoming overwhelmed.

Two Cost Caveats

It’s important for employees to weigh the appropriateness of obtaining critical illness insurance and to be completely aware of the cumulative premium costs. If an employee is finding major health plan deductibles difficult to pay, then they could also find it financially challenging to have the premiums for critical care insurance deducted from their paychecks. Those with high-deductible health plans (HDHPs) could find it more reasonable to direct the money toward a health savings account (HSA) that would provide assistance paying for future medical expenses. However, where the benefit from critical illness insurance can be used as the insured sees fit, HSAs can only be used for qualified medical expenses.

Employees can become insurance poor. Between HSAs, health care flexible spending accounts, major medical, dental and vision, life insurance, disability, long-term care, retirement plan contributions, and so forth…the average worker can easily find that they don’t have much of their salary left to take home.

In summary, the demand for voluntary insurance policies like critical illness is increasing. Employees are concerned about the rising health care and out-of pocket costs they’re shouldering. They’re increasingly becoming aware of the financial limitations and potential financial risk exposures that exist in today’s health plans and are looking for ways to fill the voids.