Dylan Murray

What’s the Accident Coverage Lowdown for Employees?

Accident coverage plans are inexpensive insurance policies that work in conjunction with your employees’ health insurance plan. Most employees don’t think about how a serious accident could affect their financial picture. For anyone living without a savings account, one accident could put them in financial peril.

Injury Away From Work

If your employee is injured at work, everyone is protected by your workers’ compensation policy. It’s a no-fault policy that kicks in when there’s a workplace-related accident. Employees receive income replacement payments for injuries sustained at work. However, if an employee breaks a leg while jogging at the park on the weekend, they could be out of work and in recovery for several months.

Policy Use

Accident coverage offers several solutions for medical expenses and lost income. Most traditional health plans have several forms of cost sharing, such as the copays for emergency room visits, doctor visits and prescription drugs — the small bills add up quickly. According to Forbes, health plan cost sharing also includes the deductible and coinsurance, as those charges can top $10,000. For most of your employees, the copays and cost-sharing charges could put a strain on finances.

An accident plan can cover these charges, but the best use of accident coverage is for income replacement. The Department of Labor noted that you’ll be required by law to hold the job for 12 weeks, but you’re not required to pay an employee a salary while they’re recovering. Once your employee’s vacation and sick time run out, they won’t have any income. Some states offer short-term disability that could go into effect during this time, but that’s not guaranteed and comes with financial and duration limitations. And even if the employee’s income is partially protected by a state-level program, the injured party could require care by a family member during recovery.

Distributions for Injuries

Some plans will only distribute money after hospitalization, while others are designed for any emergency room visit. Lump-sum, cash payments made directly to the insured are common, but other plans might act more like a health plan and pay directly to a health provider for medical expenses not covered by the traditional health plan. As the plan sponsor, spend time reviewing accident plans and communicating with your staff about their wants and needs.

Accident coverage plans generally aren’t expensive and give your employees an added level of comfort. Your employees might not even know about the benefits of an accident plan, assuming that their current suite of insurance coverage provides sufficient protection while away from work. These accident plans can help your employees return to work after an injury grateful for the comprehensive coverage you offer.

Dylan Murray has an MBA from San Diego State University and a bachelor’s degree in communication from Boston University. He is a licensed insurance agent in California, but he works as a professional researcher and writer reporting on business trends in estate law, insurance and private security. Dylan has worked as a script analyst with the Sundance Institute and the Scriptwriters Network in Los Angeles. He lives in San Diego, California, and Marseille, France.