As employers change their health coverage, consider gap insurance

Don’t laugh, but I’d rather watch classic shows from over half a century ago than most of what I see on network TV today. “The Andy Griffith Show” (or as my kids describe it, the “Barney” show) is a particular favorite in our house and is watched almost every night after dinner.

Since my demographics are unlikely to be the target of these shows, the ads tend to focus on topics of interest to a more seasoned audience. At this time of year, it seems like pretty much all the ads are focused on open Medicare enrollment and the importance of having extra coverage to pay for what Medicare doesn’t want.

While additional health care coverage is vital for our senior population, what receives much less attention is how useful similar plans can also be for families who haven’t saved dozens of dollars. thousands of dollars for a possible medical emergency. While the most recognizable provider of these types of additional plans or gaps is probably Aflac, there are many providers you can work with.

These different policies can vary both in cost and in what they cover. For example, accident insurance covers expenses resulting from accidental injury. It can be something like falling off a ladder while hanging Christmas lights, cutting yourself while chopping veg for a family reunion, or stepping on glass decoration while climbing the tree.

Another popular type is called hospitalization cover and, as the name suggests, only comes into play if you are hospitalized as a result of any of the accidents listed above or any other event that requires travel to the hospital. ‘hospital. A third popular type is called critical illness coverage, and it helps supplement out-of-pocket costs you’ll have to incur if you’re diagnosed with serious illnesses such as cancer, heart disease, or stroke.

You may be wondering. If my employer already offers health insurance, why should I bother spending my hard-earned dollars to top it up with more? The answer is, in recent years, most employers have switched to high-deductible plans that only start paying the bills after a deductible of several thousand dollars has been reached. And even then, the insurance company pays only a portion of the costs until the individual’s maximum cost has been paid.

According to the Keizer Family Foundation, in 2020, the average family deductible for these types of plans was just under $ 5,000. For plans with this size deductible, the maximum amount that registrants should be prepared to cover could be more than double that amount.

Therefore, the question you should ask yourself is: am I prepared to face an event that could cost me up to $ 10,000 in out-of-pocket expenses while suffering a loss of wages if I cannot work? during this medical emergency? If the answer is no, you will likely need to consider supplementing your employer’s health care with this type of “gap policy.”

The good news is that these policies are relatively inexpensive, are transferable if you change jobs, generally don’t require medical exams, and can often be paid for with pre-tax dollars. So this Christmas, consider giving a loved one the peace of mind of knowing you’re prepared for a medical emergency. It is truly the gift that can be returned.

(Past performance is not a guarantee of future results. Advice is general in nature and not intended for specific situations)

Luke Davis is the Director of Operations and Compliance at Stewardship Capital in Independence.