Coverage that benefits your employees during a pandemic 

Key Takeaways:

  • Voluntary Benefits Programs can help cover COVID-related hospitalization expenses
  • Critical Illness Insurance with infectious disease coverage can defray hospital/medical expenses related to COVID-19
  • Hospital Indemnity provides a lump sum for hospital admittance and per diem payments
  • Employees may receive payouts from both plans if their case fits the criteria

In the wake of COVID-19, employers are looking to add protection in case of a critical illness that requires hospitalization. One solution may be making changes to Voluntary Benefits Programs for help in covering COVID hospitalizations. 

We explain the details of Voluntary Benefits Programs, what the policies cover, and how they can cover the cost of critical illnesses like COVID-19. 

What are voluntary benefits programs?

Voluntary benefits supplement the core medical coverage provided by employer-sponsored health insurance programs. Premiums are paid via payroll deduction. The three major voluntary benefits are Critical Illness, Hospital Indemnity, and Accident insurance.

Critical illness care

Critical Illness Insurance provides additional coverage for serious (and costly) medical emergencies, such as heart attack, strokes, and cancer. Other diseases or conditions may be covered, including:

  • Multiple sclerosis
  • End-stage renal failure
  • Parkinson’s Disease
  • Alzheimer’s Disease
  • Deafness/Blindness
  • Benign brain tumors
  • Infectious diseases

Hospital indemnity

Hospital Indemnity is a type of insurance plan that offers additional hospital coverage on top of your regular health insurance. You receive a fixed amount paid directly to you to help cover expenses, including your deductible, coinsurance, transportation, medications, home health care, and even things like mortgage /rent payments or car insurance premiums.

Accident coverage

Accident Coverage provides supplemental coverage for accidents that occur. Benefit amounts depend on the type of injury and the treatment received. Covered accidents may include:

  • Broken bones
  • Burns
  • Concussions
  • Dislocations
  • Emergency dental care
  • Eye injuries
  • Hospitalization
  • Lacerations
  • Medical equipment
  • Physical therapy
  • Surgery
  • Transportation

Benefits can be used for out-of-pocket expenses, such as deductibles, coinsurance, childcare, transportation, and other daily costs. 

Does Critical Illness and Hospital Indemnity cover COVID-19 treatment?

As an employer, human resource professional, or employee, you need to determine if your insurance carrier covers infectious diseases, including COVID-19. If you are hospitalized by COVID, you’ll be covered by your hospital indemnity policy because it is triggered by a hospitalization vs. any specific disease or event. But under a Critical Illness policy, many carriers have built COVID hospitalization into their critical illness policies, with some parameters built around the claim trigger. One example is that a patient would have to be hospitalized by COVID-19 for a specific number of days. 

Employers are reviewing their policies because it’s necessary to protect their workers. Now entering the third year of the pandemic, the general consensus was that the pandemic would be over within a few months, but obviously, that initial thinking was wrong. 

How does voluntary benefits coverage work?

Hospital Indemnity offers blanket coverage. If you’re admitted to the hospital, and you have to stay overnight, you’ll receive a lump sum, as long as your plan covers infectious diseases. Then depending on the plan, each additional day receives a “per diem” that typically ranges from $100 to $300 per day.

As mentioned earlier, Critical Illness Insurance covers a list of catastrophic illnesses, from cancer, heart attacks, and strokes to MS and Alzheimer’s care. These types of policies offer different payout schedules depending on the disease. A broad infectious disease rider can greatly help to reduce the stress of a serious COVID infection that results in hospitalization.  

Could both plans cover a COVID hospital stay?

If you have Critical Illness Insurance and Hospital Indemnity, you could get a pay-out from both plans if you fit the coverage criteria for each. 

For example, if you end up in the hospital because of COVID complications, you’ll get an admittance payout (i.e., $1,500) and per diem payments (i.e., $300/day) from your Hospital Indemnity plan. The coverage amount you bought determines your payout amounts.

Your admittance for COVID works as a trigger event, so you receive the money to help take some of the financial stress off your shoulders. You would also receive a lump sum payout from your Critical Illness plan to help pay expenses related to your COVID treatment if the hospitalization met the minimum policy criteria. Again, the amount would be whatever coverage level you choose, usually ranging from $5,000 to $30,000 on a guaranteed issue basis for larger employers. 

How can you find out if COVID hospitalization is covered?

First, you want to talk to your carrier about what instances would a critical illness policy respond to COVID care and treatment? Human resources professionals should be prepared to field these types of questions because the scenarios continue to arrive.

Should your company offer voluntary benefits with COVID coverage?

The short answer is yes. 

Coverage for COVID is essential right now. Hospitalizations and acute care treatment for the Omicron and Delta variants are still high. Depending on the part of the country you’re in, many hospitals are at 90% capacity. And for employers like health systems, the exposures are even greater for their staff. 

Employee turnover is high in most industries. Voluntary Benefits Programs have become another important retention tool. Employers who have properly structured and communicated coverages such as Critical Illness Insurance and Hospital Indemnity show that they care. Voluntary benefits also work well in conjunction with traditional medical benefits, becoming an essential supplement to your strategy for financially protecting your employees.

How can we help you during the pandemic? 

BeneRe assists large employers with Accident, Critical Illness, and Hospital Indemnity coverage via a unique group captive program. We can ensure your policies maximize coverage for infectious diseases like COVID-19 so your employees can feel some measure of assurance as we continue to endure this pandemic. 

Reach out to set up a complimentary financial analysis and see how our products can help protect your employees and help you retain them in these uncertain times.