Employers that continue to offer dental insurance, vision insurance, accident insurance and critical illness insurance could end up with happier employees who are easier to retain, even if the employees have to pay for those benefits themselves.
Prudential Financial presented data supporting those conclusions in a summary of a recent online survey of 760 employers and 3,096 people with full-time jobs in the United States.
Prudential organized the survey to look at how access to supplemental health benefits and other benefits affects an employer’s culture and ability to keep good employees.
About 66% of the employees surveyed said their benefits showed that their employers cared about them.
See also: Health insurers’ negative outlook remains, as high medical costs erase margins
Access to supplemental health benefits had a noticeable correlation with how likely the employees were to say their benefits met their needs.
About 42% of the employees with access to critical illness insurance said their benefits met their needs. Only 34% of the employees without access to critical illness insurance said their benefits met their needs.
When Prudential asked about how removing certain kinds of benefits might affect employee retention, it found that 80% of the employee survey participants would consider leaving if their employers dropped health coverage; 54%, if their employers dropped retirement benefits; and 50%, if their employers dropped dental insurance.
CNO Financial on supplemental health benefits: Importance is growing
Executives from another insurer, CNO Financial, recently talked about the importance of supplemental health benefits during an online investor briefing.
CNO executives told investors that the importance of supplemental health benefits is growing because the packages of employer-paid benefits that U.S. workers are getting are shrinking.
CNO believes, based on private LIMRA survey data, that the percentage of employers offering major medical coverage may have dropped to 61% this year, from 78% four years ago.
“Less than half of employers provide dental or vision coverage to their employees,” Karen DeToro, president of the company’s worksite division, said. “In 2025, 88% of employees with major medical were enrolled in a plan with a deductible, and that average annual deductible was over $1,800.”
Meanwhile, DeToro said, only about half of Americans can come up with enough cash to pay an unexpected $1,000 bill.
Supplemental health benefits got insurers through difficult economic times before
During the “dot-com crash” that hit around 2000 and the 2007-2009 global financial crisis, many life, health and annuity issuers coped with uncertainty in the investment markets and uncertainty about major medical insurance regulation by focusing on the sale of supplemental health benefits products and other products with short terms, prices that are easy to adjust and minimum exposure to the investment markets.
Andrew Sullivan, the chief executive officer of Prudential, recently said during a conference call his company held to go over results for the second quarter with securities analysts that his company is interested in acquiring supplemental health benefits issuers.
Ellen Cooper, the CEO of Lincoln Financial, talked during her own company’s earnings call about efforts to deepen the company’s presence in the supplemental health market.
“Supplemental health premium rose 28%, year over year, and now represents 7% of our in-force premium, up from 5% a year ago,” Cooper told the analysts.
What it means: This may be another period when insurers see the supplemental health benefits market as a haven from economic and major medical policy storms.
A surge into the sector could create new competition for existing players, but it could also expand overall demand for supplemental health products by increasing the amount of money supporting supplemental health marketing campaigns.
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