by Mike Zarrillo, Chief Revenue Officer, Brella Insurance
Half of Americans now fear a health-related bankruptcy, including employees with employer-sponsored health insurance. Meanwhile, COVID-19 is driving health insurance rate increases for 2021 as insurers struggle to predict whether we’ll see a second wave of infections and whether care deferred in 2020 will drive up utilization in 2021.
In light of these realities, employers need new benefit solutions that both ease employees’ fears and help their business cope with the rising cost of employee benefits. This is exactly why we reinvented supplemental health insurance at Brella.
Brella is a new breed of supplemental insurance that covers 13,000+ medical conditions, including many complications of COVID-19. We make it easy for employees to file a claim and once approved receive a cash payout in as little as 72 hours. While traditional voluntary options cover narrow groups of conditions, we eliminate the guesswork by giving employees the peace of mind that comes with broad coverage in one plan.
But what about the second challenge? How can employers cope with the rising cost of health benefits?
After hundreds of conversations with brokers and employers leading up to our launch in Texas, three strategies are gaining traction with HR benefit leaders and their broker advisors.
1. Implement a supplemental plan that truly complements the health plan strategy
You’re probably thinking this isn’t a new strategy. You’re right. But it’s never been more clear that brokers and employers appreciate the flexibility and cost-savings that a supplemental plan can unlock when it comes to the overall health plan strategy. It’s also no secret that with a sound supplemental health option, employees are far more comfortable choosing higher deductible health plans with lower premiums knowing they have added protection in the event of an unexpected sickness or injury.
So what’s standing in the way?
Traditional voluntary benefits like accident, critical illness or hospital indemnity are simply too narrow in their design to provide the broad supplemental coverage needed to unlock real value. To reap the financial savings of a higher deductible or out-of-pocket maximum, employers need a supplemental plan that covers more than just an accident or a critical illness. Medical issues come in all shapes and sizes and many fall through the cracks with old-school supplemental offerings.
Brella was built to be an extension of the health plan. With over 13,000 covered conditions in one product, brokers and employers have a supplemental solution that unlocks meaningful health plan design and funding flexibility.
2. Shift a portion of employer HSA dollars toward a supplemental health plan.
More and more employers are making contributions to employee HSA accounts with an average contribution of $768 for single coverage. However, this equates to only 17% of the typical employee out-of-pocket maximum1. So it begs the question, could a supplemental health plan stretch the employer dollar further for employees and their families in the event of an unexpected medical event?
Employer-funded supplemental health isn’t a new concept, but it’s a challenging one. First, there’s the difficult task of finding room in the employer’s budget. Second, there’s the guesswork needed to pick between distinct products like accident, critical illness or hospital indemnity insurance. Shifting a portion of the employer’s existing HSA spend solves for the budget concern, while installing a wide-ranging Brella plan eliminates the product guessing game.
Employers will appreciate that redirecting $300 of HSA contributions toward Brella’s premiums can turn into a $500 benefit for a broken wrist or $5,000 for a heart attack2 all in one plan. Plus, Brella’s broad insurance coverage provides the flexibility to use benefits in any way the employee chooses, with no annual limits or risk of not having enough funds.
3. Retire underutilized benefits to make room for a supplemental health plan.
Early signs seem to indicate that employers will face difficult choices when it comes to health plan design and cost-sharing considerations in 2021. As a result, many are opting to simplify their benefit packages to prioritize health coverage.
This is a good plan as employee retention has long been tied to health plan satisfaction. The upcoming year certainly has the makings of being one where employees will place greater value on the benefits that address their health insurance concerns and provide additional peace of mind.
Has there been a better time to think about rounding out health coverage for employees? Probably not. And although it may mean freeing up shelf space by retiring underutilized programs, a Brella supplemental plan gives employees more comprehensive health coverage during a time when fears are high and costs have never been higher.
- Source: Kaiser Family Foundation, 2019 Employer Health Benefits Survey.
2. Note, these are the payout amounts for one of many Brella plan configurations. Actual benefit amounts may be higher or lower.