Hospital indemnity insurance is a supplemental insurance plan designed to pay for the costs of a hospital admission that may not be covered by other insurance. The plan covers employees who are admitted to a hospital or ICU for a covered sickness or injury. Hospital indemnity insurance can be particularly helpful since a majority of Americans don’t have enough savings to cover unplanned medical bills.1 The plan pays cash directly to employees even if they don’t incur any out-of-pocket expenses. The payments can be used for any purpose, including: