Indemnity Plan

What Does Indemnity Plan Mean?

Indemnity insurance plans give individuals the freedom to manage their own healthcare and visit nearly any doctor or hospital of their choice. A set portion of the total charges is then covered by the insurance company.

Indemnity plans are also referred to as “fee-for-service” plans.

Insuranceopedia Explains Indemnity Plan

There are two types of indemnity insurance plans: professional indemnity and indemnity health. While most indemnity insurance plans are voluntary, some businesses are legally required to provide such coverage for their employees. The same pay-after-the-fact model shows up outside of health plans too, including indemnity insurance for cars, where the insurer reimburses the policyholder for a covered loss instead of arranging repairs directly.

Indemnity health insurance reimburses the insured after they submit a claim for covered medical care. These plans typically pay a specific amount per day for a set number of days. Some plans may also include coinsurance, which is covered by the insurer. Doctors and clinics that accept patients on indemnity plans usually carry their own medical office insurance to handle the professional liability side of treating patients under any payment arrangement.