You recently got a new job, and your employer offered you a traditional health insurance plan. While you were enrolling for it, you noticed that they were also offering several other types of plans.
One of them was called fixed indemnity insurance (aka fixed benefit health insurance or hospital and doctor insurance).1 You saw the words “health insurance” in the plan name, so you figured it had something to do with your traditional plan, but since you didn’t really know for sure you went with what you knew.
Here are the key differences between fixed benefit health insurance (fixed indemnity) and traditional health insurance — so you’ll be ready to determine what you want next year.
1. Fixed benefit health insurance is supplemental insurance.
Let’s start with the basics. A traditional health insurance plan is one that you can buy through a private insurance company or the Affordable Care Act (ACA) Health Insurance Marketplace. You pay a monthly insurance bill (premium) to be able to receive the plan’s benefits.
ACA plans offer essential benefits for preventive and mental healthcare, prescription drugs and hospital stays. You also won’t be denied coverage if you have a preexisting condition.
Fixed benefit health insurance, on the other hand, is not a type of traditional health plan. Instead, it's supplemental insurance. That means there is a monthly premium for supplemental insurance that is not included in what you’d pay for your primary health insurance. It’s meant to add to (or “supplement”) your coverage, not replace your traditional health plan.
Curious about fixed benefit health insurance? Enter your ZIP code to browse available fixed indemnity insurance plans.
2. Fixed benefit health insurance doesn’t follow the same rules as ACA plans.
Whereas an ACA plan provides you with coverage for essential benefits and certain protections, fixed benefit health insurance doesn’t do the same. In fact, you could be subject to medical underwriting if you were interested in applying for a fixed benefit health insurance plan. That means the insurance company could review your medical history, and you could be denied coverage if you have a preexisting condition.
3. Fixed benefit health insurance provides a preset benefit.
Your main health insurance plan may help cover things like hospital bills, doctor visits, surgeries and prescriptions. It reimburses you or directly pays for medical expenses.
You’ll have to meet a deductible (what you pay before the insurance company starts to pay for covered services), and you may have out-of-pocket costs. You might also have to pay copays (fixed fees for health services) before a doctor’s visit or when you pick up a new prescription. Additionally, you might have an out-of-pocket maximum. That’s a limit on the amount you’ll have to pay for covered health expenses in a year.
Fixed benefit health insurance works a lot differently. Remember: It is coverage that’s in addition to your health insurance plan. You don’t have a deductible to meet or have any copays to pay. You or your provider will file claims for qualified medical services.
After your claim is filed, the plan provides you (or your provider) with a preset or “fixed” benefit for things like a visit to your doctor (for a limited number of visits). The preset benefit would be in addition to what your traditional health plan pays. Preset benefits can also be provided for things like:
- Ambulance services
- Certain health screenings and tests
- Emergency room visits
- Hospital stays
- Prescription drugs
- Surgeries
Even if your medical bill is less than the benefit, you’ll still receive the full amount. So any leftover benefits can be used to pay for personal expenses, whichever way you choose.
That said, fixed benefit health insurance has limited benefits, meaning that it’ll only provide a certain amount of benefits per covered service in a calendar year or lifetime max.
Another type of fixed indemnity insurance is designed specifically to help with costs related to hospital stays. Learn more about hospital insurance plans now.
4. Fixed benefit health insurance doesn’t have network restrictions.
While your main health insurance plan might require you to see certain providers in its network, fixed benefit health insurance doesn’t restrict where you can get care. You’ll get that preset benefit regardless of which doctor or facility you use. But it’s important to know that using your main health insurance plan’s in-network providers can help you save money.
5. Fixed benefit health insurance can be purchased at any time.
Whether you get a traditional health insurance plan through your employer or a private insurance company, you will only be able to enroll at certain times during the year. If you have employer-based health insurance, your company will typically have an enrollment period near the end of the year. But that can vary from employer to employer.
The same is true of ACA plans: Except in certain cases, you may only sign up for a new plan or change your current one during the annual Open Enrollment Period or OEP. That typically runs from November 1 to January 15. (One exception: If you have a qualifying life event, for example, like getting married or having a baby, it’ll trigger a 60-day enrollment window called a Special Enrollment Period, or SEP, when you can sign up for or change your insurance.)
When it comes to fixed benefit health insurance, there is no OEP or a need for an SEP. You can apply for a plan whenever you want to, as long as you are eligible for the supplemental coverage. Remember: Because fixed benefit health insurance doesn’t follow the same rules as ACA plans, you may be denied coverage if you have a preexisting condition.
6. Fixed benefit health insurance plans might cost less than you think.
Fixed benefit health insurance generally has a lower monthly premium than your insurance plan because it offers limited coverage. That’s different from traditional health insurance premiums, which may be higher but provide more comprehensive coverage, like preventive care.
It’s important to understand, though, that a fixed benefit health insurance plan isn’t a replacement for your main health insurance plan. For example, if you needed surgery for a specific health issue and didn’t have a traditional plan, your out-of-pocket costs could skyrocket quickly. And if that type of surgery weren’t a qualified type on your fixed benefit health insurance plan, you wouldn’t get a preset benefit to help pay for it. You’d likely have to pay for it completely out of pocket.
Ready to add a fixed benefit health insurance to your traditional health insurance plan? Browse available plans online or call a licensed insurance agent at 1-844-211-7730 for more information.
For informational purposes only. This information is compiled by UnitedHealthcare, and/or one of its affiliates, and does not diagnose problems or recommend specific treatment. Services and medical technologies referenced herein may not be covered under your plan. Please consult directly with your primary care physician if you need medical advice.
1THIS PRODUCT PROVIDES LIMITED BENEFITS. FIXED INDEMNITY INSURANCE IS A SUPPLEMENT TO HEALTH INSURANCE AND IS NOT A SUBSTITUTE FOR THE MINIMUM ESSENTIAL COVERAGE REQUIRED BY THE AFFORDABLE CARE ACT (ACA). Lack of major medical coverage (or other minimum essential coverage) may result in an additional payment with your taxes. This fixed indemnity insurance product provides benefits in a stated amount regardless of the actual expenses incurred.
Part Number: 52385-X-0725
