What Is Supplemental Group Health Insurance?

Supplemental group health insurance is a plan that pays benefits to policy holders if they suffer a covered illness or injury. These plans provide extra coverage as it compliments a person's major health policy.

Defined Benefit Plan

Supplemental health insurance is commonly referred to as a defined benefit plan because the exact benefit amount for specific covered events is detailed in the plan. For example, policy holders will know they will receive X amount of dollars each day they spend in the hospital.

Benefits

Benefit payments are paid directly to the policy holder, who can use the money for nonmedical purposes. These payments are in addition to any benefits received from the primary insurance plan.

Considerations

Because supplemental health insurance is extended through a group plan, all eligible applicants must be accepted regardless of medical status.

Misconceptions

Supplemental plans can be purchased to cover out-of-pocket expenses such as copays, deductibles and coinsurance that are present in primary health plans.

Warning

Supplemental group health insurance has lower coverage amounts than major medical policies. Therefore, the policy holder will be left unprotected if the insured were to suffer a catastrophic illness or injury.

References

• MedSave: Supplemental Health Insurance
• Insurance Care Direct: Supplemental Health Insurance Plans

Resources

• Basic Health Insurance: Supplement Health Insurance