Friday, December 7, 2012

Employees like specialty benefits

I’ve lost track of how many times I’m asked by small business owners, “how can I cut my health care costs?”  Many businesses looking to cut employee health care costs sometimes consider eliminating specialty benefits like vision, dental, disability, life insurance, critical illness, and accident; if they offer them at all.

But there really is no reason why employers can’t add specialty benefits to the health plan they offer employees without raising their own costs.

Many health insurers, including UnitedHealthcare, now offer packages that allow employees to select from several plans, with the employer paying a set amount and employees picking up the difference if they select more expensive plans. With this plan structure, sometimes referred to as a “private exchange,” it is easy for employers to add specialty benefits options to the mix without incurring any additional costs.

And, there is a very good reason to offer specialty benefits: employees like them!  Surveys show that they help to attract and retain employees and also improve morale.  Specialty benefits are especially attractive to employees in special situations, such as someone with two teenagers who need braces or a middle-aged person whose vision is slowly diminishing. They can even help an employer’s bottom line. For example, an effective disability program can return people to work and improve a company’s productivity.

Health insurers continue to introduce new specialty benefits to the marketplace.  The most recent innovation is critical illness coverage. Critical illness insurance pays cash benefits for living expenses and out-of-pocket medical costs if covered employees or family members contract a specific illness or condition such as cancer, heart attack, stroke or paralysis. Another recent innovation is the introduction of Accident insurance; a policy that pays cash benefits for medical care resulting from an accident. Both products can be combined with a traditional or high deductible health plan to help offset a member’s potential out-of-pocket costs from deductibles and coinsurance.

Offering specialty benefits as part of the menu of options that an employee can select maximizes the effectiveness of a company’s health care dollars. A suite of voluntary benefits offered alongside medical insurance enables the employee to focus the employer’s contribution towards his or her family’s specific needs.

Finally, when evaluating voluntary options, look for a company that offers low participation requirements and a comprehensive enrollment program to help you communicate these benefits to your employees. 

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