New Voluntary Benefit: Trauma Coverage
Recently we were developing voluntary benefit product recommendations for a county government, when we came across a plan that was new to us: Trauma Coverage.
The ongoing effects of trauma on victims include depression, addiction and financial hardship.
New voluntary benefits are coming into the market at a regular pace these days and while the established canon of VB products answer some very fundamental questions -- How will I pay my bills if I'm hurt or sick and can't work? What will happen to my family's finances if I die? -- many new VB products provide benefits for much more specific situations.
That's as it should be. If you're a benefits broker, employer, or HR professional and you're thinking strategically about benefits, one of the big questions you should be asking is: How can I use voluntary benefits to provide meaningful choices to an employee population with a wide variety of backgrounds, ages and needs? If you want employees to be well protected and you want to reap the rewards of higher retention, then employees have to perceive that the benefits being offered to them are valuable. Today's voluntary benefits market provides more opportunity than ever for customizations that add that value.
Who Came Up With This?
The Trauma Coverage product was developed by the Society for Trauma Education and Empowered Recovery (STEER), which positions itself as both an educational resource and a provider of recovery resources for traumatic events. The plan is underwritten by Lloyd's of London, known for being one of the oldest, most established entities for creatively underwriting risk.
Keith Richards' hands are insured by Lloyd's of London. I swear this isn't just an excuse to put Keith in an article.
The story told by the carrier is that the product was inspired by an act of violence in the local community -- an armed gunman attacked a church. It quickly became clear that social safety nets and traditional insurance didn't adequately address the realities of trauma recovery, and that the ongoing effects of trauma on victims included depression, addiction and financial hardship. The organization developed what they claim is "the nation's first workplace violence and disease benefit", which "helps individuals and families receive comprehensive trauma recovery through affordable insurance."
The Trauma Coverage plan covers incidents in three categories based on incident type and where the traumatic event happens: An "Everywhere" category, an "At Work" category and an "At School" category.
The Everywhere category includes benefits for aggravated assaults, sexual assaults, mass shootings and terrorist acts. The At Work and At School categories provide benefits for infectious disease and traumatic violence.
Participants can elect one of four plan options: Bronze, Silver, Gold or a Family plan. Benefits come in four categories:
Trauma Counseling for Individuals and Families
Trauma counseling is available if you experience a covered event or witness a violent incident at work or school. Trauma or bereavement counseling can also be provided to immediate family members.
The financial security benefit allows you to receive 100% of your regular pay while unable to work due to a trauma, without a waiting period for benefits. The maximum payout is $5000 - $20,000 depending on plan selected and includes a a death benefit of $50,000 - $200,000.
Get reimbursed for trauma recovery care services, including medical, dental, vision, hearing, pharmaceuticals, addiction to pharmaceuticals, or lost wages of a family member providing supportive services. You have control over your care providers and the type of care you choose to receive, including elective reconstructive and cosmetic surgeries. Maximum annual benefits range from $5000 - $20,000 depending on plan option.
What is this product going to do when someone has to actually use it?
The Fine Print
When we dig into a proposal for a client, we spend a lot of time sifting through the policy language. With voluntary benefits, you can lay out the major benefits and costs in a spreadsheet and still only have half the picture. If we recommend a product to a client, we're also going to to discuss exactly what is covered, what's excluded, whether benefits reduce at a certain age, maximum payouts and anything else that impacts the true value of those numbers on the spreadsheet. In other words: What is this product going to do when someone has to actually use it?
The policy language appeared to be well defined and not restrictive in a way designed to limit claims payouts. For example, I'm always going to be wary about coverage against "terrorist attack" and I was glad to see that the policy didn't try to define terrorism as only the act of a foreign agent or named organization.
A benefit category like "infectious disease" can hide some serious claims limitations too, so I was happy to see the definition driven by a federal standard -- the CDC's National Notifiable Diseases Surveillance System list -- not by the plan's underwriters. The CDC list includes over 100 diseases, from anthrax to zika, and now includes COVID-19 (for a related topic, see my article on How Voluntary Benefits Work with a COVID-19 Diagnosis).
Moving over to the list of Exclusions I found the majority to be items that would appear on any disability or accident policy. The Acts of War exclusion was written in a way that doesn't interfere with the terrorism benefits. And interestingly, there were two whole clauses excluding payouts for acts of violence involving biological or chemical materials, or incidents that involve nuclear radiation in any way.
So, is trauma coverage ready to take it's place in the voluntary benefits mainstream? It remains to be seen. The county government didn't bite this year, but we now have another interesting option to help brokers and clients with the ongoing customization of their benefits packages. Maybe it belongs in yours. Reach out to us, we'll walk you through it.