My Employer Offers Health Benefits – What Gaps Might I Have?

Many people get health insurance through their employers, but sometimes that’s just not enough. Some scenarios where you might want coverages beyond the standard health benefits offered at work include:

Changing jobs: According to a 2019 report by the U.S. Bureau of Labor Statistics, you’ll likely hold more than 12 jobs in your lifetime. So you might want supplementing insurance that travels with you, instead of juggling lapses in coverage and dealing with different insurers at each new workplace.

Retirement: You might want a policy that follows you into retirement. That way, you don’t have to replace a policy that expires when you leave your job and potentially be denied coverage because of age and/or health status. Having your own policy protects your insurability.

Cost savings if you buy on your own: Some employers offer other insurances as a voluntary group benefit. If you opt in for coverage, you typically pay the full cost of the plan without any company contribution, usually through a paycheck deduction. In some cases, it may be cheaper to buy these policies on your own.

What types of insurance might I want to buy on my own?

A wide range of insurance can be purchased outside of the workplace to supplement your existing employer-sponsored coverage. Four key ones are:

Life insurance

Many employers offer life insurance as a standard benefit. Policies usually cover one year’s salary or a set amount. Employees may choose to pay for higher coverage, such as a policy that pays out two or five times their salary.

That’s how John Bryant, 54, of Greensboro, North Carolina, initially upped his life insurance coverage. Then the construction materials company where he works went through some challenging times. “I didn’t know if I really wanted to be there anymore, and the other thing is I didn’t know if I was going to be laid off,” Bryant recalls. “So I felt it’s probably not a good idea to have insurance with the company because when I leave, that insurance ends.” With a new baby at the time, Bryant felt it was in his family’s best interest to have additional life insurance separate from his employer. That way, his family would be covered no matter what happened at work.

Learn more about what to look for in a life insurance policy.

Disability income insurance

Not being able to work because you’re hurt or sick can cause financial hardship. In fact, only half of American adults say they have enough savings to cover three months of living expenses if they’re not earning income, according to a 2018 Federal Reserve report.

Disability income insurance helps replace some of your lost income if you get hurt off the job, but most companies don’t offer this as a paid benefit to employees. That includes the small plumbing company in Harper Woods, Michigan, where Kurt Kammer, 49, works. As his family’s main breadwinner, he felt he needed a backup plan, so he purchased his own disability income policy. “You could be out playing baseball and get hurt and not be able to work again for months,” he cautions. Kammer speaks from experience. In 2008, he hurt his knee playing softball. Over time the pain became constant, and he eventually underwent knee replacement surgery. His policy covered some of the wages lost during his three-month recovery.

Learn more about the basics of disability income insurance.

Critical illness insurance

Policies like these pay a lump sum when you’re diagnosed with cancer, Alzheimer’s disease, kidney failure or other covered conditions. You can use the money to help pay for health insurance deductibles, the mortgage, groceries, even travel expenses incurred for treatment. Some plans also reimburse specific amounts for undergoing surgery and chemotherapy, for inpatient hospital stays, and for preventive screenings.

Years ago, Mary Wemhoff, who works with Kammer at the plumbing shop, bought her own cancer policy after her brother was diagnosed with the disease. She saw how costly an illness like cancer can be and how financial worries add to a family’s stress. Wemhoff’s policy proved helpful when she was diagnosed with cancer three years ago at age 73. She has used the lump-sum payout to hire caregivers to drive her to and from treatment, an expense not covered by most private health insurances or Medicare. “It’s been a godsend,” she says.

Learn more about the basics of critical illness insurance.

Long-term care insurance

A long-term care policy helps pay for the daily living assistance and medical care you may need later in life, whether at home, through a community program, or at an assisted living or nursing facility.

Long-term care insurance is designed to help you pay for things you once did on your own but, due to aging and health, are no longer able to manage alone. This includes activities such as grocery shopping, meal preparation and house cleaning, and also such personal services as dressing, bathing or taking medication.

To begin receiving benefits from a long-term care policy, a licensed health practitioner must certify that you are chronically ill, which is defined as needing help with at least two of the six “activities of daily living” (see below) for at least 90 consecutive days, or you need continuous supervision due to a severe cognitive impairment.

The activities of daily living are:

  • Bathing: the ability to clean yourself and perform grooming activities like shaving and brushing teeth
  • Dressing: the ability to get dressed by yourself without struggling
  • Eating: the ability to feed yourself
  • Transferring: being able either to walk or to move from a bed to a wheelchair and back again
  • Toileting: the ability to get on and off the toilet
  • Continence: the ability to control one’s bladder and bowel functions

In-home health care and assisted living facilities are usually expensive, and long-term care insurance is typically more expensive than most other types of insurance.
When employers offer long-term care as a voluntary benefit, it can be an affordable way for employees with existing health issues to get coverage. But if you’re in good health and living with a partner, you may be able to purchase identical protection on your own for less money, advises the American Association for Long-Term Care Insurance.

Learn more about the basics of long-term care insurance.