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Hospital Deductible Insurance* (HDI). Supplementary Group Coverage Complementing High Deductible Health Plans (“HDHPs”).

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Hospital Deductible Insurance* (HDI)

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Hospital Deductible Insurance* (HDI)

Supplementary Group Coverage Complementing

High Deductible Health Plans


*The following definition for Hospital Deductible Insurance (HDI) is applicable to each reference used in this presentation. Hospital Deductible Insurance (HDI) is a fixed indemnity plan intended to supplement some of the deductible expense associated with hospitalization when primary coverage is provided by a high deductible major medical health insurance plan.

Helps Fill The Most Important “Gap” Created By HDHPs:Hospitalization

Simple And Cost Effective

  • First Hospital Confinement Coverage

    - The full benefit selected is payable when a covered person is confined as an inpatient in a hospital for at least one day

  • The benefit is paid once per covered person per Plan Year

  • No Medical Questions Or Physical Exam

  • Guaranteed IssueFor All Eligible Employees And Their Eligible Dependents

  • Benefits Paid Directly To The Insured

Fixed Indemnity BenefitsExempt From The Affordable Care Act (Health Care Reform)

Benefit Amounts

  • Employer can select any benefit amount up to $5,000 in $500 increments

  • Standard benefit amounts:

    • $1,000

    • $2,000

    • $3,000

    • $5,000

Premium Basis

  • “Blanket”

    • 100% of employee-only premium paid by employer

    • Employee pays the balance for dependent coverage

    • Pre-existing conditions exclusion waived for groups with 10+ employees

  • Voluntary

    • Employee pays all or any part of the premium

    • Pre-existing conditions exclusion applies

Monthly Premiums

Hospitalization caused or contributed to by:

  • Pre-existing conditions (not applicable to groups with 10+ eligible employees & employer pays 100% of employee premium)

  • Suicide or any intentionally self-inflicted injury

  • Commission, or attempt to commit, a felony

  • Participation in a riot or insurrection

  • War or act of war

  • Dental care except for accidental injury to sound, natural teeth and gums within 6 months of the injury

  • Treatment received outside of the U.S.

  • Treatment received in a VA or federal hospital unless required to pay or treatment where the person would not have to pay without insurance or treatment provided by a family member or treatment covered by worker’s compensation or injury or sickness sustained while on active duty military service


Pre-existing Conditions*

Definition: Any condition for which medical advice, consultation, care or treatment was recommended by or received from a doctor or symptoms existed that would cause a reasonable person to seek consultation, care or treatment from a doctor in the six months prior to becoming insured

Duration: Pre-existing conditions exclusion applies only during the first six months of coverage

*Pre-existing Conditions Exclusion Is Not Applicable

To Groups With 10 Or More Eligible Employees And The Employer Pays The Entire Premium

Compatible With:

  • All HDHP Plans

  • Health Reimbursement Accounts (HRAs)and

  • Health Savings Accounts (HSAs)

HSA Compliance

  • HSA legislation1 prohibits anyone covered under a qualifying high deductible health plan and also covered under “any health plan which is not a high deductible health plan“ from taking a tax deduction for an HSA

  • Title XII, Section 223 provides an exception for “other permitted insurance” which does not result in disqualification including (c)(3)(C) “insurance paying a fixed amount per day (or other period) of hospitalization”

1 Public Law 108-173 Medicare Prescription Drug Improvement And Modernization Act of 2003 – Effective January 1, 2004

State Availability

HDI provides specific protection against hospitalization - the coverage “gap” created by HDHPs.

Outpatient expenses can be significant but most employees can find a way to pay for them because they usually do not occur all at once.

HDI does not attempt to cover the outpatient gaps because:

  • the combined HDHP and in/outpatient gap plan premium will likely total as much or more than the cost of a single comprehensive policy;

  • Providing outpatient gap benefits can lead to increased utilization which negates the lower health care consumption behavior expectation that is the basis for the lower rates offered through HDHPs;

  • HSA legislation prohibits a gap policy that provides outpatient benefits from being paired with a high deductible policy.

Outpatient Expense Gaps

Rate Comparison With A Major Competitor’s In & Outpatient Gap Plan1

Monthly Premiums – Employee Through Age 54

1outpatient gap benefits capped at 50% of inpatient amount

2 HDI rates shown are blanket (i.e. 100% employer-paid)

Rate Comparison With A Major Competitor’s In & Outpatient Gap Plan1

Monthly Premiums – Employee Age 55+

1 outpatient gap benefits capped at 50% of inpatient amount

2 HDI rates shown are blanket (i.e. 100% employer-paid)

Competitor’s In & Outpatient Gap Plan Design

  • Benefits are based on the expense incurred (HDI pays the full benefit upon admittance to the hospital)

  • Requires 50% minimum participation (HDI has no participation requirement)

  • Outpatient benefits are capped at 50% of inpatient benefit maximum and are limited to expenses incurred for:

    • hospital outpatient facilities

    • hospital emergency rooms (for injury only)

    • outpatient surgery centers

    • outpatient diagnostic testing facilities

    • ambulance services

Managing Underwriter:

Insured By:

United States Fire Insurance Company

through Fairmont Specialty, part of the Crum & Forster Enterprise

Plans are underwritten by the United States Fire Insurance Company. Fairmont Specialty and Crum & Forster are registered trademarks of United States Fire Insurance Company. The Crum & Forster group of companies is rated A (Excellent) by AM Best Company 2014.

This is a brief description of coverage provided under group policy number AH-27330, form number GAC-27330, and is subject to the terms, conditions, limitations and exclusions of the policy. Please see the policy and certificate for details. Coverage may or may not be available in all states.

This material is provided for information purposes only and is not intended to be a representation of coverage that may exist in any particular situation under a policy issued by one of the companies within the Crum & Forster Enterprise. All conditions of coverage, terms, and limitations are defined and provided for in the policy.

C&F, Crum & Forster, and Fairmont Specialty are registered trademarks of United States Fire Insurance Company.

The Crum & Forster Enterprise, which is part of Fairfax Financial Holdings Limited, is comprised of leading and well-established property and casualty business units. The insurance companies within the Enterprise, rated A (Excellent) by A.M. Best Company, are: United States Fire Insurance Company, The North River Insurance Company, Crum and Forster Insurance Company, Crum & Forster Indemnity Company, Crum & Forster Specialty Insurance Company, Seneca Insurance Company, Inc., Seneca Specialty Insurance Company, First Mercury Insurance Company, and American Underwriters Insurance Company.

Available Through Insurance Brokers And

Consultants Nationwide

For More Information Contact:

Affinity Group Underwriters

4510 Cox Road, Suite 111Glen Allen, VA 23060804.273.9797

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