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  • Writer's pictureMike Riska

Protect Returning Workers and Essential Employees with Guaranteed Issue Hospital Indemnity Plans

Covid-19 has changed the equation for the types of health events employee benefits have to protect against. As businesses across the country grapple with how to provide a safe work environment for essential workers, and others look at how to safely admit employees back to the workplace, voluntary benefits like hospital indemnity plans provide needed flexibility and focused protection.

Hospital indemnity plans have been a workhorse in the era of high deductible health plans. They provide an inexpensive hedge against the big risk of the high deductible plan -- the possibility that you'll have an accident or illness severe enough that you have to pay out-of-pocket for the whole deductible all at once. Hospital indemnity plans can ease the financial burden by paying cash benefits directly to the policyholder, to be used as needed.

A Solution For Our Times

For workers still in, or coming back to, their physical workplace, the concern that a hospitalization could be triggered by Covid-19 is very real. This year we have talked with many benefits brokers and employers asking about voluntary plans that specifically address Covid-related health scenarios. Employers are concerned about their employees' welfare and also about liability to the business. The benefit brokers we partner with are looking for solutions. So we're talking a lot about hospital indemnity.

As always, the specific features of these plans depend on which carrier you use. Some plan benefits that can be part of hospital indemnity plans are:

  • Initial hospitalization benefit. A lump sum paid upon hospitalization for illness or injury. The most bare-bones plans pay only this.

  • Daily hospitalization benefit. A sum paid for each day of hospitalization, subject to an annual maximum.

  • Hospital intensive care benefit. A sum paid for each day in an ICU.

  • Observation/Stepdown/Rehab Unit benefits. Benefits for transitional services from hospital or ICU.

  • Emergency services benefit. A sum paid for seeking emergency services for illness or injury.

  • Surgical procedures benefit. Can include benefits for both inpatient and outpatient procedures.

  • Lab/screening/doctors visit benefit. Some plans have a variety of benefits for both diagnostic and follow up services.

Make Sure Everyone Can Get It

A key feature, and one that is especially important right now, is that the plan should be guaranteed issue. If the specific concern is providing protection during Covid, you don't want to separate employees into "haves and have-nots" by introducing a plan that can disqualify applicants for past health problems. In fact, these are the employees most at risk for hospitalization from Covid-19.

A lot of these plans do not come guaranteed issue out of the box. Which is why, if you're a group benefits broker, business owner or HR professional you'll want to partner with a firm that's used to negotiating with voluntary benefits carriers. We have block underwriting offers from several carriers that let us make guaranteed issue hospital indemnity available to all of our clients. For the carriers that don't allow block offers, we negotiate case by case for you.

If you're a group benefits broker, business owner or HR professional you'll want to partner with a firm that's used to negotiating with voluntary benefits carriers

It's an uncertain time for the American workforce, especially those who remain in, or are going back to, the physical workplace. As a first step employers should focus on physical safety measures, like providing the right equipment, supplies and services to keep everyone healthy in the first place. But an important second step is providing options for employees in circumstances where they do get sick. This is one way to use employee benefits to do that.

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