A fixed indemnity insurance plan pays a set amount of money for any qualified medical services you receive. So, for example, if your plan specifies a $50 per day benefit for X-rays and you break your arm and have to get an X-ray, the plan pays $50. Limits may apply to the number of benefits you can receive per year.

No. A fixed benefit indemnity plan is not an Affordable Care Act (ACA) Marketplace plan.

It is not major medical insurance. It does not provide coverage for all the essential health benefits outlined in the ACA. Unlike an ACA plan, it will not provide coverage for expenses resulting from any preexisting medical conditions. Read your plan carefully to see what is and what isn’t covered.

Fixed indemnity insurance provides limited benefits. It pays a certain amount per covered service up to a calendar year or lifetime maximum.

You have probably had a health insurance plan where you, the insured, have had to pay out-of-pocket costs like:

Those types of health insurance plans come with costs built in that you are responsible for paying.

Fixed benefit health insurance is designed to help with some of those costs by paying a set amount of money for certain qualified expenses. That money can help pay down a deductible or cover a copay or coinsurance amount.

In short, it can help you manage the out-of-pocket costs that inevitably come with your regular medical insurance plan.

You’re familiar with your major medical insurance plan, which pays for all or a percentage of covered expenses after you meet certain deductibles, copays or out-of-pocket costs. And often, the payments the insurance company makes for you are made directly to health care providers. You see them later in an explanation of benefits form.

Indemnity insurance payments in a fixed benefit health insurance plan work differently. They cover a certain predetermined amount for health care expenses specified in the plan. There are no deductibles to meet. Once a claim for a qualified expense is submitted, the amount that the plan specifies for that service is paid. The money is fixed and paid regardless of benefits that may be paid from other insurance.

Steps in using indemnity insurance:

1. Qualified medical service performed
2. Claim submitted
3. Set benefit paid

As soon as there’s a qualified service performed, the doctor, facility, or in some cases you, will submit a claim for that service. The preset amount for that service will then be paid. If the preset amount doesn’t cover the total bill, you are responsible for what’s left. However, if there’s any benefit money left after the service is paid in full, you receive that remaining amount.

Yes, you can see your own doctor. No, you don’t have to stay in a particular network of doctors or providers. You are paid a fixed amount for certain services, so where you get those services is up to you.

Important: Your fixed indemnity plan won’t have network limitations, but your major medical plan often will. To get the most coverage out of your insurance, keep your main health insurance plan’s network in mind.

Beyond what you pay to have the plan, what the insurance company calls your premium, no. Fixed benefit health insurance has no deductible or copay you have to meet first. If you or your provider claims a qualified service, the set benefit is paid. Remember though, if the set benefit doesn’t cover the total expense, you are still responsible for what’s left.

Yes, you will.

This is called a coordination of benefits issue. A coordination of benefits issue is when the coverages from two separate insurance policies overlap. With your fixed indemnity insurance, there is no coordination of benefits conflict. It pays the fixed benefit for the covered expense regardless of whether another insurance plan you have is also paying toward that same expense.