By Mike Zarrillo, Chief Revenue Officer, Brella Insurance | May 12, 2021
When selecting health insurance benefits for your team, a hospital indemnity plan can seem like an attractive option at first glance. However, hospital indemnity plans pay limited benefits in limited circumstances, which can diminish their value. Here are a few things to think about before offering a hospital indemnity plan to your employees, either on an employer-sponsored or on a voluntary basis.
So, What Is a Hospital Indemnity Plan?
Hospital indemnity plans were designed years ago to pay benefits if someone is hospitalized. Employers often offer this type of plan because it promises cash payments that can potentially ease an employee’s financial burden if they are hospitalized and incur out-of-pocket expenses.
The Limitations of Hospital Indemnity Plans
The first issue with hospital indemnity plans is that they only pay benefits if the employee is hospitalized. Data from the Centers for Disease Control and Prevention found that only 12% of emergency room visits resulted in hospital admission. More efficient modern healthcare and outpatient procedures mean that employees could see less of an opportunity to use a hospital indemnity plan than they might have in years past.
Another problem with hospital indemnity plans for your employees is their limited coverage. What does a hospital indemnity plan cover, really? It often only covers very specific healthcare services and has limits on the number of hospital stay days it will cover.
Lastly, a hospital indemnity plan is far from an adequate way to shield employees from the sudden financial shock of an unexpected health issue. Until now, an employer would have to combine a hospital indemnity plan with other forms of supplemental health insurance plans just for employees to receive enough benefits to offset what they owe toward their deductible, copays, and coinsurance. However, even with all those supplemental plans, there are still gaps. Accident plans, cancer plans, critical illness plans, and hospital indemnity plans wouldn’t pay any benefits if an employee had a noncritical illness that landed them in the ER but didn’t get them admitted to the hospital. That’s a staggering limitation.
How can you help employees who are worried about unexpected medical bills?
A Truly Supplemental Alternative
Brella’s supplemental health insurance plan is a great way to offer coverage for employees who worry about paying the cost-sharing associated with their health insurance. Our plan has clear, unambiguous terms and actually covers a wide range of illnesses and injuries — without making your team jump through hoops to use it. Hospital stays are hard enough without worrying about how to pay for them.
We built Brella to offer simple, wide-ranging supplemental health insurance for all types of conditions that generate sudden, unexpected medical bills. We cover more than 13,000 injuries and illnesses, from concussions and dehydration to heart attacks and cancer. Plus, unlike hospital indemnity plans, we don’t have hospitalization requirements. Where care was provided or what the treatment was doesn’t matter. All we need to know is the ICD-10 diagnosis code to pay out a benefit. Our claims process is really that simple.
We offer three benefit categories with customizable payout levels, meaning your team can select the plan that provides the exact level of support it needs. Because we don’t require mountains of paperwork to verify treatment, members can file a claim online in minutes as soon as they’re diagnosed. Once approved, we pay claims within hours — not weeks. Members can receive their Brella benefit payouts before they’re even billed by their medical providers. This offers a major sense of relief to employees when they need to seek medical care.
Plus, Brella is affordable for employees who are concerned about their high-deductible health insurance plans or who opt out of coverage altogether due to costs. Brella can be paid for by you or the employee. What’s more, we can help protect their HSA dollars because we provide a cash infusion when health issues arise. You can opt to redirect HSA dollars to Brella to amplify the impact of those dollars for employees if they’re sick or injured with a condition we cover. It truly is the best way to enhance your major medical insurance.
With Brella, employers benefit from having one supplemental plan to manage (with paperless administration) instead of a string of plans that doesn’t offer the same coverage. And if any issues or questions come up along the way, Brella offers dedicated concierge support for both you and your employees.
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