A flat cash benefit, paid directly to you.
Fixed payouts per visit or event, with the limits spelled out upfront.
Key Features of Fixed Indemnity Plans
Cost share offsetting, lump sum payments, and more.
Predetermined benefit amounts
Your plan pays a set dollar amount per covered event, regardless of what your primary insurance covers.
Use benefits your way
Benefits are paid directly to you, and you decide how to use them, medical or otherwise.
Works alongside your existing coverage
Designed to supplement your primary health plan, with benefits you can put toward costs like deductibles, copays, and coinsurance.
The questions we hear most.
No jargon. Just straight answers.
Still have questions? Talk to us.
Our licensed insurance agents are here to answer your questions and help you find the right plan.
Yes, and this is actually the intended use case for fixed indemnity coverage. Having both means your ACA plan provides comprehensive coverage with all required consumer protections, while your fixed indemnity plan provides cash benefits that help offset the deductibles, copays, and coinsurance your primary plan doesn't fully cover. The two products serve different purposes and work well together for exactly this reason.
It depends on how your premiums were paid. According to IRS guidance, if you paid your fixed indemnity premiums with after-tax dollars, the benefits you receive are generally tax-free. If premiums were paid pre-tax through an employer's cafeteria plan, the IRS has indicated that benefits may be taxable to the extent they exceed your unreimbursed medical expenses. The tax treatment can be nuanced depending on your specific arrangement. Consult a tax advisor for guidance on your situation.
No. A fixed indemnity plan does not constitute minimum essential coverage under the ACA. If you're in a state with an individual coverage mandate and your only coverage is a fixed indemnity plan, you may be subject to a state tax penalty. Fixed indemnity is supplemental coverage — it is designed to work alongside qualifying primary coverage, not replace it.
Most fixed indemnity plans have short waiting periods or can take effect relatively quickly after enrollment — often within days. Some plans may impose a short waiting period before certain benefits become available, particularly for non-emergency care. Review the effective date and any waiting period provisions in your specific plan before assuming immediate coverage.
No — though they are related product categories. Critical illness and specified disease policies (like cancer-only coverage) pay a lump-sum benefit upon diagnosis of a specific condition. Fixed indemnity plans pay benefits based on medical events — a hospitalization, a doctor visit — regardless of the underlying diagnosis. Both are supplemental products, but they respond to different triggers. Fixed indemnity is event-based; critical illness is diagnosis-based. Some people carry both as complementary layers of supplemental protection.
Ready to find the right coverage for you?
We’re here to help you make the right decision.