Filling Health Plan Holes

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Some employers are thinking about using hospital indemnity plansand other limited-benefit medical plans to fill in gaps in majormedical coverage.

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Major players in the worksite supplemental health market includeunits of companies such as Aflac Inc., Columbus, Ga.; AllstateCorp., Northbrook, Ill.; Assurant Inc., New York; and UnumProvidentCorp., Chattanooga, Tenn.

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"We feel like there's a tremendous opportunity here," says MattPurrington, a UnumProvident supplemental insurance executive. "Mostof the major players in the worksite market either have or aredeveloping supplemental medical products."

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Rising co-payment levels, coinsurance rates and employee premiumcontributions are responsible for some of the gaps in insuredworkers' coverage.

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The average employee contribution for family coverage hasincreased to $226 per month this year, up from $129 in 1999,according to a paper released by the Henry J. Kaiser FamilyFoundation, Menlo Park, Calif.

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Deductibles are also rising, and federal law requires sponsorsof health savings account programs to set health insurancedeductibles high.

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Although major medical deductibles must be high, HSA holdersalso can own policies that pay lump-sum benefits or pay a flatamount for each day that the insured is in the hospital.

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Colonial Life and Accident Insurance Company, Columbia, S.C., aunit of UnumProvident, is one example of a company that hasdesigned a group hospital indemnity product specifically tocomplement HSAs.

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Allison Bell

Allison Bell, ThinkAdvisor's insurance editor, previously was LifeHealthPro's health insurance editor. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached at [email protected] or on Twitter at @Think_Allison.