Accident And Health Benefits

With annual major medical insurance deductibles ranging as high as $5,000 to $10,000, supplemental accident and health benefits provide help with costs and filling gaps for conditions not covered under traditional plans.

Similar to the now-defunct Accidental Death and Dismemberment (AD&D) policies that paid some benefits for catastrophic claims but not much more — and used by just 1 percent of employees — accident and health benefits cover unanticipated health-related events from an accident or illness. Additionally, it provides income to the employee or family in the event of disability or death.

Although mostly voluntary and paid by the employee, accident and health benefits give workers more ways to fund a broader range of needs is gaining in popularity even for small and medium-sized businesses. Most medical plans cover medications and hospital and doctor bills, however, childcare, co-pays and daily living expenses post-accident or illness are not.

Accident and health benefits reduce the financial burden associated with not only gaps in medical coverage but downtime on the job. In most cases, this insurance pays a lump sum to be used as the recipient sees fit. It could go toward meeting deductibles, transportation to and from doctor appointments, childcare, etc. — basically any out-of-pocket expenses.

Although workers’ compensation covers injuries that occur on the job, it does not cover the results of accidents outside the workplace or outside an employee’s work hours. Accident insurance takes care of that, covering injuries such as: fractures, dislocations, concussions, lacerations, eye injuries, torn knee cartilage, ruptured discs and second- and third-degree burns. It also pays for hospital admission, the stay in the hospital and inpatient rehab as well as additional benefits for accidental death, dismemberment and paralysis.

While employers choose the provider and benefits to offer, employees determine which of them are most beneficial for them and their families. For example, if they play tennis, they can pick the benefit that covers sports-related injuries or get insurance for some of the more common injuries that don’t come close to meeting a high deductible.

Generally, employees can exclude the benefits from gross income. There is some incentive to extend these benefits to employees because the employer is entitled to a deduction for the payments.