The HR Leader’s Guide to Navigating Employee Insurance Benefits

When you’re faced with a medical emergency, a horrible toothache, or just when you find yourself in the pediatric waiting room all winter long because your child has a knack for catching ear infections, the last thing you want to think about is how you’re going to pay for it.

Insurance benefits help your employees offset these healthcare costs for themselves and their families. Comprehensive insurance coverage can even help them pay for costs entirely, without any out-of-pocket expenses. Your employees can focus on resting up and getting healthy, and you’ll soon have them back and ready to contribute to the team.

But employers are bracing for healthcare costs torise by 6%in 2023, another year of climbing medical and insurance costs. And employers and human resources leaders know they have to foot at least part of this bill to retain and attract employees —88% of employersconsidered health-related benefits very important according to a SHRM survey.

Insurance benefits are worth the investment because of their impact on employee health, wellness, and security. Here’s what you need to consider about employee insurance for your own company benefits package.

What is Employee Insurance?

At its core, employee insurance is simply a form of coverage that protects employees from medical and financial costs in the event of an illness or injury. It can take various forms, such as health insurance to pay for medical expenses, disability insurance to pay for lost wages, and life insurance policies to protect against unexpected loss of life.

But employee insurance is not just about financial protection. It can also be used to promote employee health, wellness, and morale. For example, employee health coverage helps your team members stay healthy, get the care they need, and avoid expensive medical treatments by seeking out care proactively.

There are many different kinds of employee benefit plans available, depending on your employee population, budget, and specific needs. Some of the most common types include:

• Health insurance
• Dental insurance
• Vision insurance
• Life insurance
• Disability insurance
• Critical illness coverage
• Accident-only policies

How Does Insurance Differ From Other Benefits?

While employee insurance is just one type of employee benefit, it does differ from other types in some key ways.

• Employees may have to pay into insurance policies:Usually there’s a cost to the employee, either through employee premiums, employee deductibles, or employee copays. These payments all help to offset the expense of providing employee insurance benefits.
• Employees can’t immediately sign up or use them all the time:For example, employees can usually join your company’s health plan once a year during open enrollment, or when they have a qualifying life event.
• Employee insurance benefits are typically required by law:For example, most states require employers to provide workers’ compensation coverage to protect employee safety, and companies with 50 or more employeesmust provide employee health benefits under the Affordable Care Act(ACA).
• Insurance protects employees from financial or medical hardship:Other fringe benefitsmight promote engagement, productivity, and a greater sense of purpose at work. While insurance policies can also promote health and wellness, they primarily ease cost constraintsand provide a financial buffer.

Why Should You Offer Insurance Benefits to Employees?

Whether you’re an HR leader or a business owner, offering employee insurance benefits is one of the best ways to show your team that you care about their health, wellbeing, and security. And when employees are healthy and happy at work, they are more productive and engaged in their roles – which ultimately results in better business outcomes.

Offering employee insurance benefits helps you:

• Provide employees with a safety net:Help employees cover their medical costs or lost salary in the event of an illness or injury, so they don’t have to worry about the financial burden on themselves or their families.
• Improve employee health and morale:Insurance policies encourage employees to seek out medical, dental, and vision care proactively by helping them offset costs. Thanks to these insurance benefits, team members will feel supported to prioritize their health and wellbeing, and they’ll know your company values them outside of the workplace.
• Reduce employee healthcare costs:By investing in employee insurance, you help your employees stay healthy and prevent costly medical treatments. This can also help reduce employee absenteeism and employee turnover, which ultimately saves your business money over time.
• Comply with state and federal laws:Many states require employers to provide employee insurance or other employee benefits in order to promote employee health, safety, and wellbeing. By offering employee insurance benefits, you can help your team members stay safe and healthy at work, while also meeting your regulatory obligations as an employer.

Types of Employee Insurance Benefits

The range of employee insurance benefits available can provide financial protection and peace of mind to employees, offering coverage for all kinds of circumstances — both planned and unforeseen. For some of these policies, most employees will have no need to use them. For others, they’ll use them regularly to maintain their peak work-life wellness.

Medical Insurance

Medical insurancehelps employees pay for healthcare services for themselves and their dependents. These services include doctor visits, tests and screenings, and hospital stays. Health insurance plans can be an invaluable resource for employees who are dealing with both chronic health conditions or medical emergencies.

Medical insurance also covers drug prescriptions. It helps offset the costs of brand-name medication, generic drugs, and other treatments that can assist in managing a variety of health issues and illnesses. Sometimes, health plans include health savings accounts (HSAs) to help employees save for larger expenses.

Dental Insurance

Dental insurancebenefits help to offset the cost of dental treatments and procedures, including regular checkups, cleanings, fillings, root canals, crowns, and braces. Dental insurance is often paired with employee medical insurance to provide employees with comprehensive coverage for a range of healthcare needs.

Vision Insurance

Vision insurancehelps employees offset the cost of vision exams and corrective eyewear, such as glasses or contact lenses. Under certain policies, vision plans can be used to offset the cost of laser eye surgery, such as LASIK procedures, in order to improve their vision and live a more active lifestyle.

Life Insurance

Life insuranceemployee benefits can help provide a financial safety net for employees in the event of an unexpected loss. Depending on the type of life insurance policy, these employee benefits can offer employee protection by covering living costs and providing funds to cover final expenses.

For example, term life insurance policies are intended to cover a specific amount of time. The employee pays a premium each month, and in the event of a loss, their beneficiary will receive a payout to help cover living expenses or final expenses.

Disability Insurance

Disability employee benefits can help protect eligible employees if they can’t work due to a physical or mental illness.

There are typically two types, depending on the employee’s needs:

1. Short-term disability insurance, which helps workers recover and return to work after an or injury
2. Long-term disability benefits, which provide income protection if an employee becomes permanently disabled and is unable to return to their job.

Critical Illness Coverage

Critical illnessemployee benefits provide a lump-sum payment to employees who are diagnosed with a serious illness, like cancer or heart disease. This employee benefit can help offset the costs of medical treatments, as well as caregiving and transportation expenses associated with these types of illnesses.

Accident-Only Policies

Under anaccident-only policy, your team members receive coverage for accidents, including injuries and death. These employee benefits can be used to help cover the costs of medical care, transportation, and funeral expenses associated with a serious accident.

Workers’ Compensation

Workers’ compensationis a type of financial assistance for employees who become injured or sick as a result of their job. The compensation is used to cover medical care, compensatory wages, and other expenses related to an employee’s illness or injury.

Unemployment Insurance

Unemployment benefits provide financial assistance to employees who lose their jobs due to factors outside of their control (such as a reduction in force). This employee benefit can help offset the costs associated with job searching, including housing, transportation, and food expenses. While employees receive unemployment insurance through the government,companies are required to fund itthrough their payroll taxes.

Enhance Your Insurance Benefits With a Wellness Program

While insurance benefits programs can support your employees on their health journeys, they’re just one piece of the puzzle. Adding a wellness programto your employee benefits package can help employees make lifestyle changes that will improve their overall health and wellbeing. Things like yoga and meditation sessions, gym memberships, and financial counseling reduce stress and lead to better health outcomes.

Looking to supplement your insurance benefits with an employee wellness program?Talk to one of our wellbeing specialists today! We can help you put together a package with options for your entire workforce, so every employee can become the healthiest version of themselves.

References:

• Diamond, Frank (September 16, 2022). U.S. employers brace for healthcare costs to rise next 3 years. Fierce Healthcare. Retrieved December 13, 2022 from https://www.fiercehealthcare.com/payers/employers-expect-healthcare-costs-rise-next-3-years
• 2022 SHRM Employee Benefits Survey. June 2022. SHRM. Retrieved December 13, 2022 from https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/Pages/2022-Employee-Benefits-Survey.aspx 
• Employer Mandate. Cigna. Retrieved December 13, 2022 from https://www.cigna.com/employers/insights/informed-on-reform/employer-mandate#:~:text=Employers%20with%2050%20or%20more,may%20be%20subject%20to%20penalties. 
• Health insurance. Healthcare.gov. Retrieved December 13, 2022 from https://www.healthcare.gov/glossary/health-insurance/ 
• Dental insurance. Healthinsurance.org. Retrieved December 13, 2022 from https://www.healthinsurance.org/glossary/dental-insurance/ 
• Vision coverage. Healthcare.gov. Retrieved December 13, 2022 from https://www.healthcare.gov/glossary/vision-or-vision-coverage/
• Fontinelle, Amy (May 25, 2022). Life Insurance: What It Is, How It Works, and How To Buy a Policy. Investopedia. Retrieved December 13, 2022 from https://www.investopedia.com/terms/l/lifeinsurance.asp 
• Boogaard, Kat. How Does Short-Term Disability Work? All Your Questions, Answered. The Muse. Retrieved December 13, 2022 from https://www.themuse.com/advice/what-to-know-about-short-term-disability 
• Protect your income with long term disability insurance. The Guardian Life Insurance Company of America. Retrieved December 13, 2022 from https://www.guardianlife.com/disability-insurance/long-term 
• Rivelli, Elizabeth (August 31, 2022). Critical Illness Insurance Costs And Benefits. Forbes. Retrieved December 13, 2022 from https://www.forbes.com/advisor/health-insurance/critical-illness-insurance/ 
• Davalon (October 6, 2022). What is Accident Insurance and How Does it Work? eHealth. Retrieved December 13, 2022 from https://www.ehealthinsurance.com/resources/affordable-care-act/accident-insurance 
• Workers’ Compensation. U.S. Department of Labor. Retrieved December 13, 2022 from https://www.dol.gov/general/topic/workcomp
• Understanding Employer Responsibility for Unemployment Benefits. Paycor. July 18, 2022. Retrieved December 13, 2022 from https://www.paycor.com/resource-center/articles/understanding-employer-responsibility-for-unemployment-benefits/