Ancillary Coverage: Protect Yourself And Employees

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With over 92% of Americans having health insurance coverage from either public Medicare, Medicaid, or private insurers, the importance of ancillary services cannot be overestimated.

Whether you’re an employer or an employee, knowing ancillary benefits can give you an edge in business or protect you with the non-wage benefits you need. But before we jump on the types of ancillary insurance programs, let’s mention the benefits mandated by law.

• Minimum wage: According to the Fair Labor Standards Act (FLSA), the federal minimum wage is $7.25 per hour.
• Overtime pay: The FLSA also sets overtime pay requirements for employees working over 40 hours a week.
• Leave benefits: The FLSA guarantees maternity, paternity, and adoption leave to some employees, but the leave may not be paid.
• Unemployment: Qualified employees who were laid off are entitled to unemployment pay for some time.
• Extended medical benefits: The Consolidated Omnibus Budget Reconciliation Act (COBRA) obliges companies with over 20 employees to provide comprehensive medical benefits to former employees for up to a year and a half.

It may sound like a lot, but the ever-growing competition in the insurance market and increasing demand for all-encompassing insurance make extra insurance extremely popular.

Types of Ancillary Services

As an employee, you may need one or a few of the following types of ancillary insurance programs:

• Vision: Eye surgeries, optometry services, and glasses are usually expensive and not covered by standard health plans. Vision insurance is best for employees with vision problems or those expecting such issues in the future.
• Dental: There’s no denying that dental care is an absolute necessity for any employee. An effective preventive healthcare tool, dental insurance, can lower medical expenses dramatically.
• Disability: Short-term and long-term disability insurance can support employees recovering from illnesses or work injuries.
• Group life: Group life insurance helps employees protect their families when the most dramatic outcome is the employee’s death. The beneficiaries would get enough money to support their life while recovering from the grief.

On top of that, you can have a Health Savings Account (HSA) for saving money for the medical expenses not covered by your health plan, as well as such benefits as hearing insurance, critical illness and accident insurance, accidental death, and dismemberment insurance, or pet insurance.

Who Pays for Ancillary Benefits, and How Do They Work?

Ancillary services can be employer-contributory (when the employer pays up to 100% of the premiums) or voluntary (when the employer contributes up to 49% of the premiums). On the employee’s side, the premium is simply deducted from the payroll.

The respective claim is submitted whenever employees use their ancillary benefits, and the money is paid to the beneficiary or the network-contracted provider.

Benefits of Ancillary Coverage to Employers

• Competitive edge: End-to-end ancillary coverage shows the company in the best light, helping to attract young talents and retain top-level workers.
• Higher morale: An employee motivated and satisfied at the workplace exhibits higher productivity, which benefits the company’s overall performance.

Ultimately, though, employer-contributory ancillary coverage improves employees’ quality of life, which never goes unnoticed in small and big businesses. All-encompassing ancillary service packages usually lead to an increase in the productivity and competence of the workforce.

ancillary service packages usually lead to an increase in the productivity and competence of the workforce.

Individual Ancillary Plans

There are individual ancillary plans for those willing to insure on an individual basis. Personal vision coverage, dental coverage, hospital indemnity plan, cancer indemnity plan, accident insurance, and other tailor-made types of coverage can help you protect yourself and your family against any adversity. 

Catering to your every need and whim, individual ancillary services may include flood insurance, fine art insurance, marine insurance, auto insurance, homeowner’s insurance, and even umbrella insurance.

The vast insurance market provides everything you need to feel secure and protected. Speaking of which, the top-five fastest-growing ancillary carriers in the U.S. are Delta Dental of Tennessee, Delta Dental of Indiana, EyeMed, Transamerica Life Insurance Company, and National Guardian Life Insurance Company.

The Bottom Line

No one has a crystal ball to predict the future, but we all know that unexpected events happen. It is up to everyone to take care of and protect our health and the health of our families, either through general health insurance or an extra insurance package.

There are no guarantees in life, so tip the probability scales in your favor through a thoughtfully chosen ancillary plan.