Enhancing Your Employee Benefits Program
Ancillary benefits are insurance/benefit plans that help round out the insurance component of an employee benefits program. Ancillary benefits include long term care insurance, short-term disability insurance and dental/vision coverage. These benefits can be offered on a voluntary basis (employee pays for the coverage), or employer funded (with substantial group pricing discounts). Some employers self insure these benefits internally, or utilize an outside administrator.
Employers should consider their ability to access network discounts for vision/dental and the inherent advantages of an outside administrator adjudicating claims (administrative efficiency, access to claim logic and a third party paying the claim instead of the employer) before determining whether they should internally administer the dental/vision and short term disability.
A few reasons why you may want to consider offering this coverage include:
Ancillary benefits are generally reasonably priced (either fully insured or to administer) because of the limited amount of coverage that they offer. In some instances the pricing differential between employer sponsored (and the requisite participation requirement) ancillary benefits and voluntary ancillary benefits is so substantial that an employer should strongly consider offering the coverage to optimize the value for the dollar. Adding an ancillary benefit can also make a major change in the Foundation benefit (medical insurance) more palatable to your employees.
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