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Group accident insurance: If your employer offers it, should you take it?

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6 mins

Chances are, you are not fully covered if you’re injured in an accident.

Health insurance has deductibles and co-pays. Workers' compensation only covers you for workplace accidents. Disability insurance replaces income, but doesn’t cover treatment costs and other expenses you may incur if you’re hurt.

In 2018, the CDC reported nearly 25 million emergency room visits due to unintentional injuries in the U.S. — north of 67,000 per day and just shy of 2,800 visits per hour.

One way to fill any gaps in your coverage is to purchase accident insurance. You may be able to obtain this coverage through your employer.

What is group accident insurance?

A number of employers are offering group accident insurance to their employees. It’s a way for companies to add to their benefits packages without increasing their costs. It’s also a way to help employees supplement their group health insurance to fill gaps that can lead to large out-of-pocket costs.

Group accident insurance is similar to personal accident insurance. Accident insurance is a supplemental insurance policy designed to provide a financial benefit to help cover the costs of being injured in an accident. Accident insurance policies pay out a benefit if you are injured in a manner listed in the policy.

The main difference between personal and group accident insurance is that group policies are available to members of a group, such as employees of a company. This typically makes it cheaper to own because the insurance company is spreading its risk over several policyholders. Also, eligible employees are usually guaranteed to receive coverage without answering health questions or having a physical exam.

How does group accident insurance work?

In the typical group accident insurance plan, employees pay the entire premium cost through payroll deduction. They choose who to cover and pay the premiums through payroll deduction.

In some plans, employees can keep their coverage if they leave their employer, known as portability.

Most group plans pay an upfront lump-sum benefit based on covered injuries received regardless of other coverages, actual expenses, or treatment received. Payment is made directly to the employee. The benefit can be used any way the employee chooses. This includes medical deductibles and copayments, transportation, food and lodging, child care, lost income from missing work, home healthcare needs, and more.

What does group accident insurance cover?

Your policy will stipulate the type of injuries that are covered. Most injuries that occur during the course of regular daily living will be covered. Common covered injuries include:

  • Dislocations
  • Fractures
  • Lacerations
  • Concussions
  • Eye injuries
  • Burns
  • Dental injuries
  • Internal injuries
  • Ruptured discs
  • Tendon, ligament, and rotator cuff injuries

Group accident insurance plans pay benefits based on the type of treatment needed or expense incurred when the insured is injured in an accident. The more expensive the treatment(s), the more the policy will payout. Benefits payouts do not depend on the employee’s income or participation in other employer insurance offerings.

Policies will typically pay a set benefit amount if the insured requires any of the following services:

  • Air or ground ambulance
  • Admission to a hospital
  • Surgical procedure
  • General anesthesia
  • Blood and plasma
  • Medication
  • X-rays
  • Hospital confinement
  • Outpatient doctor visit
  • Rehab facility

How much in benefits does group accident insurance pay?

Policies typically will pay for multiple treatments and injuries if they occurred in a single accident. Below are examples of benefits payments that carriers would pay under hypothetical scenarios:

Carrier 1

  • $75 for a wellness benefit
  • $240 for ambulance transportation
  • $150 for emergency room treatment
  • $1,440 for a fractured leg
  • $1,500 for internal injuries
  • $140 for two follow-up physician visits
  • $700 for five physical therapy sessions

Carrier 2

  • $1,250 for a broken lower leg
  • $625 for a broken wrist
  • $300 for emergency room treatment
  • $200 for an ambulance
  • $1,800 for a two-day hospital day
  • $200 for X-rays
  • $400 for follow-up visits
  • $400 for outpatient therapy visits

What other benefits do group accident insurance policies offer?

Employers can work through a number of carriers that offer group accident insurance, and they can customize their accident insurance program to include a variety of benefits.

Optional riders or added benefits provided by some group accident insurance plans include:

  • Accidental death and dismemberment coverage, which covers the unintentional death or dismemberment of the insured. This optional benefit may also cover catastrophic loss and accommodation to your home or vehicle that is needed.
  • A benefit for avoiding injuries. Policyholders can earn a benefit for not filing a claim for a set number of years.
  • A wellness benefit that provides an annual payment if the insured completes wellness procedures or screenings.
  • Mental health benefits or trauma counseling for people dealing with the mental health effects of an accident.
  • An automatic increase in benefits every year with no increase in premium.
  • Optional hospital indemnity benefits and emergency room coverage.
  • A disability rider that pays a benefit if the insured cannot work because of an injury or illness.
  • Rehabilitation therapy.
  • An increase of the benefit payment if a covered dependent child is injured while participating in an organized sport.
  • Adult companion lodging, which is provided when the insured’s companion incurs charges for lodging during a hospital or rehab facility stay.
  • Pet boarding, to cover the costs of caring for pets if an insured is in a hospital or rehab facility.

Many employees have requested that their employers provide supplemental group accident coverage since they are in hazardous jobs or participate in activities outside of work, which could lead to accidents. If your employer provides the opportunity to buy group accident insurance, it may be something to consider as the cost should be only a few dollars a month.

Jack Wolstenholm is the head of content at Breeze.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

— Published April 19, 2021
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