Guide to supplemental insurance at work
When injury and disease strike, supplemental health insurance can help pay for unexpected medical expenses. Here are the types of plans available, reasons employers should offer them, and why employees should get them.
Even if you have healthcare coverage, if you get injured or are diagnosed with a serious illness, you can face all sorts of expenses not covered by your health insurance plan. In addition to coinsurance, copays, and deductibles, you could also have extra expenses at home for childcare, transportation, and other things. Supplemental health insurance plans are an increasingly necessary way to help pay for these costs. A growing number of companies are offering them as a voluntary (i.e., employee-paid) workplace benefit. The plans pay a cash benefit directly to the covered employee or family member, not the hospital or doctor. The cash benefit amount varies based on covered sicknesses, injuries, treatments, and services. The cash can be used any way they see fit — to cover the out-of-pocket costs for a hospital stay, prescription drugs, and even non-medical expenses like childcare, car payments, even groceries.
| Benefits to employees | Benefits to employers |
| While employees may purchase these types of supplemental health insurance plans as individuals, they can often save money by getting a group plan at work. Voluntary group insurance plans may also offer better coverage and benefits than many individual plans. | These sought-after benefits can add financial independence that helps companies attract and retain personnel. And because they are voluntary, there is little or no added cost to the company. |
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The different types of supplemental health plans and how they work
Guardian offers four different kinds of voluntary supplemental health plans for employers. Benefits are complementary, and many companies offer their workers a choice of plans.
| Accident Insurance1 | Cancer Insurance2 |
| Accident insurance provides benefits for more than 40 different accidental injuries requiring treatment, urgent care, or hospitalization, including common injuries such as burns and fractures. It also covers treatment and recovery services such as ambulance transportation, physical therapy, and X-rays. Payouts are based on covered treatments, regardless of whether a health insurance plan also covers treatment costs, and plans will increase benefits for covered children injured while participating in an organized sport. | Cancer insurance provides a lump-sum payment for cancer diagnosis, screenings, and treatment. Payments are made to the employee, regardless of medical insurance, and can be used for any purpose. |
| Advantages for employees include: | Advantages for employees include: |
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| Advantages for employers include: | Advantages for employers include: |
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| Critical Illness Insurance3 | Hospital Indemnity Insurance4 |
| Critical illness insurance complements medical and disability insurance plans by providing a lump-sum benefit paid directly to the employee on the diagnosis of more than 30 different major, chronic, and debilitating illnesses such as stroke, heart attack, cancer, Alzheimer's disease, and Parkinson's disease. | Hospital indemnity insurance softens the financial impact of higher health plan deductibles and other out-of-pocket hospitalization costs by paying benefits to employees who are admitted to a hospital or ICU for a covered sickness or injury. |
| Advantages for employees include: | Advantages for employees include: |
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| Advantages for employers include: | Advantages for employers include: |
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Note that "Medigap plans," which supplement Medicare health coverage, are not typically offered as an employee benefit because most working-age employees are not eligible for Medicare.
Why health insurance just isn't enough anymore
The insurance industry has faced tremendous changes in traditional health care benefits. As costs for hospital stays and other treatments continue to climb, insurers are shifting more costs to users in an effort to keep premiums at reasonable levels for companies and their people. It's not just out-of-pocket coinsurance and copay treatment charges that keep going up. As the number of Americans enrolled in a high deductible health plan rises, they have to pay for more treatments out of their savings before their medical plan starts to pay anything. Supplemental health plan benefits can be a powerful source of protection against these costs, and that's why so many people want them.
How to get supplemental health benefits at work
If you're an employee, ask your HR manager what supplemental health benefits are available and when you can sign up. If you're an employer, talk to a Guardian representative to learn more about your group benefit options and how to find the right mix for your employees and your business.
Frequently asked questions about supplemental insurance
What is supplemental insurance?
Supplemental health insurance helps pay for unexpected costs that may not be covered by regular health insurance. You receive cash benefits directly from the insurance company based on covered sicknesses, injuries, treatments, and services. The claims process is typically straightforward, and cash can be used any way you see fit — to cover out-of-pocket health care costs or non-medical costs like groceries, childcare, and housekeeping. There are different types of plans available, and many employers offer them on a voluntary basis (i.e., employee-paid) to provide added financial protection to their workers.
What is the best supplemental insurance?
There is no single best supplemental insurance plan because people in different situations have varying needs. For example, Medicare supplement insurance (also called Medigap coverage) can help pay for claims and costs not covered by regular Medicare health insurance – but it is of no use to anyone too young to be eligible for Medicare. However, generally speaking, insurance plans that cover more types of injuries or illnesses and provides higher benefit payments are more valuable – and likely more costly – than plans which cover fewer conditions and offer lower benefit payments on claims.
How much does supplemental insurance cost?
Costs vary widely depending on the insurance company, type of plan, conditions covered, and cash benefits offered. However, even at the higher end of the price range, premiums are much more affordable than regular medical insurance.
Do I need supplemental insurance?
Even with a good health plan, you could incur thousands in out-of-pocket costs if you slipped down icy steps and had to visit an emergency room. If you have enough saved to cover those costs comfortably, you may not need supplemental health insurance. Otherwise, you should consider getting accident insurance and other supplemental coverage.
What other types of insurance coverage should I look for at work?
First of all, make sure to sign up for regular health insurance plus drug coverage, unless you have other coverage (for example, through your spouse). The same holds for a dental insurance policy. Here are some other types of insurance you should consider getting through work, if available:
- If your employer offers group-rate life insurance, it can cover at least some of your family's needs, and the rates may be more affordable than coverage purchased individually from a life insurance company.
- Disability insurance can help replace your income if you become disabled and can't work.
- Long term care insurance can help pay for treatment in a long-term care facility and help save your retirement savings from being exhausted.
