Affordable

Ancillary benefits have the advantage of being affordable

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Purchasing these benefits at a group level is more affordable than if purchased on an individual basis. Cost is limited for three reasons:

As group insurance products, the risk is spread through a large population, which keeps premiums reasonably priced.

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If your business takes advantage of Section 125 of the IRS code and establishes a cafeteria plan, premiums can be paid with pre-tax dollars.

The cost can either be completely covered by the employer or shared with the employees by arranging an employer-employee split.

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effect

There are two ways ancillary benefits can be funded: voluntary or employer-contributory. On employer-contributory ancillary benefits, the employer usually pays 50 to 100 percent of the premiums. On voluntary plans, the employer may contribute 0 to 49 percent of the premiums.

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Through payroll deduction, employees pay whatever portion of the premiums that the employer does not cover. Then when an employee uses their benefits, a claim is submitted and benefits are paid directly to the network-contracted provider or to the member (if a network provider is not used).

 

For life insurance claims, the beneficiary is paid directly (in the event of a death).

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employer

Benefits to Employers

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Lower employer FICA contributions if your business takes advantage of IRC Section 125 so that employees can use pre-tax dollars for these benefits

The value of ancillary benefits is high among employees and would enhance the employer’s reputation among employees.

Offering ancillary benefits make your business more competitive in the employment marketplace. With them, you can compete with other employers who may already provide these value-added benefits.

Employers do not pay for voluntary ancillary benefits or can share the cost with employees to keep costs down while pleasing employees.

These employee benefit programs and plans may have associated administrative costs and are subject to legal requirements. Before establishing a cafeteria, plan or offering ancillary benefits to your employees, you should consult with your own legal and tax advisors.

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employee

Benefits to Employees

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They can use pre-tax dollars to pay for ancillary benefits, thus lowering their taxable income.

The cost is affordable. Risk is spread amont a large group of people to keep the premiums reasonable.

Ancillary products respond to workers’ needs to access important benefits, such as dental insurance, vision insurance and group term life insurance, disability insurance, long term care insurance

With ancillary dental and vision benefits, workers can get preventative care, not just care when a problem develops.

They can enjoy the peace of mind and security that comes with ancillary benefits and group insurance.

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