Could Your Health Insurance Use a Boost?

By Thomas R. Giddens, Senior Vice President, Aflac

Insurance helps protect against the risk of the unknown, and in the case of major medical insurance, safeguards consumers from the high cost of medical care by providing coverage for specific health care services. Although the cost for insurance is far less than medical care would be if paid for out of pocket, most workers typically pay a monthly premium and either copayments or coinsurance.

It is important to be aware that even with employer-sponsored group major medical insurance, workers are responsible for paying certain expenses if medical care is needed. A deductible, which is the amount a policyholder must pay for covered services in accordance with the plan before benefits are paid, may be required. For example, a member of a high-deductible major medical plan may be required to pay for the first $1,000 of medical care before receiving coverage under the terms of his/her benefits plan. A copayment, the specified dollar amount or percentage required to be paid by workers in connection with certain services such as doctor's visits, prescription drugs, hospital stays, etc., may also be required.

Considering those expenses, would you be financially prepared for unexpected health events? Whether you're a salon owner who's concerned about your staff, or an independent contractor who needs to make sure you and your family are covered, insurance policies are available that can provide a wider safety net than major medical insurance alone.

The challenging economy of the past several years has taken a toll on salons' bottom lines, making it even harder for owners and stylists to pad their personal savings accounts for a rainy day. A recent study, the 2011 Aflac WorkForces Report, revealed that 34 percent of American workers believe that having enough money to meet their current expenses is their biggest financial challenge.

Because wages are growing slower than health care spending, many consumers have a hard time affording the out-of-pocket costs that major medical insurance doesn't cover. The study found that 51 percent are not at all prepared to pay out-of-pocket expenses related to an unexpected illness or accident, including multiple copayments, travel costs to receive care, tests that aren't covered by insurance, and follow-up home care. It also revealed that 31 percent have less than $500 on hand to pay out-of-pocket health expenses and 47 percent would have to borrow money to pay those costs. If you're one of those who isn't prepared for unexpected expenses, the added financial consequences of missing work due to your or a family member's health emergency could be overwhelming.

Salon owners are looking for ways to keep costs down without sacrificing relationships with their staff. Retaining talented stylists and employees who keep clients happy is a key to success for salons, and high turnover can sabotage an owner's best efforts to grow the business. When asked to name one thing employers could do to keep them in their current jobs, 44 percent of employees said, "Improve my benefits package."

The Aflac study revealed that offering robust benefit options while staying within a business budget is a significant challenge for 63 percent of small companies. So how do you provide more without spending more? The answer is simple: voluntary or supplemental insurance.

Why Voluntary Insurance?

The voluntary insurance market has seen steady growth over the past several years and has found an increased uptick due to the health reform legislation, which has resulted in many workers being faced with a reduced benefits package.

Voluntary insurance policies allow business owners to offer robust benefits packages to employees at no direct cost to the company. Simply put, voluntary options help employers protect their businesses, their finances, and their most valuable asset — workers.

Providers like Aflac offer supplemental insurance plans that pay policyholders cash benefits for covered events to help with daily living expenses, including copayments, rent, mortgage, car payments, gas and groceries, while they are away from work recovering from an injury.

A very real connection exists between health and finances — a workers' financial stability can be threatened by an unexpected illness or accident. Voluntary insurance options are simple, competitively priced, and typically have no direct cost to employers.

By making voluntary insurance plans available, salon owners can enhance their benefits packages to recruit and retain employees, differentiate themselves from competitors, and provide workers with the additional policy choices that best suit their needs. Voluntary insurance plans are a cost-effective solution to help employees with rising out-of-pocket medical expenses.

Thomas R. Giddens joined Aflac in 1983 as assistant vice president in the Marketing department before serving in the field for more than 20 years. In 2007, his numerous achievements and contributions were recognized when he became the youngest member of the Aflac Sales Hall of Fame. Most recently he was appointed senior vice president, director of Sales. For more information about Aflac, call 1-800-99-AFLAC (1-800-992-3522) or visit

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