It’s Halloween time! Along with consuming copious amounts of sugary treats, this is the time of year when it’s customary to put on a mask and pose as something you’re not.

While this annual game of dress-up is all done in fun, it seems a fitting time to discuss the dangers of deceiving coverage because, just like many things on Halloween, things are not always as they seem.

Coverage Gaps

Sometimes danger doesn’t stem from ghosts or ghouls, but instead a simple misconception can leave employees vulnerable to risk.

The common expectation is that health insurance will be there to protect you when you need it. Unfortunately, the reality is that coverage gaps are increasing. On the plus side, there are supplemental plans that can be layered on top of the primary plan to add additional coverage.

However, not all supplemental plans are alike. Some, like expense reimbursed insured plans, cover your everyday deductibles and coinsurance and the unexpected expenses like hospital stays, x-rays and more. Others, like worksite voluntary (such as hospital indemnity and cancer plans), provide coverage within a defined scope—meaning you have to meet the predetermined qualifications (like hospitalization or cancer) for any coverage to kick in.

Misconception and Deception

This is where the confusion comes in.

At first glance, these types of supplemental plans can seem very similar. But a worksite voluntary plan masquerading as an expense reimbursed insured plan can leave employees blindsided.

Due to the misconception, many employees don’t realize that they still have gaps in coverage that won’t be covered by their worksite voluntary plan because of the defined scope. For example, if an employee had a cancer policy but had a heart attack, no coverage would kick in because the conditions of the policy weren’t met.

So when an employee suffers a health event expecting to be covered, but isn’t because the conditions aren’t met, the employee is now open to huge risk—both health and financial.

What Now?

How can you avoid these dangers?

If you’re an employee and you’ve been given the option to opt into a supplemental plan, chances are it’s a worksite voluntary plan. (Expense reimbursed insured plans are employer-funded.) While worksite voluntary plans have more limited coverage, they can still be helpful if you understand these limitations and aren’t surprised by them. Make sure you look under the mask.

If you’re an employer, when considering health benefits to offer to your employees, seek health insurance with far-reaching value to give them a true sense of security. If you do offer worksite voluntary plans, make sure your employees understand that these plans have coverage limitations.

If you’re a broker, make sure you do your homework and dig into the different categories of supplemental. Make sure you understand the product you’re bringing to your client. Don’t be duped, and falsely present one as the other!

Cheat Sheet

Here are a few basic differences between the supplemental categories.

Expense Reimbursed Insured Plans

• Tax savings
• Employer funded
• Can carve out by employee class as defined by the employer
• Insurance
• Not subject to event-driven qualifications

Worksite Voluntary Plans

• No tax savings
• Employees opt into
• Employee or employer funded
• Insurance
• Event-driven coverage that requires specified event (or disease) for coverage to kick in