Ancillary Benefits
Ancillary benefits are a secondary type of health insurance coverage that covers miscellaneous medical expenses that are incurred during a stay at the hospital. Lower employer FICA contributions if the business takes advantage of Section 125, which allows employees to pre-tax dollars for these benefits Ancillary benefits enhance the employer’s reputation among employees Offering ancillary benefits makes a business more competitive in the employment marketplace Ancillary products respond to workers’ needs to access services that are important to have a good quality of life With ancillary dental and vision benefits, workers get preventative care, not just care when a problem develops Ancillary benefits are a secondary type of health insurance coverage that covers miscellaneous medical expenses that are incurred during a stay at the hospital. There are many positive aspects to ancillary benefits, including, but not limited to, the use of pre-tax dollars to pay for them, and they pay for preventative care as well.
Ancillary Benefits
Ancillary benefits are a secondary type of health insurance coverage that covers miscellaneous medical expenses that are incurred during a stay at the hospital. The definition of ancillary benefits means it can cover expenses such as ambulance transportation, blood, drugs, and medical supplies like bandages.
These benefits are usually layered on top of major medical coverage so they are purchased in conjunction.
Understanding Ancillary Benefits
Ancillary benefits are offered to cover those expenses which many neglects to factor into the cost of healthcare. They are usually quoted as a multiplier of daily benefits provided by the hospital. For example, an ancillary policy may cover 20-times this daily benefit.
Health plans aren't enough to keep employees healthy because they still need oral and vision care. Covering costs for these insurances make sense for companies because research shows that dental and vision plans can be effective, and preventive, healthcare tools that might lower medical claims costs in the long run.
Ancillary benefits can protect you from unexpected expenses related to hospital stays.
For example, early symptoms of high blood pressure, diabetes, and other diseases can be detected in an eye exam before showing up in a physical.
Health insurance also doesn't provide income protection in the event of a death; this is the domain of life insurance — another popular corporate benefit. Group life insurance has a high-perceived value as well. According to the global research firm LIMRA, 9 million households have group life insurance through their employers.
Voluntary vs. Employer-Contributory
Ancillary benefits are either voluntary or employer-contributory. On employer-contributory ancillary benefits, the employer usually pays 50 to 100% of the premiums. On voluntary plans, the employer may contribute 0 to 49% of the premiums.
Through payroll deduction, employees pay the premium balance left over after the employer contribution. When an employee uses their benefits, a claim is submitted, and benefits are paid directly to the network-contracted provider or to the member (if a network provider is not used). For life insurance claims, the beneficiary is paid directly (in the event of a death).
List of Benefits of Ancillary Benefits to Employers
Related terms:
Children’s Health Insurance Program (CHIP)
The Children’s Health Insurance Program (CHIP) is a government program that provides health insurance to children age 18 or younger. read more
Federal Insurance Contributions Act (FICA)
The Federal Insurance Contributions Act (FICA) is a U.S payroll tax deducted to fund the Social Security and Medicare programs. read more
High-Deductible Health Plan (HDHP)
A high-deductible health plan is health insurance with a high minimum deductible for medical expenses that must be paid before insurance coverage kicks in. read more
Health Insurance
Health insurance is a type of insurance coverage that pays for medical and surgical expenses that are incurred by the insured. read more
Health Reimbursement Arrangement (HRA)
A health reimbursement arrangement (HRA) is an employer-funded plan that reimburses employees for medical expenses and, sometimes, insurance premiums. read more
Medical Expenses
Medical expenses are any costs incurred in the prevention or treatment of injury or disease. These expenses can be deducted from taxes. read more
Medicare
Medicare is a U.S. government program providing healthcare insurance to individuals 65 and older or those under 65 who meet eligibility requirements. read more
Multiplier
A multiplier refers to an economic input that amplifies the effect of some other variable. read more
Out-of-Pocket Expenses
Out-of-pocket expenses are costs you pay from your own cash reserves, such as medical care and business trips, that may be reimbursable. read more
Payroll Deduction Plan
A payroll deduction plan is when an employer withholds money from an employee's paycheck, most commonly for employee benefits and taxes. read more