Ancillary benefits are becoming essential for attracting and retaining top talent. In today’s competitive job market, it’s no longer enough to offer basic health insurance alone. Read on to learn what ancillary insurance includes, how it works, and why your company should consider adding it to your benefits package.
Ancillary insurance is a secondary type of healthcare coverage that supplements traditional medical benefits. These plans often cover expenses that fall outside of standard health insurance and offer more comprehensive support for employees’ health and well-being.
As ancillary benefits become more widespread, they’re playing a key role in helping organizations meet employee expectations—especially in competitive hiring markets.
Ancillary benefits can be structured in two primary ways: voluntary or employer-contributory.
Voluntary Benefits
Voluntary benefits are optional plans made available to employees without direct employer funding. Employees pay the full premium cost through payroll deductions, though employers may contribute a small portion if they choose.
Example:
An organization may offer voluntary life insurance in addition to core benefits. While the company covers primary health, dental, vision, and basic life insurance, employees who opt into voluntary life coverage would pay for it entirely out of pocket.
Employer Contribution Benefits
With employer-contributory benefits, the employer covers a majority of the premium cost. Employees pay the remaining portion, typically deducted from each pay period.
This model often applies to more comprehensive benefit plans, and helps reduce employee financial burden while enhancing perceived value.
Ancillary insurance can include a wide range of additional coverage options. Common examples include:
These benefits help fill important gaps left by standard health insurance policies, offering more robust protection for employees.
Ancillary or fringe benefits support your workforce in meaningful ways—and in turn, support your business. Here's how:
1. Attract and Retain Top Talent
Top candidates are looking for more than just health insurance. They expect dental, vision, and life insurance, plus other fringe benefits. Ancillary offerings can make the difference when a candidate is choosing between you and a competitor.
2. Cover Common Medical Gaps
Ancillary insurance helps bridge these gaps, improving overall care and financial protection for employees.
3. Offer Peace of Mind with Life Insurance
Life insurance is a crucial benefit—especially for employees with families. Since many health plans don’t include it, offering life coverage through ancillary benefits adds significant value and peace of mind.
4. Support Employee Satisfaction and Retention
Employees want to feel cared for. Providing ancillary benefits sends a strong message that you prioritize employee well-being, which builds loyalty and improves retention.
5. Keep Costs Down with Voluntary Options
Want to offer more without straining your budget? Voluntary plans allow employees to choose what they want while keeping employer contributions minimal. It’s a win-win.
6. Strengthen Your Hiring Process
Offering a modern, comprehensive benefits package signals to candidates that your company is competitive, progressive, and people-focused. This strengthens your employer brand and gives you an edge in recruitment.