I am old enough to remember the days when the only employee benefit on the table was a major medical health insurance plan. I was fortunate in that one of my earliest employers offered not only major medical, but also a dental and vision plan and a life insurance policy. Today though, employee benefits look a lot different. Much of the difference is seen in voluntary benefits like hospital indemnity insurance.
BenefitMall, a Dallas general agency, says hospital indemnity insurance is just one of an extensive list of voluntary benefits employees are now taking a look at. Everything from identity theft protection to critical illness coverage and even pet insurance is on the table. Employees are not afraid to ask for voluntary benefits that were never considered before. Employers are willing to find a way to make them available.
What Hospital Indemnity Insurance Covers
Some of the voluntary benefits design to work hand-in-hand with health insurance can be confusing to consumers. Hospital indemnity insurance is a good example. Far too many consumers believe their health insurance plans will cover all the costs associated with hospital care. But this is not reality.
Nearly all private health insurance plans put a cap on the amount they will pay for hospital care. Subscribers are expected to pay their deductibles right off the top. But then, any additional costs over and above a policy’s cap also become the subscribers’ responsibility.
Exceeding a health plan’s cap is actually not uncommon for hospital stays that exceed more than a few days. Just the cost of occupying a hospital bed is higher than most people realize. But then you need to throw in the actual medical care provided. In all adds up.
The point here is that hospital indemnity insurance is designed to cover those expenses. It offers a cash payment to cover a subscriber’s out-of-pocket expenses. The payment is made directly to the subscriber. Insurance companies do not pay hospitals, doctors, etc.
A Voluntary Benefit
BenefitMall also explains that hospital indemnity insurance is a voluntary benefit separate from anemployer’s normal health plan. As a voluntary benefit, an employer may or may not choose to help cover it. Some employers contribute in the same way they contribute to standard health insurance. Others put the entire cost of hospital indemnity insurance on the employee. Still others pick up the tab themselves.
As a broker or consumer, you might be wondering why employees would pay for hospital indemnity insurance above and beyond their health plans. The answer is clearly displayed in any bill an employee might receive from a hospital. A bill of tens of thousands of dollars is instantly unaffordable.
The primary advantage of accessing hospital indemnity insurance as an employee benefit is cost. If an employee were to obtain the insurance by themself, they would pay standard retail price. Yet hospital indemnity insurance offered through employers is cheaper. Employers get a better deal because they provide insurance carriers with volume, in terms of subscriber numbers.
It is a New Voluntary Benefits World
If nothing else, hospital indemnity insurance is proof that it is a new voluntary benefits world out there. The voluntary benefits offered 20 years ago are still around for the most part. But newer voluntary benefits design to meet modern needs are also emerging. It’s not just hospital indemnity insurance. It is ID theft protection, financial wellness benefits, and on and on.
Hospital indemnity insurance is just one of many options now available to insurance brokers, employers, and employees. And as things continue to evolve in the workplace, we can expect newer offerings in the future.