Help employees financially prepare for the unexpected with hospital indemnity insurance.
When it comes to the health of employees and their families, the stress of out-of-pocket expenses related to unexpected hospital stays should not be something they need to worry about. Hospital indemnity insurance helps reduce some stress caused by hospital bills, allowing them to better focus on recovery.
What is hospital indemnity insurance?
Depending on the coverage, hospital indemnity insurance can help alleviate financial worries from a hospitalization due to a sickness or injury. A lump-sum cash benefit is paid to the insured person to help pay for added expenses that may come while recovering.
Why offer group hospital indemnity insurance?
The average overnight hospital stay runs $11,700 regardless of insurance type, so it’s not surprising that 60-65% of all bankruptcies are related to medical expenses.1 Health insurance may help to cover hospital bills in case of hospitalization due to a sickness or injury. But it may not cover all of the costs associated with a hospital stay, such as deductibles and co-pays, transportation, or lodging. Hospital indemnity insurance may help employees by protecting their financial wellness in this time of need.
How does group hospital indemnity insurance work?
It’s easy for your employees to sign up for hospital indemnity coverage. If they’re admitted to the hospital for a sickness or injury, they receive a lump-sum cash benefit to use any way they choose—regardless of other insurance they have.
What is covered?
Flexible design options allow you to tailor the hospital indemnity insurance benefits to your employees’ needs. Some examples of covered benefits include daily hospital confinement, inpatient surgery, and therapy. Customization allows you to give your employees a choice to decide what plan design meets their needs.
Who pays the insurance premium?
There are options available to design the coverage, including voluntary, employer-paid, and contributory. Employees choose who to cover and if they’re paying the premium, it will be paid through payroll deduction.
Key features of Principal® group hospital indemnity insurance.
- Flexible design, minimal paperwork, and simplified claims
- Proof of good health is not required.
- Employees can buy protection for their spouse and/or kids.
- It is portable coverage employees can take with them.
Build upon your benefits package.
Talk to your financial professional about offering group hospital indemnity insurance. And, consider combining group hospital indemnity insurance with other offerings for a more comprehensive benefits package.
For AZ residents, see Hospital Indemnity Insurance Limitations and Exclusions.
Covered conditions and related limitations, exclusions, and reductions*
• Daily Hospitalization - hospital confinement of at least 18 hours is required. Excludes care received in an emergency room, observation unit, urgent care facility, outpatient surgery, or routine newborn post-natal care.
• First day Hospital Confinement - payable only once per day. If discharged and confined again for the same or related condition within 30 days of discharge, the later confinement will be considered a continuation and no benefits will be payable.
• First day Hospital Intensive Care Unit - payable only once per day. If discharged and confined again for the same or related condition within 30 days of discharge, the later confinement will be considered a continuation and no benefits will be payable.
• Daily Hospital Intensive Care Unit - hospital confinement of at least 18 hours is required. Excludes care received in an emergency room, observation unit, urgent care facility, outpatient surgery, or routine newborn post-natal care.
• Newborn Nursery Confinement - must be for newborn child confined to a hospital receiving routine nursing or well-baby care.
• Rehabilitation Facility - must be prescribed by a physician, and immediately follow a hospital confinement.
• Skilled Nursing Facility - must be prescribed by a physician.
• Hospice Care - must be diagnosed with a terminal illness by a physician.
• Mental Disorder Inpatient Treatment Facility - lifetime maximum of 180 days.
• Substance Abuse Inpatient Treatment Facility - lifetime maximum of 180 days.
• Mental Disorder Outpatient Treatment - treatment is based on diagnosis, evaluation, and treatment of a mental disorder.
• Substance Abuse Outpatient Treatment - treatment is based on diagnosis, evaluation, and treatment of a substance abuse disorder.
• Physician Visit and Telemedicine - excluded for routine health examinations, immunizations, normal pregnancy examinations, well baby examinations, any mental disorder, or substance abuse or for any day that a hospital confinement benefit is payable.
• Lab test or X-Ray - excluded during a routine physical, annual wellness examination, or for preoperative testing.
• Major Diagnostic Procedure - excluded during a routine physical, annual wellness examination, preoperative testing, or during a hospital confinement.
• Invasive Diagnostic Procedure - excluded during a routine physical, annual wellness examination, preoperative testing, or during a hospital confinement.
• Prescription Drug - Must be prescribed on an outpatient basis by a physician and dispensed by a licensed pharmacist, payable only once per day.
• Durable Medical Equipment - must be prescribed by a physician, and equipment must be rented or purchased.
• Home Health Services - must be prescribed by a physician, excluded for days that a hospital confinement is payable.
• Therapy Services - payable only once per day. If emergency room, urgent care facility, physician office visit, therapy services, or observation unit are payable for the same day, only the highest benefit will be payable.
• Chiropractic Care - must be prescribed from a physician. Massage therapy, treatment of chronic conditions, or injuries not related to a structural imbalance will not be covered.
• Air ambulance - must be a licensed professional ambulance company.
• Ground or water ambulance - must be a licensed professional ambulance company.
• Emergency Room - the exam or treatment must be within 96 hours of the sickness or injury. If emergency room, urgent care facility, physician office visit, therapy services, or observation unit are payable for the same day, only the highest benefit will be payable.
• Observation Unit - the exam or treatment must be within 96 hours of the sickness or injury. If emergency room, urgent care facility, physician office visit, therapy services, or observation unit are payable for the same day, only the highest benefit will be payable.
• Inpatient surgery - payable only once per day.
• Outpatient surgery - if more than one surgical procedure occurs on the same day, only the highest surgical benefit will be payable up to once per day.
• General Anesthesia - excluded if a surgical procedure is not payable.
• Medical travel - treatment must be prescribed by a physician and is measured as the most direct route from primary residence to the facility of hospitalization or treatment.
• Companion lodging - excluded if a hospital confinement is not payable. An adult companion must incur a lodging expense due to hospital confinement of the covered person.
• Doula Care - services must begin during pregnancy or within 90 days from delivery.
• Family Care - excluded if a hospital confinement is not payable, the family care facility must not be owned or operated by a covered person or their immediate family.
• Pet Care - excluded if a hospital confinement is not payable, the pet care facility must not be owned or operated by a covered person or their immediate family.
Benefits may be payable if the sickness or injury occur while insured for the Hospital Indemnity policy. A policy of sickness only, or injury only may also be selected.
If eligible for multiple confinement benefits on the same day, the highest confinement benefit will be payable.
A spouse and Dependent Children may be covered for up to 100% of the employee benefit amount.
General limitations and exclusions
The proposed policy contains restrictions and limitations. Before making a purchase decision, review the following limitations and resolve any questions. The following limitations and restrictions are applied as required by state law or as otherwise described in the group policy.
Benefits will not be paid for a sickness or injury caused indirectly or directly by, contributed to, or resulting from willful self-injury or self-destruction, while sane or insane; voluntary participation in an auto-erotic activity; or war or act of war; or voluntary participation in an assault, felony, criminal activity, insurrection, or riot; or duty as a member of a military organization; or sickness or injury diagnosed outside of the United States unless the diagnosis can be confirmed by a licensed physician in the United States; or the use of any drug, narcotic, or hallucinogen not prescribed for the employee or covered dependent by a licensed physician, any mental disorder; voluntary intoxication (as defined by the law of the jurisdiction in which sickness or injury occurred) or while under the influence of any narcotic, drug or controlled substance, unless administered by or taken according to the instruction of a physician or medical professional; voluntary intoxication through use of poison, gas, or fumes, whether by ingestion, injection, inhalation or absorption; or the operation by the member of a motor vehicle or motor boat if, at the time of the injury, the employee or covered dependent’s alcohol concentration exceeds the legal limit allowed by the jurisdiction where the injury occurs; substance abuse; operating, learning to operate, or serving as a crew member or flight for life personnel of any aircraft or hot air balloon [except as a crew member in a policyholder owned or leased aircraft on company business]; jumping, parachuting, or falling from any aircraft or hot air balloon, including those which are not motor-driven, parasailing, bungee jumping or other aeronautic activities; or riding in or driving any motor driven vehicle in a race, stunt show or speed test; any injury to a covered person’s tooth that occurs from biting or chewing; or practicing for or participating in any semi-professional or professional competitive athletic activity, including officiating or coaching, for which any type of compensation or remuneration is received; employee’s dependent spouse, sickness or injury arising from or during employment for wage or profit; or a cosmetic surgery or other elective procedures that are not medically necessary; services rendered to a newborn child following their birth, unless the newborn is sick or injured.
Unless specifically mentioned above, no benefits will be paid for mental disorder, substance abuse, or work-related sickness or injury.
No benefits will be paid for any injury or sickness incurred while residing outside the United States for more than six months; or incurred while incarcerated in any type of penal or detention facility.
The covered person must incur the diagnosis and treatment while insured for the hospital indemnity policy.
Preexisting condition limitation
A Preexisting Condition is any sickness or injury, including all related conditions and complications, or a pregnancy, for which a covered person received medical treatment, consultation, care, or services, or was prescribed or took prescription medications in the 12-month period before they became insured under the policy.
No benefits will be paid for hospital indemnity that results from a Preexisting Condition until the covered person has been insured for 12 months. After 12 months, the Member must be actively at work for one full day, or the Dependent must be insured for one full day for their treatment to be covered.
* Refer to the policy for definitions applicable to all terms used in this document, and for other applicable terms and conditions, and relevant clinical and diagnostic criteria. Proof of treatment and submission of medical records are required. Claim procedures must be satisfied. Limitations and exclusions must not apply.
HOSPITAL INDEMNITY INSURANCE PROVIDES LIMITED BENEFITS. This summary is not an insurance contract or a complete statement of its provisions. It does not modify or change the provisions of any policy or rider. If there is a discrepancy, the policy is the final arbiter of the coverage.
1. Hospital and Surgery Costs – Paying for Medical Treatment (debt.org), Oct. 12, 2021.
2. Specified disease in New York.
HOSPITAL INDEMNITY INSURANCE PROVIDES LIMITED BENEFITS. This is an overview of the benefits hospital indemnity insurance provides, but there are limitations and exclusions. For cost and coverage details, contact your Principal representative. Insurance products issued by Principal Life Insurance Company®, a member of the Principal Financial Group®, Des Moines, IA 50392. Not available in all states.
Principal®, Principal Financial Group®, and Principal and the logomark design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and service marks of Principal Financial Services, Inc., in various countries around the world.