Supplemental health benefits can ease rising health costs 

The healthcare affordability landscape is the rockiest it’s been in decades. Mercer’s National Employer Survey reports the average cost of employer-sponsored health insurance reached $17,496 per employee in 2025, and next year employers expect the largest health benefits cost increase in 15 years. Yet offering comprehensive medical benefits and a competitive total rewards package remains tables stakes for most employers.

With many organizations feeling they are already pushing the limits in terms of how much cost they can share with employees through plan design and premium contributions, it may be time to consider a new approach. Supplemental health benefits are a multi-faceted cost containment strategy that can save money for both employer and employee while supporting employee overall well-being.

Versatility of bundling supplemental health plans

During the last several years, most prominent core medical carriers joined the supplemental health marketplace. This made it possible and valuable for employers to consider bundling and integrating these programs, especially with supplemental health plans helping to gap-fill the financial and emotional impact of planned or unplanned health events. Bundling supplemental health is a proven strategy to deliver cost savings and program efficiencies from medical fee reductions and lower core benefit cost such as long-term disability.

In addition, bundling core and supplemental benefits with one carrier can simplify administration, improve data integration and allow more cohesive claims processing. Employees may also benefit from this arrangement, with a more seamless reimbursement process. For example, say an employee’s son sustains a sports injury during his baseball game. They go to the emergency room for X-rays and treatment. The medical claim is sent to the common medical/supplemental health carrier. With integrated data, the carrier can engage and deliver a notification to the employee about possible supplemental health benefits to help the employee complete that claim process. In this case, the employee received a cash benefit from their accident plan, to help cover out-of-pocket costs.

While benefits vary by carrier, plan design and claim process, offering bundled benefits has the potential to increase employee benefit participation, utilization and satisfaction.

Employer-funded supplemental health

Employers can fund baseline supplemental health plans that are packaged with the election of a high-deductible health plan as a way to incentivize health plan migration. Employer-funded supplemental health plans can help make more meaningful plan design changes possible while still safeguarding healthcare access and affordability for employees.

There may be scenarios where the cost for an employer to fund a $3,000 critical illness benefit per employee enrolled in an HDHP is considerably less than the actuarial value of employees and dependents enrolling in a lower deductible medical plan. This can be a win/win — employers save on medical premium spend, while making the HDHP plan richer through employer-funded supplemental health, and employees gain supplemental health plan benefits with no additional paycheck deductions.

Innovation within supplemental health plan designs

As part of a total rewards package, employees look for benefits that can provide a sense of stability, so they’re prepared for unexpected events and challenging times in their personal lives. Rapid expansion and innovation in the supplemental health plan market is allowing employers to offer support for women’s health, mental health, building a family, and more.

It’s important to regularly review your current voluntary benefits program, including supplemental health plans, to ensure that the benefits not only remain competitive as the market continues to expand, but also support your organizational healthcare affordability objectives. A thoughtful supplemental health program can be a creative response to today’s healthcare cost environment that helps you position your organization and your employees to better weather the challenges of rising health care costs.