The increasingly important role of supplemental benefits

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A traditional health plan usually includes medical, hospital and pharmacy benefits. What’s happened over the last 10 years is health plans and employers have started to realize that 80 percent of covered individuals don’t use those benefits. And given that benefits are a differentiator in a highly competitive job market, employers are looking for any advantage as they try to retain and attract talent.

“Those who are younger and healthy don’t often visit their doctor, frequently visit the hospital or regularly fill prescriptions,” says Sana Hashmi, vice president and general manager at FirstLine Benefits. “So, how can these people be engaged through benefits in a way that encourages or facilitates a healthy lifestyle? That’s where supplements have come in to fill the gap.”

Supplemental benefits, which typically fall outside of the traditional employer-provided medical and hospital benefits, tend to be more focused on wellness and well-being. They provide coverage for care such as vision and dental, as well as over-the-counter products, and can offer offsets for fitness and nutrition programs.

Smart Business spoke with Hashmi about supplemental benefits and how they’re finding a place within employer health plans.

How do supplemental benefits encourage healthy behaviors?

Medical benefits are largely reactionary — something happens that causes a person to engage with the health care system. Supplementary benefits are more proactive in the sense that they encourage behaviors or purchases that are more preventative. Coverage for topical antibiotics, for instance, could prevent an infection that would require a more serious medical intervention. They’re really designed to offset the costs of tools people could use in their everyday life to help either prevent or reduce the need for acute care.

Why should employers offer supplemental benefits?

During the COVID pandemic, access to products such as facemasks and hand sanitizer made a big difference in preventing infection. These simple over-the-counter solutions, which were previously overlooked by many, became front and center. For employers, it is much better to make the investment up front to give people access to these types of tools to help protect their workforce and avoid extended absences.

As costs rise, some people may begin to make tradeoffs in their spending that could come at the expense of their health — for instance, sacrificing a gym membership or a wrist brace to pay for other, more pressing products. By offering comprehensive solutions that help alleviate some of those pain points, employers can both help solve these immediate issues while also reducing the stress many experiences when having to make such tradeoffs. Supplementary benefits could be a great tool to keep a workforce healthy and happy, and it could be a differentiator in a very competitive labor market.

How do employers get the most out of their supplemental benefits program?

Those who use supplemental benefits say they are valuable to them. In fact, employees who have access to supplemental benefits are more likely to stay with their employer health plan than those who do not. That makes having them a great promotional tool, and an employer’s health plan provider can help communicate those benefits to employees.

Employers should reach out to their health plan to get examples of how others have done it, what they found valuable, how they configured it and what’s worked in their market. Even if that means just having the conversation, it’s a way to learn a little bit more about an up-and-coming category.

Health care is changing. Benefits engagement now starts at the beginning of the funnel, offering people tools to maintain a healthy lifestyle and largely stay out of the health care system. Supplemental benefits help eliminate some of the barriers to good health such as affordability and access, trying to engage people when they’re healthy, rather than when they’re dealing with a catastrophic issue. Employers can engage employees, help them make healthier choices and remove some of those barriers that they may be dealing with. ●

INSIGHTS Insurance is brought to you by FirstLine Benefits

Sana Hashmi

Vice president and general manager
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