Hospital indemnity insurance is a type of supplemental insurance that can help employees stay out of medical debt. The average overnight cost of a hospital stay is $11,700. Despite this, only 44% of Americans can afford paying a $1,000 emergency expense. Since hospital bills are expensive and most people cannot afford to pay the bill in full, many employers offer hospital indemnity.  

Here is everything employers need to know about hospital indemnity insurance 

What is hospital indemnity insurance?  

Hospital indemnity insurance is an additional insurance plan that supplements an employee’s existing health insurance. Employees pay a monthly cost, like any other insurance, and if they end up in the hospital, they receive a fixed amount to help them pay for their hospital bills.  

Unlike health insurance, hospital indemnity insurance is paid directly to the policyholder, and employees can choose what they want to do with the money. For example, employees can choose to use the money for groceries while they recover.  

While many employees may want to get hospital indemnity insurance in case of an accident, it can also be used for planned medical expenses such as childbirth. Childbirth can be very expensive, and since 2.8 million U.S. workers are pregnant each year, many families seek employers that offer hospital indemnity to help cover some of the overnight costs.  

What does the insurance cover?  

Hospital indemnity can be distributed and used however the policyholder chooses. Most employees use hospital indemnity towards intensive care and hospitalizations. Some policies may also cover ambulance services and emergency room visits.  

Hospital indemnity insurance can cover spouses and children along with the employee. However, employees can decide which coverage is best for their situation.  

It is important to note that hospital indemnity does not cover regular doctor visits and exams/tests.  

How important is offering hospital indemnity insurance?  

Offering hospital indemnity insurance can be a great way to attract and retain employees. As employees age, their likelihood of needing hospitalization increases. If they are employed by a company that provides insurance to help cover these expensive bills, it can boost their incentive to remain with the company. 

At Helpside we have experts who are happy to answer any questions you may have regarding employee benefits, including hospital indemnity insurance, and whether it is a good fit for your company. Reach out to us at with any questions.