Dive Brief:

• Hospital indemnity insurance is a growing offering among optional work benefits, with more insurance companies getting into the market.

• The insurance is designed to cover part or all of insurance plan deductibles for hospital stays, which can add up to thousands of dollars.

• The benefits often are paid in cash, meaning the policyholder can use the money as he or she chooses.

Dive Insight:

Reliance Standard announced Monday it was offering the product, joining such insurers as Transamerica and Bankers Life in moving into the market in recent weeks. The plans, sometimes called gap insurance, can fill the sometimes-substantial hole between the cost of a hospital stay and the amount health insurance is willing to pay.

The plans come as high-deductible plans (with their correspondingly lower rates) become more popular in workplaces. In recent research, the Guardian Life Insurance Co. of America reported about 60% of workers could not cover a $3,000 out-of-pocket medical cost, and that a third of workers on a high-deductible plan sometimes delayed receiving healthcare to save money.

But because the plans aren't considered major medical insurance, insurers can ask specific questions about the health of potential policyholders. That line of inquiry is specifically prohibited for major plans under the Affordable Care Act.

NPR notes that this may make it difficult for some potential customers to obtain the insurance. It also may be cheaper for consumers to pay for a single, lower-deductible plan rather than take a high-deductible plan and add indemnity insurance.