5 Reasons Employers Should Consider Funding Supplemental Health Benefits

A recent study showed that 77% of employees would consider leaving their jobs because of poor benefits. It may seem like a natural solution to add more benefits, but with limited budgets, supplemental plans are often added on a voluntary basis. Employees may not see a plan they have to pay for as a “benefit”— especially if the plan is disconnected from the health insurance offering and not solving a clear employee need.

With health insurance deductibles outpacing household income for the past 25 years, supplemental health benefits are gaining more attention. Employers should consider partially or fully funding these products to unlock their full potential. Here are five reasons why.

Reason #1: It will soothe — not salt — the wound of higher health insurance costs.

If you’ve had to increase your health plan premiums or cost sharing in recent years, asking employees to spend more to bridge the coverage gaps could actually be adding insult to injury. The aim of employee benefits is to give employees reasons to join and stay on your team. As rising costs force tough health insurance decisions, even a small contribution toward supplemental health coverage communicates that you’re doing your best to make sure employees are protected.

Reason #2: An employer contribution communicates value.

You put your employee benefit dollars in the best places to ensure your team gets as many protections and perks as possible. Employees pick up on this and watch what you’re willing to pay for as a sign of what’s valuable. Some may believe if you weren’t willing to pay for supplemental health benefits, why should they?

Reason #3: An employer contribution earns attention. 

Many employees struggle to understand their health benefits and they often experience fatigue during open enrollment when they are presented with all their benefit options. Anything that includes an employer contribution signals company support and warrants more employee attention, which can significantly boost benefits literacy and engagement.

Reason #4: An employer contribution boosts participation.

In addition to promoting value and garnering employee attention, putting employer dollars behind a supplemental health benefit will improve the plan’s affordability. Reduced premium costs for employees and their families will undoubtedly help encourage employees to elect even a base level of valuable supplemental coverage. And a higher level of participation means a workforce that is better protected.

Reason #5: A supplemental health plan will enhance your overall health benefit strategy.

A robust supplemental health plan can provide an additional lever to pull when designing your health benefits strategy. Wide-ranging supplemental health insurance offers a softer landing when considering an increase to plan deductibles or annual maximums. Plus, it delivers increased peace of mind all year and much needed benefits that employees can use when health issues arise. In the end, you will have strengthened the one benefit that employees are most focused on.

A word of warning — if you subsidize a supplemental health plan and get great participation rates, the mood can quickly sour if your employees discover the plan doesn’t offer adequate coverage. Likewise, if they don’t have a good experience filing a claim, you may find your team looking for a job that offers benefits they can actually use.

Look for a modern supplemental health plan that covers your team’s financial exposure to medical bills, and one that actually makes it easy to file a claim and receive a benefit. If those elements are in place, you will have successfully shielded your team from the financial burdens that all too often follow unexpected health hardships.


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