Normal health insurance policies may not cover certain miscellaneous medical expenses that you may be required to pay if you are admitted to the hospital. Ancillary benefits provide added benefits within the health insurance coverage for such varied hospital expenses, such as blood, medical supplies and other facilities.
Here, the term ancillary benefits are related to health insurance policies and the coverages they offer. Read on to learn more.
What are ancillary benefits?
Ancillary benefits are considered under health insurance coverage offering additional financial support for miscellaneous hospital expenses over and above the aspects covered by health insurance. It includes blood, transportation via ambulance, medical supplies and drugs. These benefits are added to the health insurance policy you pay for and are usually purchased along with it.
Studies have shown that these additional benefits act as preventive healthcare measures that can reduce medical costs in the long term.
Understanding ancillary benefits
Many people are either not aware that health insurance policies don’t cover many additional expenses that are usually a part of healthcare costs or neglect them. Ancillary benefits ensure that all costs are covered within the policies.
The policy for ancillary benefits will normally be quoted as a multiple of the daily benefits provided by the hospital. For instance, if the daily benefits provided by the hospital is ‘x’, the ancillary policy will be for 10x or 20x.
For companies, it makes sense to offer their employees these benefits within the policies. Keeping employees healthy is in the best interests of companies. Regular health insurance plans don’t cut it when it comes to covering vision and oral care.
Contributions from employer and employee
Contributions for ancillary benefits come either from the employee on a voluntary basis or from the employer. If the employee is paying the contributions voluntarily, the employer may offer between zero to 49% of the ancillary benefit premiums. If the employer is paying the contribution, the employer usually offers between 50% and 100% of the premiums.
Employees have to pay the balance contribution after the employer pays their share of the premium. This is usually deducted from the employees’ monthly payroll. A claim is submitted when an employee uses the benefits available to them. The benefits are paid to the member or the provider as the case may be.
What benefits do employers get from ancillary benefits?
Here is a list of what employers stand to gain from these benefits:
- It improves the reputation of the employer among employees of the organization.
- Section 125 allows employees to pay pre-tax contributions towards policies of these benefits. Employers can take advantage of this and reduce their FICA contributions.
- Companies can use pre-tax dollars to pay for these policies.
- It helps employees lead better-quality lives which will, in turn, make them more productive and efficient at work.
- Employees get a lot of security and peace of mind when their employer offers ancillary benefits which then helps the company.
- It makes the company more competitive as an employer.
- The policy premiums are lower when the risk is spread out among a large number of people.
- It helps employees get preventive care and not just healthcare when they develop a health problem.
