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Ancillary Benefits (Dental,Vision, Group Life)

Dental and vision insurance are the mainstream of ancillary benefits and for good reason. These benefits lead to healthier employees and greater productivity. We are seeing the out of pocket expenses increasing for policy holders of traditional PPOs and HMOs. And Consumer Driven Health Plans (CDHP) are increasing in popularity. A well thought out ancillary package can help direct some of the premium dollars being save to improve the overall quality of the benefit package. The ancillary benefits packages that are being offered by the insurance companies are becomingly increasing flexible in the way they let employers choose how to apply them. The insurance industry has also done a very good job at simplifying the management of these packages.


Traditional Method:

Employer provides specific benefits and pays most or all the premium. The trend has been to transfer increasingly larger share of the costs onto the employee through payroll deduction. Personal responsibility is a major component of modern benefit packages. The major drawback to the traditional method is that it limits the employee’s ability to make chooses on how their benefit dollars are being spent.


Defined Benefit:
The employer contributes a set amount to the benefit package. The employees choose which benefits that they are interested in and pay any differences through payroll deduction. Using a define contribution method the employer has a lot of flexibility in the manner that they set up the benefit package. When the employees have a good understanding of the benefits being offered and have the freedom to choose what is best for them, they have a tendency to appreciate the value of what you are offering them. They also have the tendency of using the benefit dollars wisely.


Voluntary: The employer is offering the benefits on a completely voluntary manner. Many of the benefits are the same as the ones in a define benefit program. Frequently the same ancillary insurance program is being used. The advantage of these programs is that the employee can use the savings from choosing a less expensive health insurance plan to buy an ancillary product that fits their needs.


Below is a selection of insurance companies that offer ancillary benefits. The health insurance companies offer a range of ancillary benefits as well. Each company has unique qualities that enable it to excel in certain niches. The common theme is ease of administration. A well thought out benefit program provides your employees with the choice of the benefits that they need. The benefit program should be easy to understand and be able to be managed with a minimum of effort. Part of the process of developing a high quality benefit program is to be aware of how using pre-tax dollars affects the final cost of your program.

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