Beyond health insurance benefits, many employers offer ancillary benefits in order to deliver a more robust benefits package. Employers either pay for or contribute to the cost of ancillary benefits. Common examples of ancillary benefits include dental, vision, group term life, disability insurance, and accident insurance.
Did you know...? What's considered "ancillary" may vary from employer to employer.
Dental insurance helps pay for dental care and usually includes regular checkups, cleanings, X-rays and services required to promote general good dental health. Some plans provide broader coverage than others, and some require a greater financial contribution from you when services are rendered. Some plans may even provide coverage for oral surgery, dental implants or orthodontia.
Vision insurance provides specific eye care benefits as defined in by the policy. Vision insurance policies typically cover routine eye exams and other procedures, and provide discounts or specified dollar amounts towards the purchase of eyeglasses and contact lenses. Some policies may even offer discounts on refractive surgery.
Group Term Life Insurance
Life insurance protects against financial hardship after the death of the insured by paying out a lump sum to beneficiaries upon the insured’s death. Term life insurance offers policies that cover a set period of time. Death benefits from all types of life insurance are generally free from income tax.
A beneficiary can be a:
- Entity (living trust, etc.)
Disability insurance protects the insured against major costs associated with disability. With disability insurance, you are awarded a disability benefit as a partial replacement of income lost due to illness or injury. There are two types of disability insurance: short-term and long-term.
- Short-term disability (STD) insurance—helps you remain financially stable if you become injured or ill and cannot work. Usually, STD coverage begins within 1 to 15 days of the event that caused your disability. The coverage allows you to continue to receive pay at a fixed weekly amount or a set percentage of your income. The benefits can last up to 52 weeks, although the amount of time you receive STD benefits varies between specific plans. When this STD coverage ends, long-term disability (LTD) coverage typically takes effect.
- Long-term disability (LTD) insurance—protects you should you become disabled for a prolonged period prior to retirement. LTD policies are often offered through employers as part of a standard benefits package. The length of LTD plans varies—some may be limited to a period between 2 and 10 years, while other plans continue paying out until you reach the age of 65.
Accident insurance can help protect you financially in case of an accidental injury. Accident insurance does not replace your medical insurance; instead, it offers additional coverage and financial assistance.
Regular medical insurance won’t cover all the expenses that result from injury—for example, you will likely still owe a deductible and copays—and accident insurance can help fill in those coverage gaps as you pay out-of-pocket medical bills. When you receive your accident insurance payment, you can use the money for any of your expenses such as rent or mortgage payment, groceries, transportation, child care or any other needs. The use of the money paid out following a claim is entirely up to you as you recover from your accident.
Some plans may also include accidental death and dismemberment (AD&D), which is sometimes available as an add-on to the accident insurance policy, although it is more commonly a separate plan altogether.
What does it cover?
Accident insurance will deliver a payment to you for various qualifying incidents, which may include the following:
- Injuries such as fractures, dislocations, burns, concussions, cuts and lacerations, eye injuries, coma, torn knee cartilage, broken tooth, ruptured disc and paralysis
- Medical services and treatments such as ambulance (ground and air), emergency care, non-emergency care, hospital (admission, confinement and inpatient rehab), intensive care unit confinement, physician follow-up, therapy services, medical testing (X-rays, MRIs and CT scans), medical appliances, inpatient and outpatient surgery, and blood and blood plasma
- Family lodging and travel needs related to an accident and follow-up care
What doesn't it cover?
Accident insurance will likely not cover an accident or injury under the following circumstances:
- Suicide attempt or intentionally self-inflicted wound
- Acts of war, declared or undeclared, or active military duty
- Natural disaster
- Non-prescription use of controlled substances or consumption of alcohol
- Participation in illegal activity
- Participation in a professional or semi-professional organized sport, or driving in a race, stunt show or speed test