voluntary accident insurance

What is voluntary accident insurance?

Voluntary accident insurance refers to supplemental accident coverage (also called an accident supplement) in which coverage is offered by an employer but paid for by employees, via payroll deduction. If an employee is enrolled in a voluntary accident policy and incurs expenses from a covered accident, the policy will pay the employee a lump sum amount (specifics vary by policy) that can be used however the employee likes.

If employees enroll in the coverage, the premiums are deducted from their paychecks. Group rates for accident supplements make the coverage more affordable for an employee than the purchase of an individual plan.

Note that some people conclude that “group rates” are always lower than individual rates. That’s not the case, but supplemental benefits such as accident coverage, dental coverage, and disability coverage, are generally less expensive if obtained voluntarily on a group basis via payroll deduction, versus what they would cost if an employee purchased them on their own.

Workplace accidents are covered under workers’ compensation insurance, but accidents that occur outside the course of an employee’s work would be covered by a voluntary accident insurance plan. The accident insurance would help to cover the out-of-pocket costs associated with the employee’s medical insurance plan (deductible and coinsurance) that the employee would otherwise have to pay. Employees who are offered voluntary accident coverage typically have the option to add their spouse and dependents to the plan.

Voluntary accident insurance will have a maximum dollar limit that it will pay, although the specifics vary from one plan to another. And it’s also common for policies to have separate (lower) payout caps for specific treatments and diagnoses, such as ER visits, urgent care visits, stitches, surgery, etc. If a covered member receives medical treatment for an accident or injury, they use their major medical coverage and then submit proof of their out-of-pocket costs to the accident plan for reimbursement, up to the applicable plan maximums.¹