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With open enrollment approaching, employees can find themselves overwhelmed by the information needed to make the best benefit choices. New data from Cigna suggests this may be especially true when it comes to supplemental, or voluntary, health benefits.
Most people are familiar with traditional supplemental benefits – dental, group term life insurance and short-term disability. They're much less familiar, however, with other types of voluntary benefits, specifically coverage that provides additional protection in the event of a critical illness, hospitalization or accidental injury.
Cigna recently conducted its 2018 Voluntary Benefits Study1, and found that, among 1,000 full-time employed adults ages 25-66 with employer benefits, 81 percent of respondents were aware that medical bills resulting from serious injury or illness pose a financial risk. Yet only 34 percent of them would expect their benefits to cover this risk. Instead, almost half would anticipate using their savings, 32 percent would put expenses on a credit card, and 22 percent would borrow or withdraw from a 401(k), IRA or other retirement savings.
- Knowing that critical illness insurance pays a lump sum of money for a serious illness would encourage half (51 percent) to enroll. That money can help pay for expenses such as travel, room and board, transportation, childcare, treatment options or out-of-pocket expenses not covered by primary health insurance.
- Knowing that hospital indemnity insurance pays a lump sum of money for a hospitalization – such as surgery that requires an overnight stay to recover – would encourage 45 percent to enroll. This benefit also can help pay for expenses such as childcare, travel or other out-of-pocket expenses not covered by primary health insurance.
- Knowing that accidental injury insurance pays a lump sum of money for a serious injury would encourage 43 percent to enroll. This benefit can help pay for rehabilitation, transportation, childcare, travel or other out-of-pocket expenses not covered by primary health insurance.
The first step in the learning process: Look at your current and future needs realistically. People's lives change from year to year, so the choices made last year may not be the best option this year. If you have children who have begun to play organized sports, for example, the potential for an accidental injury may have increased. Being financially prepared for such an occurrence can provide peace of mind.
The second step: Take the time to plan ahead. To understand all of the benefits provided by your employer, start by reviewing the information provided ahead of open enrollment, and attend benefits meetings if they are offered. Follow up with any additional questions you might have as you assess how to best to help protect you and your family in the event of an accident, illness or hospitalization.
The third step: Make the most of open enrollment. This is your opportunity to review all of your benefit options at the same time to ensure they work together as effectively as possible. In the recent survey, those who enrolled in voluntary benefits through their employer listed their top three reasons as cost, the ability to use payroll deduction and convenience.
"Voluntary benefits that are designed to complement core benefits provide additional peace of mind, plus convenience and affordability," said Marc Jeffreys vice president of business operations, Enterprise Voluntary Benefits at Cigna. "That's why Open Enrollment is so important."
For more information, visit our Voluntary Benefits page.
1 Cigna Consumer Benefits Survey, December 2018