Indemnity (Fee-for-Service) Health Insurance
An indemnity plan, also known as a fee-for-service plan, is one of the most flexible types of health insurance available.
These plans allow you to visit any doctor, hospital, or healthcare provider you choose, without being restricted to a specific network. This means you have greater freedom and control over your healthcare decisions and are not limited by provider networks when seeking care.
At Z-Health Enterprise, we can provide instant, accurate quotes on available indemnity plans in your area and help you compare them with other plan types. Our goal is to ensure you understand your options clearly so you can choose coverage that fits both your needs and your budget.
An Indemnity Plan May Be a Good Fit If You:
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Want the freedom to choose any doctor or hospital
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Prefer not to select a primary care physician (PCP)
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Do not want referral requirements to see specialists
How Indemnity Plans Work
With an indemnity plan:
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You are not required to use a provider network
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You typically pay for services upfront
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You then submit a claim to your insurance company for reimbursement
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You must usually meet your annual deductible before the plan begins paying benefits
This structure provides flexibility, but also requires more involvement in managing claims and payments.
Preventive Care Considerations
Some indemnity plans include coverage for preventive services such as annual exams and routine visits, while others may not. In some cases, preventive care may:
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Be partially covered
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Not apply toward your deductible
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Be excluded altogether
It is important to review how preventive services are handled before selecting a plan.
Understanding UCR (Usual, Customary & Reasonable) Rates
Unlike PPO or HMO plans, indemnity plans do not use provider networks or negotiated rates. Instead, reimbursement is based on UCR (Usual, Customary & Reasonable) charges, which reflect what insurance companies determine is a typical cost for a service in a given area.
Insurance companies generally set UCR rates around the 80th percentile, meaning:
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80% of providers charge at or below that amount
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20% may charge more
If your provider’s bill exceeds the UCR amount, you may be responsible for the difference.
Example
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Procedure cost billed by provider: $2,000
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Insurance UCR allowance: $1,500
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Plan pays: 80% of $1,500 = $1,200
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You pay: 20% of $1,500 ($300) + remaining $500 above UCR = $800 total out-of-pocket