Only 28% of benefits-eligible workers feel very prepared for a $1,000 medical bill, and many don’t know their employer already offers coverage built for that problem. That’s the core finding of new research from the Employee Benefit Research Institute (EBRI) and Lincoln Financial, covered by Insurance Business America on October 2, 2026. Part of the gap is the explanation and part is the price. That supplemental health awareness gap is where independent agents come in, because agents can work on both halves of it.
Premier Health Solutions is a third-party administrator based in Frisco, Texas, that has been administering health and supplemental benefit plans since 2012. PHS works with independent agents and agencies across 48+ states, partnering with A-rated insurance carriers. PHS doesn’t sell insurance. Licensed independent agents sell the accident, critical illness, hospital indemnity and other products discussed here, and PHS handles the enrollment, billing, member services and agent support behind them. Below, we look at what the EBRI data says, where the headlines simplify it, and what agents can do with it heading into enrollment season.
What the EBRI research found
Medical bills of $1,000 or more are common, savings to cover them are thin, and supplemental health coverage is among the benefits workers understand least. The data comes from EBRI Issue Brief No. 663, published August 20, 2026. It’s the third report in a series funded by Lincoln Financial, and it’s based on an online survey of 1,130 benefits-eligible workers ages 20 to 64, fielded in October 2025.
| Finding | Share of workers |
|---|---|
| Had at least one medical event costing more than $500 in the past five years | 73% |
| Paid $1,000 or more out of pocket for their most recent medical event (among those with a recent event) | 53% |
| Feel "very prepared" for an unexpected $1,000 expense | 28% |
| Have nothing saved for unexpected medical expenses | 44% |
| Have had a medical bill sent to collections | 37% |
| Have delayed or avoided medical care because of cost | 57% |
| Still experiencing financial difficulty from past medical events | 45% |
| Report high understanding of hospital indemnity / critical illness insurance (among workers enrolled in each) | 35% / 40% |
Put the second and third rows side by side and you have the whole story. More than half of workers with a recent medical event paid at least $1,000. Barely a quarter feel very prepared for that same bill.
The supplemental health awareness gap, in one chart
Employers offer supplemental health coverage far more often than employees realize, and employees who do know about it mostly enroll. EBRI compared what workers said they're offered against what employers reported in the series' 2025 employer survey of 408 companies.
| Product | Employers that say they offer it | Employees who know they're offered it | Enrolled, among employees who know |
|---|---|---|---|
| Accident | 46% | 28% | 70% |
| Critical illness | 27% | 21% | 53% |
| Hospital indemnity | 25% | 17% | 61% |
The accident row is the one to remember. Nearly half of employers say they offer it. Barely more than a quarter of workers know it's there. Of the workers who do know, seven in ten sign up.
One caveat: these are two different surveys of two different groups, and EBRI notes the gap can also reflect eligibility rules, plan design and what people remember. Treat it as directional, not as a precise count of workers missing out. The direction is still hard to argue with.
Where the headline simplifies
The coverage frames this as an awareness problem with a plain-language fix. The full report says it's awareness and cost together, and agents who only fix the first half will still lose the sale. Here's where the source document is more careful than the coverage:
| What the coverage says | What the EBRI report shows |
|---|---|
| More than half of workers spent four hours or less reviewing enrollment materials | It's far more than half. 86% spent four hours or less, 45% spent an hour or less, and the median was two hours. |
| Interest in enrolling rose substantially after plain-language descriptions | EBRI's summary also says interest rose, but the published figures show interest only after reading, among workers not already enrolled, with no before-reading baseline. Most of that interest is "somewhat," not "very." See the table below. |
| "The prior barrier was not cost or resistance. It was comprehension." | Among the small group of workers offered supplemental health coverage who didn't enroll, the top reason was believing their existing coverage was enough, followed by affordability. Asked what would make them enroll, the top answer for every product was "if I could afford it." EBRI calls it a combined problem of information gaps and financial constraints. |
| When the cost tradeoff is stated plainly, most employees want the product | The descriptions EBRI tested didn't mention price or premiums at all, so the survey can't show that stating the tradeoff changed anything. |
| The awareness gap was widest at employers with fewer than 500 workers | For supplemental health, EBRI says gaps show up even at larger employers. What's clearly worse at smaller firms is access to benefits information: 31% get it through a website, versus 48% at larger employers. |
| Plain language changes enrollment | EBRI is explicit that expressed interest doesn't guarantee enrollment. |
Here's the interest data once workers read a short, plain description of each product:
| Product (workers not already enrolled) | Very interested | Somewhat interested | Not at all interested |
|---|---|---|---|
| Accident | 28% | 43% | 29% |
| Critical illness | 31% | 45% | 24% |
| Hospital indemnity | 26% | 37% | 37% |
"Somewhat interested" is where agents earn their commission. That's a person who sees the point but hasn't connected it to their own deductible, their own savings account, or their own kid who plays travel soccer. A brochure can't make that connection. A conversation can.
Two more cautions before you repeat any of this to a client. Lincoln Financial, which sells voluntary benefits, funded the research, and two of the four authors work there. Keep that in mind. EBRI also flags that the samples of workers already enrolled in supplemental products are small. Neither point changes the direction, but both should temper how confidently you quote the numbers.
Why this lands on agents, not just HR
Employees make benefits decisions in a couple of hours, rely mostly on what their employer sends them, and spend the least of that time on supplemental coverage. EBRI found that 55% of workers primarily rely on information from their employer, and that supplemental health products got about 9% of the average worker's review time. By our math, on the report's 2.5-hour average, that's roughly 13 minutes split across accident, critical illness and hospital indemnity, and for the typical worker it's closer to six.
Six to thirteen minutes won't cover a product that pays fixed cash benefits, has its own exclusions, and works alongside a major medical plan rather than replacing it. HR teams aren't the villain here. Workers spend most of a short enrollment window on the big decisions: EBRI found about a third of review time goes to the medical plan and another sixth to retirement.
That also explains why the report keeps landing on the same fix. When EBRI asked workers what would help them choose, the answers clustered around simple explanations, side-by-side comparisons and access to a real person. Nearly nine in ten said a decision-support tool would be very or somewhat useful. The EBRI broker survey found the same thing from the other side: brokers see enrollment and communication as the main places carriers can support them better.
Two groups matter most for independent agents:
| Group | What the research says | Where the agent fits |
|---|---|---|
| Workers at employers that offer supplemental coverage but explain it poorly | Awareness lags employer offer rates, and smaller employers reach workers through fewer channels | Worksite conversations, employer education, and plain-language follow-up during the enrollment window |
| Workers whose employer doesn't offer it at all | 14% bought accident coverage on their own, 8% hospital indemnity, 7% critical illness; 32% said they wouldn't buy any of these benefits outside work | Individual sales, where the agent may be the only person who ever explains the product |
That last number stands out. A third of workers say they won't buy protection like this on their own. The report can't say how much of that is preference, but it's a group nobody has walked through the math.
What agents can do with this during enrollment season
Lead with the bill, not the brochure. EBRI's own conclusion is that workers who skip supplemental coverage over cost may not have weighed its incremental cost against the out-of-pocket exposure it offsets. So start there. Ask what the client's deductible is. Ask what they'd do with a $2,500 ER bill next month. Then show what an accident plan would pay toward it. The accident insurance explainer, the critical illness explainer and the hospital indemnity explainer are all written so you can send them to a client after the call.
Use one sentence per product before you open a benefit schedule. EBRI tested short plain-language descriptions and saw strong interest after people read them. Here's how we'd say it:
| Product | One plain sentence | Who it fits |
|---|---|---|
| Accident | "If you or your family gets hurt, it pays you set cash amounts for covered care like an ER visit, an X-ray or a cast, and you spend it however you want." | Active households, kids in sports, anyone on a high deductible |
| Critical illness | "If you're diagnosed with a covered condition like cancer, a heart attack or a stroke, it pays you a lump sum that can help with the bills and lost paychecks." | Households where a serious diagnosis would mean lost income on top of medical bills |
| Hospital indemnity | "If you're admitted to the hospital, it pays you a set amount that you can put toward your deductible, copays or anything else." | Clients on bronze or high-deductible plans with high inpatient cost-sharing |
Then go deeper with the fixed indemnity vs. hospital indemnity vs. critical illness comparison for clients who want the side-by-side. That's exactly the kind of comparison EBRI's respondents asked for.
Ask what they already have before you quote. Among workers offered supplemental coverage who didn't enroll (a small group in the survey), the most common reason was that they already had coverage elsewhere. Sometimes that's true, through a spouse's plan or a policy bought years ago. Sometimes it isn't. Finding out first keeps you from selling overlapping coverage, like a hospital indemnity plan on top of a fixed indemnity plan that already pays hospital benefits. The product stacking guide covers which combinations work together and which ones double up.
Right-size the benefit, because affordability is real. "If I could afford it" was the top answer to what would make workers enroll. Take that at face value. A smaller accident benefit the client keeps paying for beats a rich one they cancel in March. A client who understands what they bought is a client who stays.
Go where the information gap is widest. Workers at employers with fewer than 500 people reported less access to benefits information across websites, apps, email and social media. Those are often exactly the employers an independent agent can reach and a large carrier's enrollment team can't. If you're building that side of your business, our guide to building a supplemental insurance book covers the practical steps.
Time it to the calendar. Many employer enrollment windows run through the fall, and HealthCare.gov open enrollment for 2027 coverage runs November 1, 2026 through January 15, 2027 (as published on HealthCare.gov, checked October 2, 2026; state exchanges may differ). Clients choosing a higher-deductible Marketplace plan to keep premiums down are the same clients for whom a supplemental layer matters most. The 2026 ACA coverage playbook covers that side.
Put it in writing. Accident, critical illness and hospital indemnity insurance are not major medical coverage and don't satisfy the ACA's minimum essential coverage standard. Say so plainly and in writing, along with what the plan pays and what it excludes. That's best practice whatever a given state or carrier requires, and the limited-benefit insurance explainer puts it in consumer language. Then make sure the client knows who will bill them: the charge on a PHS-administered plan typically reads PHS-HEALTH-BILL (sometimes PHSHEALTH or HEALTHPHS), and our post on how to verify your benefits administrator is built to send before the first payment posts. For clients still deciding whether they need any of this, do I need supplemental insurance? is the plain-language starting point.
A closing note on the numbers
EBRI's research doesn't show that workers reject supplemental coverage. It shows they're making fast decisions with thin savings and not much information, and that when someone explains the product clearly, a majority lean in. Interest still has to survive the premium, and a simpler description won't make a tight budget looser. But the space between "I didn't know that existed" and "that's worth a small monthly premium to me" is a conversation, and that conversation is still the agent's to have.
