The growth of high-deductible health care plans increases opportunities for sales of short-term disability insurance in the workplace, a new MetLife study suggests.
"The trend toward consumer-driven health plans creates a critical risk management shift from employer to employee," says Ronald Leopold, MetLife vice president of employer sponsored benefits. "As employees assume more financial responsibility for their health care decisions, other workplace benefits take on an even more critical role for closing financial protection gaps."
When costly illness or injury occurs, consumer-directed health care plans, with deductibles of $1,000 or higher, leave employees open to disastrous financial hits.
MetLife's analysis of more than 1.5 million of its own STD claims submitted by customers found over 50% resulted from the five most costly diseases and illnesses in the United States, excluding pregnancy, in terms of medical expenditures: heart conditions, trauma, cancer, mental disorders and pulmonary conditions.
Those five conditions account for an average of 60% of all lost workdays due to STD, MetLife estimates.
STD coverage can help assure the success of a CDHP by providing employees with a financial safety net as employers shift health care costs to individual workers, notes MetLife's Leopold.
"Producers are facing a world where employers are, either slowly or boldly, shifting costs to individual employees because their own costs are increasing," Leopold says. "Costs are becoming prohibitive and dipping into their bottom line. The opportunities for producers to recognize the value of certain benefits in this new climate have never been greater."
The main value proposition for producers selling STD insurance in the workplace is that a worker who develops a significant illness or injury is going to need income replacement, he says.
For employees enrolled in a CDHP who select an HSA, most will be able to save that money for the next year and build a sizable account to meet future expenditures, even into retirement.
But if they do not have adequate STD insurance, they may have to use significant amounts from their health savings accounts or health reimbursement accounts, which cover the medical costs they would incur before they could have access to traditional insurance coverage.
