What are '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.

BREAKING DOWN 'Accident And Health Benefits'

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.

Accident Insurance vs. Workers' Compensation

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.

RELATED TERMS
  1. Accidental Death Benefit

    The accidental death benefit is payment due to the beneficiary ...
  2. Voluntary Accidental Death And ...

    Voluntary accidental death and dismemberment insurance is a policy ...
  3. Employer's Liability Insurance

    Employer's liability insurance protects employers from financial ...
  4. Auto Insurance

    Auto insurance is purchased by vehicle owners to mitigate costs ...
  5. Essential Health Benefits

    Essential health benefits must be included in certain health ...
  6. Workers' Compensation

    Workers' compensation is a publicly-sponsored system that pays ...
Related Articles
  1. Insurance

    4 Types Of Insurance Everyone Needs

    Here are four forms of insurance that are vital to have.
  2. Insurance

    Car Insurance Add-Ons That May Be Worth The Money

    Many auto insurance add-ons are unnecessary in most situations and will simply drain money out of your pocket. There are several that are worth adding on to make sure that you are adequately ...
  3. Insurance

    4 Tips for Negotiating an Insurance Settlement

    It is possible to negotiate your own insurance settlement, especially when the injuries are relatively minor and the other party’s fault is obvious.
  4. Financial Advisor

    How Do Workers' Compensation Benefits Work?

    What you need to know about Workers' Compensation benefits.
  5. Insurance

    5 Alternatives to Traditional Health Insurance

    Discover five of the most popular alternatives to traditional health insurance plans, alternatives that are increasingly popular as health insurance costs rise.
  6. Taxes

    Insurance-based Tax Deductions You May Be Missing

    Do you know about all these insurance-related deductions? Knowing the tax deductions you're entitled to can make or break your bank account.
  7. Insurance

    What You Need To Know About Student Health Insurance

    Before heading off to college, read up on health insurance plans.
  8. Insurance

    Why Employer Healthcare Costs Are Rising for Employees

    It's no illusion that health insurance is getting more expensive, and employer healthcare costs that are passed on to employees are about to go up again.
  9. Insurance

    How to Find the Right Car Insurance

    Finding the right car insurance can be difficult. However with these strategies, you can get the most for your money, protect your assets and your health.
  10. Insurance

    Buying Private Health Insurance

    Getting your own policy isn't easy or cheap but in some cases, it's well worth the effort.
RELATED FAQS
  1. Can your insurance company drop you after an accident?

    Learn how auto accidents can lead to insurance premium increases or policy cancellations, and why high-risk drivers are more ... Read Answer >>
  2. How does the insurance sector work?

    Learn more about the insurance sector, a historically safe place for equity investors and the home of some of the largest ... Read Answer >>
Trading Center