Accident insurance plans pay employees cash in the event of covered accidents. When putting an accident insurance plan in place, one of the first options you’ll need to decide is if you’ll allow the accident plan to cover employees 24 hours a day or only cover them for off the job related accidents.
RESOURCE: If you aren’t familiar with accident insurance policies, check out The Definitive Guide to Accident Insurance Policies.
What’s The Difference Between 24 Hour Coverage And Off The Job Coverage
An accident policy that covers you around the clock whether you are working or not is called 24 hour coverage. A covered accident would pay regardless of whether you were working or not.
The other option is off the job only coverage. This would only cover you when you weren’t working. So, if you fell down at work and broke your leg, you wouldn’t receive any benefits from your accident policy. This would be the case even if a broken leg is a covered accident under your policy.
However, if you broke your leg playing softball after work, then that’s an off the job related injury and you could receive benefits for that.
Accidents that occur on the job may be also covered under workman’s compensation insurance.
Not Every Employer Group Qualifies For 24 Hour Coverage
Depending on the type of employer group you are, you may not have the option to elect 24 hour accident coverage. For example, a municipality with a large majority of police and fire employees might not qualify.
If your employer group qualifies for 24 hour coverage, that’s a big plus. And in my opinion, if you are able to offer 24 hour coverage, that’s what you should offer your employees if you can get it.
Employer Groups Often Don’t Offer 24 Hour Coverage Even When Their Employees Are Eligible For It
Even when their employees might be eligible, some employers choose not to let their employees get the 24 hour coverage.
I guess the thinking is that employees will abuse the benefits of the policy and then also make workman’s compensation claims to somehow game the system.
In my opinion, it’s a mistake to opt employees out of 24 hour coverage when they can get it.
Let’s get into why I think that.
Eight Reasons To Offer The 24 Hour Coverage To Your Employees
Now that you know I’m an ardent supporter of 24 hour coverage, let’s go through some reasons why it’s a good idea to go with the 24 hour coverage.
- The employee is paying the premium If the employee is paying 100 percent of the premiums for the policy, then you should get a policy that serves them best. If you are contributing to the cost of the plan, then that might be different.
- The plan is portable The employee probably won’t work for you forever. If the policy is portable and they can take it with them, that 24 hour protection goes with them.
- You don’t penalize the whole family Accident plans also cover family members and that 24 hour coverage extends to them as well. If an employee has a spouse that’s in a high risk profession that wouldn’t normally qualify them for 24 hour coverage, they could get it if you offer it.
- It doesn’t cost that much more Compare the difference in premiums. The cost probably isn’t that much more to offer 24 hour coverage. It’s well worth it to avoid the confusion employees might experience when accidents happen on or off the job.
- You want to offer policies that pay not one’s that don’t Employees hate insurance but more importantly, they hate paying for policies that let insurance companies out of paying. When an insurance company doesn’t pay for something that an employee perceived they would get, everyone looks bad.
- Health insurance plan deductibles are so high It’s not unsual for employees to have $10,000 worth of deductibles between them and their families before the health insurance pays anything. Every dollar can help when an employee or a covered family member has an accident.
- Supplement off the job short term disability Payments from an accident insurance policy that has 24 hour coverage can supplement a short term disability income insurance plan that only covers off the job accidents.
- Act as short term disability Since short term disability is often offered as an optional employee paid benefit, it’s not unusual for employee’s to waive the short term disability option. While not a replacement for short term disability, a 24 hour accident insurance plan is better than nothing.