How Does Supplemental Health Insurance Work?

Posted By: Team Moody,

Healthy and happy employees are essential for a successful and productive business. As an employer, it is your responsibility to invest in a health insurance plan that ensures your workers’ continued health and well-being. However, the rising cost of health insurance has made this task much more challenging.

Fortunately, there are many more choices available now to help manage these high healthcare costs. Among the most useful of these are supplemental health insurance plans. But to make the most of these plans, you’ll need a company that understands the demands of your industry. Moody Insurance Worldwide knows how to customize a policy that will work specifically for you.

But what exactly is supplemental health insurance, and how does it work? Let’s find out!

What is supplemental health insurance?

When healthcare expenses exceed standard health insurance coverage limits, the burden falls on your employee to make up for it. Such fees can be expensive, so it’s essential to have a safety net in place that will protect both you and your workers.

Supplemental health plans provide that safety net. They cover the medical fees that exceed your healthcare plan’s coverage and, in some cases, also coinsurance, copays, and deductibles that aren’t included in the policy.

How does supplemental health insurance work?

Supplemental health plans may pay benefits to the policyholder or the healthcare provider. However, the amount paid and how it is distributed will depend on the plan’s specifics, which can vary considerably.

Here are some examples of the most common supplemental health insurance plans for businesses and how they work:

Hospital indemnity insurance

Hospital indemnity insurance compensates policyholders for hospitalization costs if the hospital bill goes beyond their policy’s limits. The insurer will pay out a daily, weekly, or monthly cash benefit depending on the terms. However, note that the policyholder may be required to stay in the hospital for a minimum number of days before receiving the cash benefit.

Critical illness insurance

In case of serious illnesses that require regular treatment for an extended period, most health insurance policies will pay out only up to the policy’s limits. Unfortunately, the policyholder will be responsible for the rest of the expenses, depending on what the plan doesn’t cover.

Critical illness insurance provides financial protection by covering the remaining balance on the hospital bill. For example, it reimburses individuals who have suffered from critical illnesses such as stroke and cancer with a lump-sum payment. With this type of insurance, those diagnosed with these conditions won’t be burdened by costly medical bills.

Accident insurance

Accidents can happen at any time, and a standard insurance policy may not fully cover treatment costs. In such cases, accident insurance might be a feasible alternative, providing reimbursement for medical expenses via a one-time lump-sum payment.

Anyone can apply for accident insurance if they wish. However, these plans are best suited for athletes and adults with active recreational lifestyles, such as climbers and cyclists.

Accidental death and dismemberment insurance

Accidental death & dismemberment insurance ensures that the policyholder’s family is financially protected in case of an accident or injury resulting in death or disability. This plan covers accidents that occur through no fault of the policyholder, particularly if it results in amputation, loss of sight, or brain damage.

Do I need supplemental health insurance?

Now that you have an idea of how supplemental health insurance works, you may be wondering if your business needs it. Before you decide, the first thing you need to do is to consider the risk factors associated with your industry.

If your business deals with hazardous substances or has a high accident rate, supplemental health insurance could protect everyone from unexpected costs.

Another factor that will help determine whether you need supplemental health insurance is your company’s finances. If your business is struggling financially, there may be insufficient funds for the treatment of workers that fall ill or become injured. They would then have to cover medical expenditures with their own money.

These expenses can put a person under a great deal of stress and cause their performance to suffer. With supplemental health insurance, you can protect them from these issues and help ensure their continued productivity.

Lastly, it is important to look at your employees’ health needs. Some individuals may require constant medical attention, while others may have chronic illnesses that are more costly than usual. If any of your employees are in this situation, getting supplemental health insurance is essential.

Knowing what supplemental health insurance is and how it works will help you determine if it’s right for your company. You could then make better-informed choices on how to protect yourself and your employees financially. With the right supplemental health insurance plan, you will be better able to ensure your financial security and focus on making your business the best it can be.

About Moody Insurance Worldwide

Moody Insurance Worldwide, a division of Moody & Associates that was founded in 1914, is a leading provider of risk management programs and insurance coverage to individuals and businesses across the East Coast. We write all sizes of businesses, with technical expertise in many key industry areas, and provide personal insurance programs for estates and high net worth individuals. Our licensed, experienced commercial account managers can work with you to determine the coverage that you need at a competitive rate. Contact us today at (855) 868-0170 to learn more about what we can do for you.