Hospital Indemnity Insurance for Your Employees
A hospital stay can be a financial shock for an employee even with health insurance. Hospital indemnity pays a fixed cash benefit they can use however they need, and many businesses offer it in a way employees pay for themselves through payroll.
What it is
Hospital indemnity insurance pays a set cash amount when a covered person is admitted to the hospital, and often for each day they stay. The money goes to the employee, who can use it for deductibles, bills, rent, or travel.
It works alongside health insurance, not instead of it. It is not major medical coverage.
Ways to offer it
Employer-paid: the business pays the premium as part of its benefits package.
Voluntary (employee-paid): the business makes the plan available and employees choose to enroll and pay through payroll deduction. This lets a small business offer a real benefit with little or no premium cost of its own.
Shared: the business pays part and the employee pays the rest.
Who it's for
Small businesses that want to offer something meaningful without the cost of a large package, businesses that already offer health insurance and want to fill the gap a hospital stay leaves, and teams of almost any size: from a few employees to many. Most group and voluntary plans have a minimum number of enrolled employees, and it varies by carrier and state.
Talk to a licensed agent: 954-306-1645Questions employers ask
Is hospital indemnity worth it for a small business?
It is often one of the simplest benefits to add, and a voluntary plan can cost the business little or nothing in premiums. Whether it fits depends on your team, your budget and what you already offer.
Do employees need health insurance to get hospital indemnity?
It depends on the plan and carrier. Hospital indemnity is designed to work alongside health insurance, and it does not replace it.
Can a business with only a few employees offer it?
Most group and voluntary plans have a minimum number of enrolled employees, and it varies by carrier and state. A licensed agent can check what is available for your size.
Is it taxable?
How premiums are paid (before or after tax) changes how premiums and benefits are taxed, so confirm the setup with your tax advisor.
For employers
- Group hospital indemnity, explained
- How to offer benefits as a small business
- Voluntary benefits: are they worth it?
- Supplemental insurance for employees
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Benefits Council is a licensed insurance agency. Hospital indemnity insurance pays fixed cash benefits for covered hospital stays; it is not major medical health insurance and does not replace it. Products, eligibility, participation requirements and benefits vary by carrier and state, and are subject to underwriting. Not connected with or endorsed by the U.S. government or the federal Medicare program. We do not offer every plan available in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options.