For once, headlines about the job market aren’t all doom and gloom. As employers do more to attract and retain top talent in a candidate’s market, they’re getting generous with their benefits packages. Offering supplemental insurance through employer-sponsored plans is one way they sweeten the deal. These plans fill gaps in traditional health insurance with lump-sum payouts, so you have extra cash in your pocket when the going gets tough.
But just because your job offers a supplemental plan doesn’t mean you have to pick it instead of buying your own plan individually. Like everything in life, the decision depends on many factors that are unique to you. So, before you rush to sign up for an employer-sponsored supplemental plan (or knock the idea outright), consider these pros and cons.
First, the Pros: It’s Easy, Fast and Possibly More Affordable
If your employer offers an accident, hospital indemnity or critical illness plan, enrollment may be as simple as filling out a form and handing it to human resources. And that plan may come with several benefits:
- As with traditional health insurance, you may be able to have your supplemental premiums automatically deducted from your paycheck.
- You won’t need to compare plans, shop around or stress about a mountain of choices, since a few available options are typically preselected by your employer.
- Your employer may be able to negotiate a lower commercial rate, which can translate to a lower monthly cost for your basic coverage. Just make sure to consider that if you’re young and healthy, it might not be cheaper for you: Group rates tend to be averaged out across all employees.
- Human resources at your work may be able to connect you with a benefits administrator to help you through the claims process.
As long as your needs are relatively simple and it looks like you really only need a safety net for yourself — and no dependents — then the ease and convenience of an employer-offered plan might be best for you. All that said, it’s not a one-size-fits-all solution.
Cons: It’s Not as Flexible, Customizable or Permanent
On the other hand, what you gain in convenience with an employer-sponsored supplemental plan you may lose in customization. That’s especially true if you’d like to a plan to fit specific medical needs, if you’re planning a future job change or if you have dependents:
- While they may be portable, employer-sponsored policies sometimes have coverage limitations if you leave your job. This can make it more difficult to keep policies intact at the same rate.
- If your company decides to stop offering supplemental insurance, your plan may end — whether you want it to or not.
- Some employers may only offer supplemental insurance during open enrollment, restricting your ability to sign up during the rest of the year. Outside of your employer, you can enroll in a supplemental plan at any time.
- Plans purchased through work may not offer the ability to customize coverage, meaning you won’t get to target your current health insurance gaps.
- Rate discounts in employer-sponsored plans may even out if you add dependents to your plan, which can raise the cost above what you’d buy directly from an insurer.
What If I Can’t Decide?
If you’d like to explore all of your options, think about working with a broker to shop around individually, then compare the policies and premiums you like with those of your employer’s choices.
You might find that the options you have buying insurance through employer benefits work just fine, or your search could lead you to realize that you need a little more flexibility to build a plan that really does what you need it to. Either way, the choice is yours to make. Just do your homework before you make it.