"Who Pays For it?" and Other Common Supplemental Insurance Questions

Health insurance covers medical expenses, which may include doctor's office visits, testing, prescriptions and ER care, just to name a few. The insured customer pays a premium to the carrier either directly or through an employer, and coverage can apply to the employee and eligible family members.

Supplemental (or voluntary) insurance helps to cover out-of-pocket medical expenses. These expenses include residual costs that fall to the customer, such as deductibles, copayments and coinsurance—expenses that are not covered by health insurance. Because supplemental insurance pays the customer directly (unlike health insurance, which pays providers directly), customers can use the benefit however they choose, including paying for bills or daily living expenses like groceries and child care.

Just like health insurance, premiums are paid to the carrier either directly or through an employer-sponsored program, and coverage can apply to the employee and eligible family members.

Supplemental insurance products are designed to cover critical illnesses, accidents, hospital stays, cancer diagnoses, and short-term disabilities, and can also include dental insurance, vision insurance and others. Employers may also offer supplemental life insurance, which provides benefits to pay for final expenses like funeral costs and fees required to settle an insured's estate.

Indemnity means protection against damage or loss; simply put, hospital indemnity insurance helps protect an insured's finances from hospitalization expenses. Typically, the policy pays a set benefit amount for each day the insured is in the hospital. Depending on the policy there may be additional benefits paid for the first day of an inpatient stay or admission to intensive care. Some policies even provide coverage for inpatient stays for mental health care and drug and alcohol treatment, and wellness and diagnostic benefits to provide coverage for regular checkups and screening tests.

Since hospital indemnity insurance is employee-paid through payroll deduction, it's a good way for employers to help their teams supplement a high deductible health plan. And if the employer also offers a Health Savings Account (HSA), they can choose a hospital indemnity offering that works with the HSA to provide maximum benefits. Employers and employees should consult with a tax advisor to learn more about HSA compatibility.

Employers can even set up their hospital indemnity insurance offering to integrate with their major medical plan and/or health incentive plans they offer. Hospital indemnity plan design options include choices on the number of days of confinement covered, benefit amounts and how often insureds can receive benefits.

Allstate Benefits offers Group Hospital Indemnity insurance to employers with a variety of flexible options to meet the needs of the business and its employees. Learn more about Hospital Indemnity insurance from Allstate Benefits here.

Wellness benefits are designed to help employees stay healthy by providing a benefit for preventive care, including health screening tests, exams, imaging, vaccinations and other preventive services. This can also include health-focused programs designed to help employees quit smoking, lose weight, reduce stress or manage finances. Wellness benefits may also include gym discounts, mental health services, and employee resource groups.

At Allstate Benefits, several of our supplemental products offer employers the option to add wellness benefit riders to a base policy, which helps enrolled employees cover the costs of preventive care, health screenings, and more.

These products include Critical Illness Insurance, Accident Insurance, Hospital Indemnity Insurance, and Cancer Insurance.

When it comes to offering supplemental insurance, there are several key perks for employers. First and most importantly, supplemental benefits provide employees with peace of mind knowing that their finances are more secure in case of a serious illness or injury. This can help to cultivate a healthier company culture and more productive workforce.

Because insureds can use cash benefits however they like, including covering high deductible costs, they are a perfect complement to high-deductible health plans (HDHP).

Also, offering supplemental insurance helps employers stand out in a crowded job market—one where candidates are feeling the pinch of rising health care costs and are looking for employers to help. To counter these increases, many employers are now more likely to offer supplemental health benefits. Enrollment in products like critical illness insurance, accident insurance and hospital indemnity insurance are on the rise. According to BenefitsPro, the latter saw a 12% year-over-year increase in 2022 alone.¹

Because they are employee-paid, supplemental benefits do not impact an employer's bottom line. Plus, supplemental benefits are compatible with most Health Savings Accounts.

Allstate Benefits makes it easy to offer coverage, relieving employers from time-consuming benefits management. Click here to learn more.

Do you have additional questions that are not answered above? Contact an Allstate Benefits agent today to get the answers you need!