Voluntary supplemental medical insurance can help fill in gaps left by ever-stingier health insurance policies. And it can be critical for workers—part-timers, for example—who don’t qualify for your usual health benefits.
For employers, offering supplemental insurance is an inexpensive way to improve a benefits portfolio. Reason: Employees pay most if not all the insurance premiums.
Dental and vision insurance are the most common kinds of supplemental coverage, but a host of carriers write policies to pay for everything from out-of-pocket medical costs to enhanced hospital care to specialized cancer treatment.
Supplemental health insurance plans, such as those offered by industry giant AFLAC, can build good will among employees, make your benefits package more competitive and enhance HR’s image.
But your image can take a hit if you pick the wrong supplemental insurance carrier. Choose the right one by knowing the right questions to ask your broker. That’s who has the best information about the options you should consider.
But beware: Some brokers push certain policies harder than others, simply because they earn higher commissions for selling them.
To make sure you secure the best coverage at the best prices, ask brokers about the following topics:
Do the insurers take time to educate employees about what is covered? That’s crucial because buyers of supplemental insurance are disproportionately part-time and low-wage workers without college degrees. Plus, many insurers combine supplemental plans with other insurance coverage, making the products terribly complicated.
Look for insurers that seek information about your current policy and its gaps. Some insurers use surveys to determine what’s needed.
2. Broker fees
What fees and special incentives does the broker earn for selling supplemental insurance? Compare the fees to those of competitors. Commissions for supplemental policies tend to be higher than other insurance products. Some brokers favor policies that generate the highest commissions, just like investment advisors push mutual funds with the highest fees.
What is the carrier’s track record for service? Seek out an insurer that offers efficient billing and administration. Reason: Employees will select different policies with different premiums. Insurers need to reconcile a range of payroll deductions.
4. Dispute resolution
What is the carrier’s policy for handling employee complaints? Will the insurer provide periodic reports on the outcomes of disputes?
Final question: Will your broker be your advocate if you need to go to bat for employees?