Overview

Accident & Health insurance protects policyholders from the financial impact and consequences of unexpected medical bills by providing benefits to the insured for the treatment of illness, injury or disability. Policies may be issued to employees or employers, individuals or to members of an association.

Accident & Health insurance varies significantly by coverage. Basic medical coverage usually includes coverage for hospital stays (a portion of room and board), and surgical and medical costs associated with treatment. Basic coverage usually pays a fixed amount to providers based on a "usual, reasonable and customary" standard.

In addition to the basic benefits, major medical coverage may be issued under a managed care system or under a traditional system. In managed care, the services are generally provided by in-network providers with the managed care network controlling health care services and costs. Some managed care arrangements include: Health Maintenance Organizations (HMOs), Exclusive Provider Organizations (EPOs), Preferred Provider Organizations (PPOs), and Point-of-Service Plans.

Under traditional coverage, the policy normally pays a percentage of covered expenses (normally 80%), after the deductible is paid. There is also a maximum out-of-pocket limit the policyholder will pay when services are rendered.

There are other types of policies that provide limited benefits, such as basic hospital expense, basic surgical expense, specified diseases and hospital indemnity plans.