If you’re worried about the financial burden employer-sponsored health insurance may place on you when the Affordable Care Act’s employer mandate goes into effect, you may be in the process of changing your benefits package to pass more of those costs on to your employees. According to a report published by the International Foundation of Employee Benefit Plans, many employers are accomplishing this by choosing plans with higher out-of-pocket limits, in-network deductibles and copayments or coinsurance, as well as asking their workers to pay a greater percentage of the monthly premium.
Unfortunately, this means you’re exposing your staff—who may already be having trouble making ends meet post-recession—to even greater financial difficulties if they land in the hospital or have to make an unexpected trip to the emergency room. Data from the Health Care Cost Institute shows that the average facility price for a hospital stay was $15,674 in 2011. And the Centers for Disease Control and Prevention (CDC) report that there are 42 emergency room visits per 100 people in the U.S. every year.
How can you help your workers manage these costs while protecting your company’s bottom line? Supplemental hospital indemnity insurance may be the answer. It offers reasonably priced coverage that employees can use to supplement that provided by their medical plan. And because employees usually pay for it, it makes it possible for employers to enhance their benefits packages without incurring additional costs.
Most group hospital indemnity plans come with a choice of flexible options. For example, employers can choose to offer an HSA-compatible plan, a plan that includes outpatient and inpatient surgical benefits, and/or a plan that covers diagnostic procedures. Other options you may select include coverage for daily hospital confinement, intensive care unit confinement, rehabilitation unit confinement, emergency room treatment and wellness. You can also tailor these plans to cover spouses and children as well as employees.
In most cases, hospital indemnity insurance pays a lump sum benefit directly to the insured employee to help cover the cost of hospital stays and other included procedures and treatments. The employee can then use the money to pay for out-of-pocket expenses associated with the hospitalization, or on whatever else he or she may wish. If you’re interested in adding such a plan to your supplemental insurance offerings, experts recommend looking for one that pays a larger upfront benefit upon admission rather than a smaller daily benefit. Depending on the demographics of your workforce, you may also want to choose a plan that provides coverage for childbirth. Most importantly, the coverage should complement the employer-sponsored healthcare plan your company already offers.