Accident insurance is one of the most popular benefits in the worksite market and has appeal for most groups.
The traditional school of thought has been that it appeals more to blue-collar groups because of its relative affordability and the likelihood that those particular employees engage in activities that might be more likely to lead to an accident. Of course, as anyone with children will tell you, accidents can happen to any family regardless of income or job description. As a matter of fact, our recent anecdotal experience has proven the appeal of accident coverage to everyone.
Certainly, this is partially due to specific product design. There are primarily two types of accident coverages: indemnity products with which the broker community already is very familiar and a lump sum accident expense product, which pays up to a predetermined face amount for any expenses incurred because of an accident. Both offer 24-hour coverage or off-the-job coverage.
Both obviously have their advantages. The traditional individual indemnity product is in almost every major and minor worksite company’s portfolio. They pay on a schedule for any particular injury caused by accident (e.g., $50 for a broken finger, $100 for a dislocated shoulder, etc.). Most of these products are interchangeable as one company’s products will pay more for one event and another company’s policy will pay more for another.
Premiums all tend to be in the same ballpark. Group accident plans, however, offer a lot more flexibility on price and product designs. Some even offer a sports injury rider, which is extraordinarily popular with parents.
Right now, there are some carriers with group accident plans that are saving employees premium dollars by matching current plan designs while offering a lower cost. When HR departments are less inclined to change their deduction amounts they’re increasing their benefits.
The accident expense products are a slightly different concept. They are designed mostly to help employees to cover their deductible when an accident happens. They cover the expense of the accident up to the predetermined face amount. For example, if an employee has a $5,000 plan and has $3,700 of expenses due to an accident, they get paid a check for $3,700. In most plans, they still have $13,000 left for the calendar year for other accidents.
What we’ve found is that this type of product has a lot of success separate of any major medical coverage as it pays the lump sum regardless of what one’s major medical deductible is. It’s easy to see the appeal of this plan for any type of family, but especially one with a higher deductible health insurance plan. Most accident expense plans in the worksite are following the trend of being on a group chassis, which again, gives the carrier some flexibility.
In addition, there are some accident plans that have sickness riders that can be attached which can give workers who can’t afford short term disability at least a little coverage. If you believe the philosophy that a little coverage is at least better than none this is an option. While falling far short of a traditional. Disability plan it can certainly help lower paid workers. That said it must always be properly communicated that it is not a disability plan. We have from time to time been called by a group because their broker misrepresented just such a plan.
It’s obvious there are employees of all stripes that react favorably to the right type of accident coverage. That said, we’ve found more success in certain types of groups. Recently, we’ve seen a huge increase in a percentage of our business gravitate toward accident coverage in states and municipalities, as well as association business, security guards and moderately paid employees just to name a few. Again, though almost every group is reacting favorably to one accident plan or another and participation on a voluntary basis has been extraordinarily high.
As was mentioned, almost every carrier has some sort of accident product on the market. Some have more than one. Finding the products that separate themselves from the pack can be a daunting task given their similarities but when you find it, and the carrier is willing and capable of providing excellent service, specifically with regard to claims, it can give you a competitive advantage when mixed with the right overall portfolio. Sometimes those carriers might not be who you were expecting either, so be sure to find the plan that stands out in a crowd.