Does Health Insurance Cover Lost Wages?
Health insurance typically does not cover lost wages, although other types of insurance can. You may be able to find a supplementary plan that works in conjunction with your major medical plan to reimburse you for wages lost while you were hospitalized for an illness or injury.
Depending on the specific circumstances, other programs can cover your loss of income. Workers’ compensation plans are designed to cover wages lost during an accident at work, auto insurance plans often have options designed to cover lost wages due to an automobile accident, and disability insurance may cover lost wages in a variety of situations.
How do supplementary health insurance plans work?
Supplementary health insurance is designed to go above and beyond the coverage of your basic health insurance plan to cover items or services it does not. The availability of supplementary or voluntary health plans vary from company to company.
For instance, insurance companies may offer voluntary plans geared toward covering expenses incurred by an extended hospital stay. A plan may work by setting up coverage options and limits, charging a premium, and then paying out benefits when and if the need arises.
Rather than send payments to doctors or medical facilities, the plans may pay benefit checks directly to you and you can use the money to pay for expenses related to your medical care. These expenses can include other medical plan deductibles, therapy or hospital services not covered by your health plan, lost wages, or your rent and mortgage payments.
The plans may be set up to offer two types of payments, one given in a lump sum that applies to the entire year and another daily benefit that lasts a predetermined amount of time. Voluntary plans may not, however, be available directly to individuals and are only available through a person’s employer.
How does workers’ compensation work?
Workers’ compensation is also typically only available through an employer. It’s meant to cover expenses related to an employee injured or disabled on the job. The Department of Labor notes that you may have to file a claim with your employer’s insurance company and back it up with documentation that proves you were unable to work.
As with any type of insurance, each state has its own set of laws and regulations related to workers’ compensation and most have a workers’ compensation board that acts as a watchdog for workers’ compensation in the state.
How does disability insurance work?
Disability insurance typically consists of an independent, stand-alone policy that is separate from any other type of insurance. Many employers offer disability insurance options or you can purchase a disability insurance policy on your own, according to USA.gov.
The two types of disability insurance include short-term and long-term disability, known as STD and LTD, respectively. Short-term policies usually only cover a period of up to two years. Long-term policies can provide coverage and benefits that last your entire lifetime.
You need to be careful before jumping into a disability policy, as specifics can vary greatly. One of the first things to find out is what the exact definition of disability is. A policy may deem you disabled if you are not able to carry out the duties of any job while others may consider you disabled if you cannot carry out the duties of your own profession. The latter is typically preferable.
Other considerations include when benefits start and how long benefits last. The majority of disability insurance plans have a certain amount of time you must wait after becoming ill or disabled and receiving your first disability payment.
You already know benefits from a short-term policy last a maximum of two years, but the length of a long-term policy can vary greatly. Some may extend certain benefits for a lifetime, others may continue until you hit age 65, and still others may vary depending on your specific situation.
Disability insurance can also be affected by Social Security payments, workers’ compensation, or other types of benefits you may be receiving. Your overall disability payments may go down in relation to other benefits or fail to increase to match inflation or an increased cost of living. If you are receiving disability payments through your employer, you should also find out if the insurance pays into your pension plan.
When does auto insurance reimburse you for lost wages?
Car insurance policies can offer liability coverage that includes reimbursement for lost wages if you are disabled due to a car accident. The Texas Department of Insurance notes that the coverage can help pay for medical costs, funeral costs, and lost income, and offer reimbursement for pain and suffering caused by an accident. The coverage may extend to you, family members, and others who were injured or hurt in the accident, depending on the specifics of your auto insurance policy.