Caring for employees and your bottom line
Supplemental Gap Medical Insurance can help dealerships reduce healthcare costs and improve retention.
Rising healthcare costs are, unfortunately, nothing new. Medical cost increases consistently outpace other economic inflation.1 Annual U.S. healthcare spending reached a new per capita high of $14,570 in 2023, up 7.5 % from 2022, based on the latest available figures.2
As more than half the population has job-based health insurance,3 these escalating costs are obviously of great concern to both employees and employers. Choosing a higher deductible plan can help keep premiums lower, but that trade-off doesn’t look as appealing to employees when their deductibles and other out-of-pocket expenses increase. Those out-of-pocket costs rose by 5.7% between 2022 and 2023.4
While auto dealerships need to control their overall costs, shifting more healthcare expense burden to employees poses a risk in an industry where talent retention is a serious challenge. (NADA estimates annual employee turnover at dealerships is over 46%.5) Fortunately, there is a way to help alleviate costs for dealerships and their workforce while also boosting retention: Supplemental Gap Medical Insurance.
Supplemental Gap Medical Insurance provides coverage to help employers and employees better manage the growing financial burden of high-deductible healthcare. Gap Medical coverage does this by helping employees manage out-of-pocket expenses when the primary health insurance deductible has not been met.
If the employee incurs an out-of-pocket expense that would have been covered by their primary insurance, the Supplemental Gap Medical plan kicks in to cover these expenses (up to the specified policy limit).
Most gap medical plans are paid for by employers (although voluntary plans are available) and make an attractive addition to a benefits package. As long as an employee is enrolled in the employer-provided health plan, benefits are guaranteed to be issued, regardless of health status, pre-existing conditions, age, gender or claims history.
Zurich’s Supplemental Gap Medical Insurance is flexible and customizable, so it can work within your dealership’s specific workforce needs. It can be set up with high-deductible plans that use health savings accounts.* Employers can choose between different inpatient and outpatient benefits or a combined benefit with both coverages, and benefits for doctor’s office visits can also be included. As benefits are paid directly to the medical service provider (when there is an existing assignment of benefits), claim forms are not necessary in most cases.
Adding another insurance coverage to existing plans might not immediately suggest cost-effectiveness, but the example scenario below illustrates how this strategy can result in truly meaningful savings for your business and your people.
*Some product configurations may not be compatible with high-deductible health plans involving a tax-advantaged health savings account (HSA).
Rising healthcare costs are, unfortunately, nothing new. Medical cost increases consistently outpace other economic inflation.1 Annual U.S. healthcare spending reached a new per capita high of $14,570 in 2023, up 7.5 % from 2022, based on the latest available figures.2
As more than half the population has job-based health insurance,3 these escalating costs are obviously of great concern to both employees and employers. Choosing a higher deductible plan can help keep premiums lower, but that trade-off doesn’t look as appealing to employees when their deductibles and other out-of-pocket expenses increase. Those out-of-pocket costs rose by 5.7% between 2022 and 2023.4
While auto dealerships need to control their overall costs, shifting more healthcare expense burden to employees poses a risk in an industry where talent retention is a serious challenge. (NADA estimates annual employee turnover at dealerships is over 46%.5) Fortunately, there is a way to help alleviate costs for dealerships and their workforce while also boosting retention: Supplemental Gap Medical Insurance.
Supplemental Gap Medical Insurance provides coverage to help employers and employees better manage the growing financial burden of high-deductible healthcare. Gap Medical coverage does this by helping employees manage out-of-pocket expenses when the primary health insurance deductible has not been met. If the employee incurs an out-of-pocket expense that would have been covered by their primary insurance, the Supplemental Gap Medical plan kicks in to cover these expenses (up to the specified policy limit).
Most gap medical plans are paid for by employers (although voluntary plans are available) and make an attractive addition to a benefits package. As long as an employee is enrolled in the employer-provided health plan, benefits are guaranteed to be issued, regardless of health status, pre-existing conditions, age, gender or claims history.
Zurich’s Supplemental Gap Medical Insurance is flexible and customizable, so it can work within your dealership’s specific workforce needs. It can be set up with high-deductible plans that use health savings accounts.* Employers can choose between different inpatient and outpatient benefits or a combined benefit with both coverages, and benefits for doctor’s office visits can also be included. As benefits are paid directly to the medical service provider (when there is an existing assignment of benefits), claim forms are not necessary in most cases.
Adding another insurance coverage to existing plans might not immediately suggest cost-effectiveness, but the example scenario below illustrates how this strategy can result in truly meaningful savings for your business and your people.
*Some product configurations may not be compatible with high-deductible health plans involving a tax-advantaged health savings account (HSA).
Rates are for illustrative purposes only
Assumes 90 are enrolled in Tier 1 (employee only), 15 are enrolled in Tier 2 (employee + family)
A U.S. Chamber of Commerce survey showed employees ranked health coverage as the single most important benefit employers can offer.6 All industries need to address rising healthcare costs, but with that ongoing employee retention issue, it’s especially urgent for auto dealerships.
“The best companies to work for and the companies that successfully retain employees provide access to the best insurance options,” said Zurich’s Ron Lefkoski, Head of Consumer Solutions & Voluntary Benefits, Accident & Health. “With Zurich’s Gap Medical, employers can save money and provide even better coverage for their employees.”
- Rakshit, Shameek, et al. “How does medical inflation compare to inflation in the rest of the economy?” Peterson-KFF Health System Tracker. 2 August 2024.
- McGough, Matthew, et al. “How has U.S. spending on healthcare changed over time?” Peterson-KFF Health System Tracker. 20 December 2024.
- Keisler-Starkey, Katherine and Lisa N. Bunch. “Health Insurance Coverage in the United States: 2023. Current Population Reports.” United States Census Bureau. September 2024.
- Luhby, Tami. “Health care costs at work set to rise steeply in 2024.” CNN. 31 October 2023.
- Toussi, Sean. “From Turnover to Retention Strategies to Combat Understaffing in Car Dealerships.” Digital Dealer. 22 October 2024.
- Mahoney, Katie. “New Survey Shows Health Benefits Rank Most Important to Employees.” U.S. Chamber of Commerce. 2 December 2022.
Please contact:
Ron Lefkoski
Head of Consumer Solutions
& Voluntary Benefits
Accident & Health
267-261-0641
ron.lefkoski@zurichna.com
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10 SUPPLEMENTAL GAP