Most employees are unprepared for a $1,000 medical bill, yet few understand the supplemental health benefits built to cover it
More than half of US workers who had a recent medical event paid at least $1,000 out of pocket, yet only 28 percent say they are very prepared to cover an unexpected expense of that size, according to new research from the Employee Benefit Research Institute (EBRI). The voluntary benefits designed for that gap – accident, critical illness and hospital indemnity insurance – remain poorly understood by many of the workers they are meant to protect.
The findings come from EBRI's Expanding the Benefits Horizon issue brief on employee understanding and enrollment, published August 20, 2026. It is the final installment of a three-part research program funded by Lincoln Financial, a voluntary benefits provider, and draws on a survey of 1,130 benefits-eligible workers. The research identifies understanding and perceived cost as the main barriers.
Supplemental health benefits are the least understood
Self-rated understanding was weakest for supplemental health products. Forty percent of employees said they had a high understanding of critical illness insurance and 35 percent of hospital indemnity, compared with 54 percent for health insurance. Fewer employees reported having these benefits available at all: 28 percent said they were offered accident insurance, 21 percent critical illness and 17 percent hospital indemnity.
Those figures may understate what employers provide. In earlier surveys in the same program, employers were more likely to report offering several benefits than employees were to report having access to them. Workers at organizations with fewer than 500 employees reported lower access to benefits information through email, websites, smartphone apps and social media.
Cost is the stated barrier to voluntary benefits enrollment
Employees who skipped voluntary benefits most often cited cost. EBRI suggests many may not have weighed the extra premium against the out-of-pocket costs the coverage could offset after a medical event. When respondents read brief, plain-language descriptions of what each benefit covers and how it pays out, their interest in enrolling rose markedly, although EBRI cautions that interest does not guarantee enrollment.
Premium cost is also partly within employers' control. A class action alleging broker commissions consumed 37 percent of Macy's supplemental benefit premiums centers on the same three products, and plaintiffs are building similar voluntary benefits lawsuits from employer Form 5500 data.
Medical bills are straining workers' finances
Nearly half of employees (47 percent) reported at least moderate financial difficulty because of medical events, and 37 percent had a medical bill sent to collections. Fifty-seven percent have delayed medical care, 26 percent within the past year, and just under six in 10 of them cited cost as the main reason.
Among employees already enrolled in supplemental health coverage, 57 percent described it as very important. Many said losing it would mean more worry, lower productivity, more absences and greater reliance on loans or retirement savings. Those effects echo a Zurich study linking financial resilience to employee performance and retention, which found only half of workers could cover a few months without income.
The research points to the enrollment materials themselves: plain descriptions of each supplemental product, a clear comparison between the premium and a typical out-of-pocket bill, and benefits information that reaches workers at smaller sites.
