Ancillary Insurance //
Ancillary insurance is most often seen in the context of group health insurance plans in which it refers to a type of insurance coverage other than the usual health insurance coverage. Thus the ancillary insurance is of secondary concern to the main policy – the health insurance – however, it provides valuable additional coverage. Indeed though ancillary insurance is by definition not the primary insurance being sought, it is nevertheless highly valuable and desirable in many cases.
Why Does Ancillary Insurance Matter?
Ancillary insurance is important because it provides coverage for things that are still very important to an employee’s overall health, but which aren’t covered by the main plan. Adding these types of coverage to the plan enable the employee to get the coverage at a much lower rate than they would be able to get if they acquired the various types of ancillary coverage separately. As a result this helps protect the employee’s overall well-being and reflects positively on the employer offering these benefits. This in turn will help earn the company a good name in the industry for providing these benefits and will make it a more desirable place to work.
What Is Often Covered As Ancillary Insurance?
The following types of insurance are often covered as additional ancillary insurance attached to the main policy:
- Dental Insurance
- Vision Insurance
- Life Insurance
- Short Term Disability
- Long Term Disability
How Is Ancillary Insurance Paid For?
Ancillary insurance is typically paid for in similar ways as regular group health insurance coverage. The employer may pay for all or part of the coverage. It is not uncommon for ancillary insurance to be treated differently in terms of who pays for what. In some cases the employer may pay for all of the health insurance, but require the employee to pay for half of the ancillary insurance. Alternatively the employer may pay for half of the health insurance and require the employee to pay for all of the additional ancillary insurance. Just about any configuration could be possible, but regardless of who pays it is generally less expensive to get the coverage offered by ancillary insurance this way, than it would be for the employee to purchase it separately on their own.
Why Is Ancillary Insurance More Affordable?
Ancillary insurance as part of a main policy like a health insurance policy is less expensive for the usual reasons relating to a greater diffusion of risk on the part of the insurance company. This lower risk on an individual basis allows the insurance company to offer the coverage at a lower cost. Another factor which makes ancillary insurance more affordable is that if the employee is responsible for all or part of the payment they can often make the payment with pre-tax money, thereby reducing their taxable income.
What Ancillary Insurance Is Right For My Company?
Understand ancillary insurance and determining what your company needs can be a very daunting prospect for people who are not familiar and well-versed in insurance. That is why Beaty Insurance is always on hand to discuss your ancillary insurance options with you and help you determine what type of coverage is the best fit for your company. Please contact us for more information.