How supplemental health insurance works


The increasing cost of health insurance has caused employers to rethink their overall employee benefits offering. Their challenge: How to balance the company’s share of the cost with how much will fall to you, the employee. Often, the result has been that employees face greater financial responsibility. 

Fortunately, there are more options out there now to help manage these potential health care costs. Here's one that many employers are turning to: Supplemental Health Insurance. 

Supplemental health insurance was created to help workers offset rising out-of-pocket expenses due to:

  • The growing prevalence of high-deductible health plans (HDHPs)
  • Fill the gaps from medical plans that fall short of the total costs associated with the diagnosis and treatment of a major illness or injury
  • Non-medical expenses that still need funding while someone is recovering from major illness or injury and can't work, including childcare, groceries, rent/mortgage, and travel to and from the treatment.

The need is clear. If you’re like many working Americans with only modest savings, you could be at significant risk: Nearly 3 in 5 would have to borrow money to pay for a $3,000 medical bill.1

And bills of that size can arise a lot more frequently than you may think. It's all too common to cut your hand while making dinner. Or slip down a set of icy steps. Or have your child break an ankle at soccer practice. Managing the physical hardship is one thing, but don’t forget the potential financial strain. Could you afford the sizable, uncovered expenses that result? 

Supplemental health insurance products at a glance

Even if you have to buy supplemental health insurance on your own (vs. through your employer), it’s worth considering. Having one or more policies will give you an important level of protection against medical bills that could severely impact your savings.  

Take a look at how these four types of supplemental health plans help to complement your medical insurance, as well as help pay for any non-medical needs while you are recovering from an illness or injury.

Accident Insurance Complements health insurance by providing benefits for covered accidental injuries requiring treatment, urgent care, or hospitalization. Adults with active recreational lifestyles (hikers, bikers, etc.) or sports participants, as well as families with children who often get injured playing with friends or during organized sporting events, should consider getting this coverage.
Critical Illness Insurance Complements health and disability insurance by providing a lump-sum cash payout for the diagnosis of major, chronic and debilitating illnesses such as heart attack, diabetes, stroke, Alzheimer’s disease, and Parkinson’s disease. It can sometimes come with a cancer rider for supplemental coverage. Critical illness insurance can be a good choice for older adults and those with a family history of serious illnesses. 
Cancer Insurance Complements health and disability insurance by providing benefits specifically for a cancer diagnosis or related procedures, treatments, or screenings. It should be considered for individuals with a family history of cancer.
Hospital Indemnity Insurance

Complements health insurance by providing benefits when admitted to a hospital or intensive care unit (ICU) for a covered sickness or injury. It's an option for individuals covered by an HDHP, or for individuals who are living paycheck-to-paycheck with very little personal savings and expect a hospital stay some time in their future.

Choosing the best supplemental health insurance products for your needs

Choosing the right amount of coverage and the right products isn’t a snap decision. You have to consider your career status, your family situation, your overall income (and disposable income), and your current and future health.

Here are a few questions that could help make things clearer:

  • Do you have funds available in personal savings to help cover an unexpected out-of-pocket medical expense?
    If the answer is "no," you’ll want to make at least a small investment in a basic policy, possibly Accident Coverage, to help with some of the immediate costs.

  • Do you have a high-deductible health plan or other gaps in your medical insurance programs that would require significant funds to cover?
    If "yes," you’ll want to have one or two coverages that can help you get payments for medical issues that can easily reach $2,000 or more very quickly. Accident and Hospital Indemnity might be a smart start.
  • Do you have Disability coverage to ensure a sizable portion of your income is protected if you’re out of work for a long stretch of time and unable to earn a paycheck?
    If "no," make sure you add a Disability policy. It can protect up to 60% of your salary if you're unable to work. Then consider Accident and Critical Illness as a baseline investment.
  • How much of your disposable income could you reasonably invest in supplemental coverage?
    Buying insurance isn’t an easy decision and it diverts money away from your disposable income. But it could pay off in the long run. For about the cost of a pizza per month, you can secure supplemental health.



Benefits Optimization, Guardian Workplace Benefits Study, 2022, 11th Annual

Guardian's Group Insurance products are underwritten and issued by The Guardian Life Insurance Company of America, New York, NY.  Products are not available in all states.

2022-142934  20240831