Supplemental Benefits

ACLI Explains Supplemental Benefits

Overview

Supplemental benefits products are insurance policies that provide financial protection against expenses associated with accidents or illnesses not covered by major medical insurance. These products, provided through employers or offered on an individual basis, are key to the financial security of many families across the nation.

Supplemental benefits products also include stop loss plans that protect employers self-funding medical plans from higher than expected medical claims. Another supplemental product is wellness benefits that encourage healthy lifestyle choices by covered individuals.

Summary of the supplemental benefits products ACLI supports through its advocacy efforts:

• Accident: Pays a benefit following a serious accident resulting in injuries requiring hospitalization or treatment. These benefits supplement existing medical coverage to help pay unexpected out-of-pocket costs.

• Critical Illness or Specified Disease: Supplements existing medical coverage to help cover costs when an individual suffers a disease or condition specified in the policy, like a stroke, heart attack or cancer.

• Dental: Helps cover dental care costs.

• Hospital Indemnity: Pays a benefit as a supplement to existing medical coverage when policyholders are admitted to a hospital.

• Stop-Loss: Provides financial protection against higher than expected medical claims for employers that self-fund medical plans for their employees.

• Vision: Provides benefits for vision care.

• Wellness: Provides policyholders with a benefit for maintaining a healthy lifestyle. Wellness benefits are frequently included in other supplemental policies, like critical illness, specified disease and hospital indemnity.

ACLI Position

Life insurers help people retire with security – with more products, availability, accessibility and affordability for all. ACLI will advocate for state or federal laws and regulations that support the important financial protections supplemental benefit products provide. ACLI will work to ensure that loss ratio requirements for supplemental benefit products are appropriate and that employers and individuals maintain access to the supplemental benefits coverage they want and need.

ACLI also will work to maintain or improve the current federal and state tax treatment of supplemental benefit products. We will take appropriate steps in response to any federal and state tax or assessment proposals that would harm consumers’ access to supplemental benefits products.