What Are Accident and Health Benefits?

Accident and health benefits are additional health insurance protections that provide help with medical costs and aim to fill the gaps for conditions not covered under traditional insurance plans. With annual major medical insurance deductibles ranging in the thousands of dollars, supplemental insurance can significantly protect an individual.

Key Takeaways

  • Accident and health benefits are supplemental insurance protections provided to employees to help with medical costs and to fill the gaps where traditional insurance policies do not apply.
  • Accident and health benefits are provided by the employer but paid for by the employee.
  • The benefits provided through accident and health insurance provide income to the employee or family in the event of the insured's disability or death.
  • An employee is provided with a broader range of benefits that are not covered by traditional health insurance.
  • Accidental and health benefits differ from workers' compensation as workers' compensation only provides coverage for accidents that occur on the job.

Understanding Accident and Health Benefits

Similar to accidental death and dismemberment (AD&D) policies that pay some benefits for catastrophic claims, but not much more, and used by a small percentage of employees, accident and health benefits cover unanticipated health-related events from an accident or illness. Additionally, they provide 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 and have gained 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, or any out-of-pocket expenses associated with the accident or illness.

Accident and Health Benefits vs. Workers' Compensation

Although workers’ compensation covers injuries that occur on the job, it does not cover the results of accidents outside of the workplace or outside of an employee’s working hours.

Accident and health benefits 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 that occur anywhere and anytime. This is an added layer of protection and comfort to individuals. Accident and health benefits also pay for hospital admissions, the stay in the hospital, and inpatient rehab.

Choosing Accident and Health Benefits

While employers choose the provider and the 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. If they are interested in hobbies that are considered more dangerous, such as cliff diving or glass blowing, they may be interested in purchasing additional insurance.

Conversely, if an individual lives a sedate lifestyle and has no family to be concerned about, then perhaps accident and health benefits would not be cost-effective for them, and they can forego the offer.

It is important to note that accident and health benefits do not take the place of traditional health insurance but rather are supplemental options that can be added depending on the needs of the individual. An individual will first and foremost have to choose their regular health insurance before adding on any accident and health benefits.

Benefits of Accident and Health Benefits

Both employers and employees benefit from a company offering accident and health benefits. An employee benefits because it allows them more protection against any illness and injury. It also helps manage life, such as with childcare.

For employers, offering accident and health benefits makes them a more attractive company to work for. When individuals are searching for jobs, salary is only one component. Items such as retirement plans and health benefits are extremely important. An employer that offers better benefits when compared to another company has a leg up in terms of being able to attract talented individuals.