Group health benefits can be extremely costly. For many employers, these benefits are one of their largest yearly expenses. Having a wide range of high-quality benefits can be crucial for attracting new team members and retaining those that you already have, but it can be difficult to add to your current offerings without breaking the bank. If your company is looking to expand its health benefits while still protecting its bottom line, hospital indemnity insurance may be the solution.
- What is hospital indemnity insurance?
Hospital indemnity insurance, also called hospital insurance or hospitalization insurance, is a voluntary benefit that can be used to supplement your company’s existing medical coverage. In most cases, these plans pay a lump sum benefit directly to the insured to help cover the cost of their stay at the hospital, whether that stay is planned or unexpected. As discussed below, some plans cover additional treatments and procedures as well. Hospital indemnity plans have no deductibles and no networks to worry about. Once the insured has received the benefit, they can allocate that money however they see fit, using it to cover the deductible from another health plan, pharmacy prescriptions, or other out-of-pocket costs.
- Why offer hospital indemnity insurance?
Hospital visits don’t come cheap. According to the Healthcare Cost and Utilization Project, there were 104 hospital stays per every 1,000 Americans in 2016. Emergency rooms see even more use, with the CDC reporting about 46 ER visits per every 100 persons. With the average cost of a hospital stay around $11,700, these visits can take an immense financial toll, and the reason for hospitalization often can’t be ignored. Hospital indemnity insurance can help significantly ease the burden of a trip to the hospital, protecting your employees’ financial wellbeing as well as their physical health.
It is available at little or no cost to you. As a voluntary benefit, hospital indemnity insurance is usually paid for by the employees themselves, so adding it to your roster of benefits will not significantly impact your company’s finances. This type of insurance is also very affordable, so it won’t break the banks of your employees, either.
The plan can be customized to suit your team’s needs. Most hospital indemnity plans have a nice degree of flexibility, with optional coverage available for outpatient and inpatient surgical procedures, diagnostic procedures, intensive care, rehabilitation, emergency room treatment, childbirth, and more. HSA-compatible versions are also available, and coverage can be extended to an employee’s spouse and children if desired. With all of these options out there, employers can specially tailor their hospital indemnity insurance plan to fit their team’s preferences and demographics and ensure that it serves as a good complement to the company’s standard health benefits.
If you are interested in adding hospital indemnity insurance to your company’s offerings, talk to your benefits advisor. When comparing plans, keep in mind that most experts recommend large, upfront benefit payments rather than plans that pay a series of smaller benefits over several days.