Accident insurance for the self-employed: a hiking injury on a high-deductible plan

Andre is 44 and runs a one-person house painting business in Las Vegas. He sets his own hours, picks his own jobs and has no paid sick days. When he is not working, he is not earning.

He buys his own health insurance. To keep the monthly premium down, he chose a high-deductible plan with a $6,000 deductible. It works for him in an ordinary year: a checkup, a prescription now and then. What worried him was the other kind of year, the one where something goes wrong and he owes thousands before his health plan pays much.

That is why he added Accident ExpenseGuard, an accident plan underwritten by Golden Rule Insurance Company, a UnitedHealthcare company. This story follows what happened when he needed it, including the parts it did not cover.

What he chose

Accident ExpenseGuard has two parts.

• An accidental injury benefit. You choose an amount: $5,000, $7,500, $10,000, $15,000 or $20,000. That is the most the plan pays per covered person per calendar year, and it starts over each year.
• An accidental death and dismemberment (AD&D) benefit. It matches the injury amount you choose and is a lifetime maximum per covered person.

Andre covered only himself and chose the $15,000 level. That gave him up to $15,000 of accidental injury benefit per calendar year and a $15,000 lifetime AD&D amount.

He also noted the two rules that shape every payment:

• A $250 deductible per covered person per calendar year comes out first.
• Payment is based on actual charges. The plan uses the Explanation of Benefits (EOB) from his health insurance, which shows the charges after the health plan’s adjustments, discounts or allowances. If there is no EOB, the plan uses what the policy calls Reasonable and Customary charges, based on the most common charge for similar services in the area.

The money is paid to Andre, not to the hospital. And it does not depend on what his health plan pays. Accident ExpenseGuard pays benefits even if he has other medical coverage.

A Sunday on the trail

On a Sunday in May, Andre and a friend went hiking in the hills west of Las Vegas. It was a trail he had done before. On the way down, a patch of loose rock gave way under his left foot. He fell sideways and heard his ankle crack.

His friend helped him limp the last half mile to the car and drove him to the emergency room. A doctor examined him and ordered X-rays and a CT scan. The ankle was broken in two places and needed surgery.

He had the operation the next morning, under anesthesia, and stayed one night in the hospital. He went home with a prescription for pain medicine and a pair of crutches. Over the next three weeks he had three follow-up visits with the surgeon and one more X-ray.

He could not climb a ladder or stand on a scaffold for weeks. He had to push back two jobs and turn down a third.

Matching his care to the plan’s time limits

Accident ExpenseGuard lists covered services with time limits for treatment after an accident.

Within 48 hours: burns or lacerations, a diagnosed concussion, an emergency room visit and an urgent care center visit.

Within 30 days: ambulance, labs and X-rays, anesthesia services, MRI or CT scan, doctor visits, prescriptions, fractures, prosthetics, hospital stay or ICU, and surgery.

Andre went to the ER the same afternoon. His imaging, surgery, anesthesia, hospital night, prescription and follow-up visits all fell within 30 days. The time limits can differ in some states, so the policy is the final word.

The claim

The policy requires notice of claim within 30 days of the date the loss began, or as soon as reasonably possible. Andre gave notice the same week, then sent his claim form with the EOBs as they arrived from his health plan.

Here is what the EOBs showed as actual charges after the health plan’s adjustments:

• Emergency room visit: $1,850
• X-rays and CT scan: $1,120
• Surgery: $9,400
• Anesthesia: $1,350
• One-night hospital stay: $2,900
• Prescription: $60
• Three follow-up doctor visits at $165 each: $495
• Follow-up X-ray: $110

Total actual charges after adjustments: $17,285.

The arithmetic

Step 1. Start with the actual charges: $17,285.

Step 2. Subtract the $250 deductible: $17,285 minus $250 is $17,035.

Step 3. Apply the maximum. Andre’s accidental injury benefit is up to $15,000 per calendar year. $17,035 is more than that, so the payment stops at the maximum.

Accident ExpenseGuard paid $15,000, directly to Andre.

The $2,035 above the maximum ($17,035 minus $15,000) was not paid by this plan. And because he had used his full $15,000 for the calendar year, the plan would not pay any more accidental injury benefits for him until the new year, when the amount starts over.

His AD&D benefit was not touched. It applies only to accidental death or the specific losses the policy lists, and a broken ankle is not one of them.

What a different level would have paid

Because the payment is the actual charges minus the deductible, capped at the level chosen, it is easy to see how the choice of level played out for Andre. His charges after the deductible were $17,035 in every case.

• At $5,000, the plan would have paid $5,000.
• At $10,000, it would have paid $10,000.
• At $15,000, his actual choice, it paid $15,000.
• At $20,000, it would have paid the full $17,035, leaving $2,965 of benefit for the rest of the calendar year.

A higher level costs more in premium, and in a year with no accident he will not use any of it. That is the trade he weighed when he chose $15,000. There is no right answer for everyone.

Where the money went

The plan does not tell you how to spend the benefit. Andre split it three ways.

His health plan’s share. His high-deductible plan left him owing his full $6,000 deductible plus his share of costs after that. A large part of the $15,000 went straight to those bills.

Lost income. With two jobs pushed back and one lost, he had a month or more of short income. Part of the payment covered rent, his truck payment and his business insurance while he recovered.

Getting back to work. The rest stayed in the bank as a cushion until the jobs started again.

Accident ExpenseGuard is not disability insurance, and it does not pay a weekly income. It pays based on medical charges. But because the money comes to him, he could use it where it was needed most.

What the plan did not do

Here is where Andre’s coverage stopped. Some of these limits came up in his claim, and one shaped how he thinks about his work.

It does not cover injuries on the job. This is the big one for anyone who works with their hands. The policy excludes an injury arising out of, or in the course of, employment for wage or profit. Andre was hurt on a Sunday hike, on his own time, so the exclusion did not apply. If he had fallen off a ladder while painting a client’s house, the injury would have come from work he does for pay, and this plan would not cover it. If you are self-employed, ask what coverage you have for injuries on the job, because this is not it.

It did not pay for his crutches. The policy excludes durable medical equipment. Crutches, walkers, wheelchairs and similar items are outside the plan.

It stopped at the maximum. His charges after the deductible came to $17,035. The plan paid $15,000, the most it pays for one person in a calendar year at the level he chose. A higher level would have meant a higher maximum, and a higher premium.

It does not cover infections. The policy excludes infections of any kind, regardless of how they were contracted. If his surgical wound had become infected, that treatment would not have been covered by this plan.

Some activities are excluded. Hiking is not on the exclusion list. But the policy excludes injuries while being paid to take part in or instruct in rock or mountain climbing, skiing, horseback riding, or racing a non-motorized vehicle. It also excludes injuries while taking part in activities like parachute jumping, hang gliding, skydiving, bungee jumping, rodeo sports and scuba diving at 60 feet or deeper. And it excludes injuries while a covered person is intoxicated, as defined by state law.

It only covers care in the United States. The policy excludes expenses incurred outside the United States. If Andre had broken his ankle on a trip abroad, the bills would not count.

It is not health insurance. Accident ExpenseGuard is a supplement. It is not major medical coverage and not Minimum Essential Coverage, and it should not be used as a substitute for comprehensive health insurance. Andre’s health plan paid its share of his surgery after the deductible. Accident ExpenseGuard helped with what his health plan left to him.

Is accident coverage a fit for self-employed people?

It depends on how you work, how you are insured and how much you could pay if something happened tomorrow.

What does your health plan leave to you? On a high-deductible plan, you can owe thousands before your health plan pays much. A plan that pays on actual charges, up to a yearly maximum, can help with that gap.

What happens to your income if you stop working? If no work means no pay, a cash benefit you can spend as you see fit may help. It is not a replacement for income protection, and it pays only after a covered accident.

Where are you most likely to get hurt: at work or off the clock? Be honest about this one. This plan does not cover injuries that arise out of employment for wage or profit. If your main risk is on the job, you will want to look at coverage built for that.

Which benefit level fits? The choices run from $5,000 to $20,000 per calendar year. Think about your health plan’s deductible and out-of-pocket costs when you choose.

Can you apply? The primary insured must be 18 to 64 at the time of application. The policy is renewable until the primary insured’s 70th birthday, subject to the policy’s terms, such as paying premiums when due. The policy also says premiums will not change solely because of claims made or a change in a covered person’s health.

Who else depends on you? Andre covered only himself. A spouse and children can be added for extra premium. Children can be covered from birth to age 25 and drop off on their 26th birthday, or as required by state. Each covered person has their own yearly maximum and their own deductible, with up to two deductibles per family per calendar year.

Will you keep your paperwork? The plan works from your health plan’s EOB. Keep each one, give notice of a claim within 30 days, and send the EOBs with your claim form.

The short version

After a broken ankle on a weekend hike, Accident ExpenseGuard paid Andre $15,000, the most his level allows in a calendar year, directly to him, regardless of what his health plan paid. It went toward his deductible, his bills and the weeks he could not work.

It did not pay the $2,035 above his maximum or his crutches. And it would not have paid anything if he had been hurt on the job.

This is an outline of how the plan works. The policy itself sets the full terms, including the exclusions and any state-specific differences.