Broker Check

Why You should Offer Ancillary Benefits to Employees

| October 02, 2023


       Ancillary benefits can be a great offering to your employees. These benefits can have an employer contribution, but it is not required. In fact, one of the benefits to offering ancillary benefits for your employees is that when their premiums are deducted from the employee’s paycheck, they are made with pre-tax dollars, so long you have a Section 125 Plan set up. The employers also have the possibility of reducing expenses and/or their tax liability. To learn more about the tax benefits of offering ancillary benefits to your workforce, speak with your CPA or accountant. Although the monetary value is great, what the employees really appreciate are the benefits that they may not have access to otherwise. 

Examples of Ancillary benefits      

       Short-term and long-term disability are two of the most important plans that an individual can have access to through their employer. When looking at a disability policy and seeing if it’s right for you, I suggest asking yourself, “ If I can’t go to work, how will I pay the bills?”.  Disability policies pay the insured once the conditions of eligibility for benefits agreed in their policy are met. From this point on, payments are made for the agreed upon term/period, whether it’s a couple of months or until a maximum attained age.  

      Hospital Indemnity policies pay a fixed benefit amount for each day or event of hospitalization for an employee who has been injured or who has become ill. These policies help cover costs that are not covered by health insurance. Funds can be used for any of the medical expenses whether they’re for copays, coinsurance, deductibles, transportation, prescription drugs, and childcare. Other policies may have more comprehensive benefits. To find out more about your policy if you already have one, call us.   

      Cancer policies can help you medically and non-medically if an individual is diagnosed with cancer. Once diagnosed, they receive a lump sum benefit. The funds can help with your monthly bills or medical expenses. The purpose of these policies is to allow you to focus more on your health and less on your monthly bills.  

      Critical illness polies can be a valuable employee benefit. Like a cancer policy, these insurance policies are meant to help financially for unexpected medical emergencies, if you experience medical conditions such as a heart attack, stroke, organ transplants, coronary surgery, or cancer. Once diagnosed and conditions for eligibility of the policy benefits are met, the insured is paid a lump sum benefit to help offset the costs of the medical treatment and/or personal expenses.  

      Dental and vision plans are very popular for employees. Dental and vision insurance can help you with major problems with your teeth or eyes, but also cover basic care and office visits. So, even if you don’t have bad teeth or eyes, getting them checked regularly could possibly help maintain oral and overall health. 

     Ancillary benefits are a great way for an employer to offer added value to their employees without necessarily incurring in additional contributions. Although, if employers choose to contribute, the benefit package may become even more attractive.