Fixed Indemnity Insurance Rules by State (2026)

Fixed indemnity insurance, a supplemental product that pays a fixed cash amount for covered events like a hospital day, is legal in every state. But how it's regulated varies a lot. Some states set a minimum daily benefit, some require specific consumer notices, and a few impose strict limits or annual filings. This guide maps the states with extra rules.

Quick answer: In 2026, fixed indemnity is available everywhere, but about half of states layer on extra requirements, per day benefit minimums, mandatory "this is not major medical" notices, or structural limits. The other half apply standard excepted benefit treatment with no unusual rule.

First, what fixed indemnity is (and isn't)

Fixed indemnity pays a predetermined cash amount when a covered event happens, say, a set dollar amount per day in the hospital, regardless of your actual medical bills. That's very different from major medical, which pays a share of your real costs. Fixed indemnity is supplemental: it's not comprehensive coverage, not ACA minimum essential coverage, and not a substitute for a real health plan. It's meant to sit alongside comprehensive coverage.

Couple reading a benefit summary together in a clinic waiting room

States with extra fixed indemnity rules (2026)

These states go beyond standard treatment. Where a state sets a hospital-indemnity minimum, it's expressed as a required benefit floor (a regulatory minimum, not a price).

State	Notable rule
Arkansas	Hospital indemnity ≥$80/day for ≥31 days (plus rider/nursing/ICU minimums); required Outline of Coverage; 10-day free look
California	Mandatory Outline-of-Coverage format; a ≥$15/day floor applies to Medicare-eligible insureds only
Colorado	2025 rule: mandatory page-1 notice, must be a separate policy, no coordination of benefits, may not be marketed as an ACA substitute
Idaho	Hospital indemnity ≥$40/day for ≥31 days; mandatory first-page "Notice to Buyer" legend
Illinois	Hospital indemnity ≥$30/day for ≥31 days; Illinois enforces the 2024 federal fixed indemnity disclosure at the state level
Iowa	Hospital indemnity ≥$40/day for ≥31 days; benefits paid regardless of other coverage; prescribed Outline of Coverage
Kansas	Hospital indemnity ≥$50/day for ≥31 days; a "THIS IS A LIMITED POLICY" notice in ≥18-point bold
Kentucky	Mandated cover-page disclosure that the product is a supplement, not a substitute for major medical
Louisiana	Must pay a fixed amount per day/period regardless of expenses, plus a clear "not comprehensive / not ACA" notice
Maryland	14-point disclosure; a 2025 law conformed definitions to federal references (streamlining, not a ban)
Minnesota	Minimum loss ratio rule; accident-only and sickness can't be combined in one individual policy
New Mexico	Heavily regulated (2025): benefit types capped, proof of major medical required, benefits capped at $500,000, mandatory "not major medical" disclosure
Oklahoma	Hospital indemnity ≥$30/day for ≥31 days; sub-minimum products sold only as "Limited Benefit" with an Outline of Coverage
Pennsylvania	Hospital indemnity ≥$10/day for ≥31 days; fixed-daily-benefit format required
Rhode Island	Allowed only if truly supplemental; carriers file an annual certification that it's marketed as a supplement
South Carolina	Hospital indemnity ≥$30/day for ≥31 days
Utah	Hospital indemnity ≥$50/day for ≥31 days; benefits paid regardless of other insurance; Outline of Coverage required
Virginia	Separate policy, pays per category of service, no coordination; required "this is a supplement, not a substitute" notice

States with standard treatment

In the remaining states, Alabama, Arizona, Florida, Georgia, Indiana, Michigan, Missouri, Mississippi, North Carolina, Nebraska, Nevada, Ohio, Oregon, Tennessee, Texas, Wisconsin, West Virginia, and Wyoming, fixed indemnity gets standard excepted benefit treatment, with no per day minimum, format mandate, or product-specific disclosure legend beyond the norm.

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The federal notice, briefly

There was a 2024 federal rule requiring a consumer notice on fixed indemnity policies. A court vacated that 2024 notice requirement in December 2024, so it isn't federally required; an earlier 2014 individual market notice still applies. States responded differently, Illinois chose to enforce the disclosure at the state level, while others did not adopt it. Either way, expect any fixed indemnity policy to come with a disclosure telling you it isn't comprehensive coverage.

What to check before you buy fixed indemnity

The Outline of Coverage. Where required, it spells out exactly what the plan pays. Read it.
The "not major medical" notice. If a plan is being pitched as a replacement for real health insurance, that's a red flag.
How it pays. Fixed cash per event, not a share of your bills, so match the benefit amounts to what you're actually worried about.
Whether you have comprehensive coverage. Fixed indemnity works best alongside a real health plan, not instead of one.

Key takeaways

Fixed indemnity is legal everywhere, but about half of states add per day minimums, required notices, or structural limits.
New Mexico and Colorado have some of the strictest 2025 rules; states like Texas and Ohio apply standard treatment.
The 2024 federal disclosure was vacated in court; a 2014 notice still applies, and some states require their own.

Get help deciding whether fixed indemnity fits

Supplemental coverage can make sense, but only alongside the right foundation. As an independent, carrier neutral brokerage, we can help you weigh fixed indemnity against comprehensive coverage for your situation. Free, with no obligation.

Sources

Matthew T. Giberti Licensed Insurance Producer · National Producer Number: 20698856 About Matthew →

This article is general information, not insurance or legal advice. Regulatory details reflect state law and guidance as of the last updated date and can change; confirm current terms and the specific product's approved form before you enroll. Last updated: 2026-07.

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