Secondary or ancillary health insurance programs can be difficult enough to apprehend on one’s own, adding it to the insurance coverage already provided by employers. It may be more of an issue when it comes to describing the need for it, or use of it to other family members, and to a business or life partner. The latter may be less aware of the implications, or not as careful in understanding its application to their situation. The most common examples of this include the following benefits:
Benefits for Fuller Coverage
Family members may not comprehend what ancillary means in health insurance, or what is likely needed to provide miscellaneous benefits not made part of a standard insurance package. In several cases, traditional primary plans may not even define the additional coverage as insurable, as it may involve too much overhead or too little profit to be included. This means the plan may differ from the main plan, or have customized features and limits that the partner has not expected. Because of this, those limitations of the ancillary plan should be reviewed by the partner and extended family so each party knows where the desired benefits begin and end.
The typical array of ancillary services covered by the policy may include items ranging from dental and vision coverage, life insurance, coverage for unexpected accidents or illness, pet insurance, wellness, and other areas. These features may be a way for employers to attract younger or Millenial workers, who are increasingly interested in being supported by those categories of coverage. As per the Affordable Care Act, adding an ancillary plan can also make the benefits more compliant with current health regulations, which have trended towards requiring insurance packages to provide more coverage.
Benefits for Well-being
Wellness benefits are a popular option for both companies and employees in supplemental plans, as they can be advantageous to both parties. These benefits may include free or subsidized gym memberships, smoking cessation programs, free medical exams, flu shots, and other benefits. In addition, combined with lifestyle best practices like good nutrition or weight loss, taking healthy supplements, etc., these strategies can improve the health of employees, reducing health care expenses and premiums.
Benefits for Disability
Both the primary account holder and extended family should be made aware that ancillary insurance plans provide expanded coverage of disability benefits for injured employees. Insurance industry researcher Isabella Robinson notes that “according to the Bureau of Labor Statistics, 42 percent of workers in private industry had access to short-term disability insurance plans offered to them by their employers in 2018. About 34% had access to long-term disability insurance plans sponsored by their employers. Group disability insurance is often provided by employers. BLS reports that in 2018, 85 percent of short-term disability coverage was paid by private employers, while 94 percent paid full price for long-term coverage.”
Benefits for Reduced Costs
Partners and family should also understand how ancillary coverage serves as a secondary type of health and life insurance coverage when traditional health insurance doesn’t cover things such as deductibles, co-pays, or out-of-pocket expenses. Ancillary benefits can reduce insurance financial burdens, depending on the package. With traditional life insurance, one size does not fit all, and that’s where riders come in. The term riders are actually interchangeable with ancillary benefits in the life insurance industry. Riders are essentially additional benefits added to an insurance policy that often requires an additional premium payment. Adding a separate ancillary plan can thus be less expensive than adjusting an existing main plan. In this way, one can customize an insurance policy to address specific concerns.
Benefits for Long-Term Care
Many ancillary plans provide longer-term or home-based care services. Extended family under the plan should know about this, to review the best service choices available in this area that can be covered. Long-term care insurance is intended to cover long-term services and supports at a fixed daily or monthly cost, such as a stay in a nursing home, assisted living facility, hospice, or home health care services. In addition, long-term care insurance reimburses policyholders for a daily or monthly cost (up to a certain maximum) for assistance with activities of daily living, such as bathing, dressing, and eating.
Benefits of Unexpected Expenses
Supplement programs give peace of mind to those covered under them, and mitigate concerns over unanticipated costs and payment arrangements. Ancillary benefits provide secondary health insurance coverage that covers miscellaneous medical expenses. These additional benefits can protect one from unexpected expenses that can be incurred during hospital stays. In other words, they can cover additional or related 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 through the same policy and insurance carrier.
Ancillary health insurance premiums are often paid by both the employee and the company. Certain ancillary benefits may be selected and paid for by the employee. However, others may be wholly or partially funded by the company. If the employer contributes to the cost of an ancillary benefit, they will usually pay at least half of the premium for such coverage. The remaining portion is usually funded through an employee payroll deduction. When the employees need to use the auxiliary benefits a claim is submitted directly to the insurance provider. In the event of a life insurance benefit payout, the employee’s policy beneficiary is usually paid directly.
Overall, going over these considerations can help all those included in a plan to be more mindful of what does ancillary means in health insurance. Be it primary or secondary coverage, users (including family and partners) need to know in what manner, to what extent the benefits will be provided, and how completely the services will be paid for. This understanding will minimize policyholders making claims that are not actually covered under the plan, and modify what lifestyle activity can be managed by the primary or ancillary policy.