With COVID-19 expected to be a part of our daily lives for the foreseeable future, many Americans are expecting that they could get sick. In fact, Voya research shows that more than half of Americans (52%) believe someone close to them will be infected with the virus. At the same time, many are also discovering — often to their surprise — that their medical insurance has coverage gaps, so if they do find themselves needing care, they might need to dip into their personal or emergency savings to make up the difference.
With the fall open enrollment season approaching, so too is the opportunity to take advantage of previously untapped benefits offered by your employer. In fact, many are now paying closer attention to their workplace benefits during these uncertain times. New Voya research finds that nearly 7-in-10 employees (71%) plan to spend more time reviewing their voluntary benefits as a result of COVID-19 than they did during the last enrollment period. And more than half (53%) plan to make changes to their benefits coverages offered through their employer.
While understanding benefits offerings can sometimes require a little extra “homework,” there are many products that you can access that could provide greater coverage, while keeping costs affordable. Below are three tips to consider to help maximize this opportunity:
Start thinking about your workplace benefits now
Research shows employees only spend 17 minutes electing their benefits, while Netflix users spend an average of 18 minutes deciding what to watch. I get it, everyone is busy — especially in the midst of a global pandemic. But even if your employer hasn’t yet provided details on this year’s offerings, consider getting a jump-start on your homework by checking your company’s benefits materials from last year to get up to speed on what options you might have available this year.
For example, if your company offers group life insurance, see if there are options to increase your coverage amount or add coverage for a spouse. Also, give some thought to changes you may be expecting in 2021 that could impact your benefits needs, like maybe a new baby or dependent in the family. And see if you can find out how open enrollment materials will be shared this year and how you can get more information once open enrollment begins. While many companies are operating with few employees in offices this year, some may provide virtual enrollment benefits fairs and more digital support (e.g., webinars, on-demand videos, Zoom calls, etc.). Plus, personalized online tools and digital assistants can help you better estimate your out-of-pocket expenses.
Supplemental, or voluntary, benefits can help fill an insurance gap
Voya’s own customer data shows that more than 4-in-10 retirement plan participants (44%) have protection or insurance gaps in their coverage. This could put you in a challenging financial situation if you get hit with an unexpected medical expense. For example, the average cost of one day in the hospital in the U.S. is approximately $2,400, with the average patient staying more than four days, according to data from the Kaiser Family Foundation.
Supplemental health insurance products offered through your employer can provide additional protection, and typically at a cost lower than what most people may expect. The cost for hospital indemnity insurance, for example, which pays a daily benefit when you have a covered stay in a hospital, averages between $250 to $300 per year — that’s less than a dollar per day. Plus, voluntary benefits can be particularly useful for more than medical bills. Accident insurance benefits, for example, can be used to pay for anything from living expenses — utility bills, pizza delivery or dog walking — to rides to your next doctor’s appointment. When you experience a qualified accident, that claim payment is yours to spend how you like and need.
HSAs can help pay for unexpected medical costs
A health savings account (HSA) is a medical savings account that is available to employees when they are enrolled in a high-deductible health plan (HDHP). HSAs are funded by pre-tax dollars that are deposited into your account by you or your employer, usually through a payroll deduction. Unlike flexible spending accounts (FSAs), HSAs are not “use-it-or-lose-it” accounts, and your balance carries over each year. Also, unlike your health insurance plan and your FSA, which are generally tied to your employment, your HSA is portable — meaning you own the account. Therefore, if you get laid off or furloughed from your job as result of the COVID-19 pandemic, you can always use your HSA funds to help pay for qualified medical costs. And when you enroll in an HSA, some employers will provide some funding to your account as well.
Plus, HSAs offer triple tax advantages:
1. Contributions are pre-tax and reduce your taxable income.
2. Your HSA funds grow tax-free.
3. When used to pay for eligible medical expenses, HSA withdrawals are tax-free.
Therefore, if your employer offers a HDHP, don’t overlook the benefits of contributing to an HSA. The COVID-19 pandemic has shined a spotlight on the need to be prepared for unexpected medical costs, and HSAs can be a valuable workplace benefit to help protect your family. And if you don’t use the funds this year, or even next, your HSA can be a resource for funding medical expenses in retirement.
In summary, if the COVID-19 pandemic has taught us anything, it’s that we need to be ready for the unexpected. While there are no guarantees in life, making the deliberate decision to focus on your workplace benefits during this fall’s open enrollment season is something each of us can control. Sure, it will likely require a little more effort, but it’s an opportunity you don’t want to miss.