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.
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.
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.
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. Reviewed by Matthew T. Giberti (NPN 20698856). Last updated: 2026-07.