Coverage gaps are a constant in today’s world of health insurance. It’s common for companies to try to fill coverage gaps with supplemental ‘gap plans,’ also known as indemnity-based voluntary insurance, like hospital indemnity and critical illness insurance. Unfortunately, this type of gap-filler isn’t always effective due to several shortcomings.
There is another type of lesser-known supplemental health insurance that can fill gaps called expense reimbursed insurance. This type of supplemental insurance has some advantages that makes it better for filling coverage gaps than your typical ‘gap plan.’
One: Less Limiting & More Powerful
Indemnity-based voluntary insurance provides limited coverage based on a pre-defined scope. If a health expense does not fit within that narrow scope, no coverage is provided. For example, a routine prescription expense would not be covered by a critical illness plan, or a heart attack would not be covered by a cancer insurance policy. For this reason, voluntary insurance can still leave significant holes in coverage.
Conversely, expense reimbursed insurance isn’t tied to the same types of condition limitations. This type of supplemental plan provides coverage for both routine expenses and beyond, casting a broader net of where coverage will be offered and leaving far fewer holes. So no matter if your coverage gap results from a routine Rx, a heart attack, cancer or anything in between, expense reimbursed insurance has the power to provide coverage up to the specified plan levels.
Unlike indemnity-based voluntary which typically offers a lump sum payment for coverage, expense reimbursed insurance offers a broad range of annual coverage options. ArmadaCare’s suite of expense reimbursed insured products provide from $5,000 to $100,000 in annual coverage. In addition to adding more power and value than voluntary, this also makes it possible to find the right plan for each company’s coverage needs and budget.
Three: Carve-Out Control
On top of these two great advantages, expense reimbursed insurance also has the distinction of being an excepted benefit. That means that ACA nondiscrimination rules don’t apply, so plans can be offered to select employee classes as determined by the employer. This allows companies to fill coverage gaps more strategically based on need, offering varying levels of coverage throughout the company.
These carve-out capabilities also make expense reimbursed insurance a recruitment and retention tool. Because plans can be offered selectively, it’s possible to boost coverage for at-risk employee positions as an incentive.
Ready to fill coverage gaps more effectively than ever before with carve-out coverage? Check out this recorded webinar to learn more.