Accident And Sickness Insurance Act
This state legislation specifies income protection policies. It's designed to assist employed persons in the aftermath of an illness or injury to meet living costs when they're unable to work.
Accident and Sickness Insurance Act Details
Depending on your circumstances, your accident and sickness insurance policy can cover your monthly expenses when you’ve fallen ill or been injured. Fully titled the Uniform Individual Accident and Sickness Policy Provisions Act, this law provides reasonable simplification of terms and nationwide standardization across states.
As defined in the Insurance Companies Act, accident and sickness insurance policies assure loss of earnings from the following:
- Accidental bodily injury
- Accidental death
The term policy represents the contract between an insured person and the insurance provider or their agents. It includes endorsements, the application, and riders where applicable.
Personal accident and sickness insurance differ from health insurance in that you receive a fixed, one-time cash benefit as opposed to meeting deductible. This amount is paid directly to you when you're injured or sick due to a covered injury or illness.
Example of the Accident and Sickness Insurance Act
Accident and sickness insurance pays out a one-time cash benefit that you can use to cover everyday expenses and is available as individual or group policies. As an example, Seth is a commercial truck driver who wasn’t feeling well two days after driving through a blizzard, where his trailer cargo had become undone and he was exposed to the elements when securing it.
On visiting the hospital, he's diagnosed with pneumonia, placed in the intensive care unit for a day, and underwent regular inpatient hospital treatment for an additional four days. While his medical insurance covered most of Seth's treatment costs, he still had extra costs such as hospital co-pays and deductibles.
Seth's accident and sickness insurance pays him a lump sum to cover out-of-pocket expenses and has some money left for his bills. Even though he was off work for a week at least, Seth was able to pay for needed child care, his car payment, and buy groceries.
Significance of the Accident and Sickness Insurance Act
Accidents happen, and sickness is never too far away, but how do you cope with the expenses left by losing wages or even death? Insurance plans available on the market are commonly termed health insurance plans, but when does an accident and sickness insurance policy apply?
While health insurance coverage will deal with medical procedures and hospitalization expenses, an individual accident and sickness plan has a narrower but often overlooked purpose. The accident and sickness insurance act requires states to enforce that policies cover the following situations:
- Visits to the emergency room
- Urgent care visits
- Ambulance rides
- Fractured or broken bones
- Cancer diagnosis
When sickness or injury strikes you unexpectedly, you'll be missing work, and the out of pockets expenses associated with general health plans are difficult to offset. A supplemental accident and sickness policy offers peace of mind by easing the additional costs of medical care and daily living.
History of the Accident and Sickness Insurance Act
State legislature bodies have adopted the Uniform Individual Accident and Sickness Policy Provisions Act into law, usually as an amendment to the Health Insurance Act in one form or another. This legislation ensures that individual health policies include both mandatory and optional provisions for sickness and accident benefits.
States like Texas adopted the administration code to their 1977 health insurance act in 1997, and Utah followed with amendments to code 560-126 of 1989 in 2009. Other states to adopt the NAIC early in the Act's onset included Vermont, the Virginia commonwealth, Washington, and Wisconsin.
The policy combines critical illness and accident insurance, which each pay out a lump sum when you're diagnosed with an illness or injured in an accident. What benefit the policyholders or their beneficiaries receive depends on the type of sickness or injury sustained.