Guide to Supplemental Health Insurance and Employee Benefits – Forbes Advisor

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Employers typically provide health insurance as a workplace benefit, but they also provide supplemental health insurance that goes beyond standard health insurance coverage.

These programs may offer dental, vision, life, disability, or other types of coverage that are often low-cost or no-cost to employees.

What is supplementary health insurance?

Supplemental health insurance covers you beyond a regular health insurance plan and is often part of an employer’s benefits package.

A health insurance plan provides crucial coverage for some of the most important and expensive types of medical care, but may not cover you for dental or vision care. Health insurance also does not help if you become disabled and cannot work. It also does not provide funds if you suffer from a serious illness.

This is where ancillary insurance programs like dental insurance, vision coverage, disability insurance, and critical illness insurance come in handy.

You can also purchase these types of insurance directly from the company through an individual plan.

What does supplementary health insurance generally cover?

Employers can offer several types of supplementary insurance. These types can supplement health insurance coverage and may be offered by an employer or you can purchase directly from the company, but likely at a higher cost.

Additional plans include:

Dental insurance

Dental insurance is a type of supplemental health insurance that is standard in many workplaces. A typical plan covers some or all of the cost of preventive care and at least some of the cost of more expensive care, such as crowns, root canals, and oral surgery.

Dental insurance policies vary, but they generally cover:

  • 100% of current and preventive services: These dental services include dental x-rays, dental exams, tooth cleanings, fluoride treatments, and dental sealants.
  • 80% of basic services: Basic services may include simple dental fillings and extractions.
  • 50% of major services: Dental plans may not cover major services at the same level as basic and preventive services. Major services may include root canals, dental bridges, crowns and implants, orthodontics and non-cosmetic veneers as needed.

Dental plans often don’t cover cosmetic procedures, such as veneers.

vision insurance

Some health insurance plans include vision coverage, but you can also purchase separate vision insurance.

This type of insurance can cover eye exams, the fitting of contact lenses and glasses, as well as the cost of these visual aids themselves. These plans can sometimes offer discounts for corrective vision surgeries.

Disability insurance

Employers often provide employee disability insurance to protect workers who get injured or sick and can’t work. This type of insurance can help cover part or all of your salary until you can work again.

Employers can offer short-term or long-term policies or both. The difference between short term and long term is the length of coverage. Short-term disability insurance can cover you for three to six months, while long-term disability insurance can help you for years if you are unable to work.

Life insurance

Life insurance is another common perk offered by employers that generally does not require a medical exam to qualify.

These group plans are usually job-related, so you lose your coverage when you quit your job. These policies also typically have low death benefits. For these reasons, you should not rely solely on an employer’s life insurance policy.

Instead, you should think of it as supplemental coverage for individual life insurance policies like term life, whole life, and universal life.

Accident insurance

This coverage pays a lump sum if you have a specific type of injury resulting from an accident. Injuries covered typically include things like burns, deep cuts, and dislocations.

You can use this coverage to pay for expenses not covered by health insurance, such as out-of-pocket expenses such as deductibles and ambulance services. But you can also use the money for any reason, including paying your rent or shopping for groceries.

You may also have access to accidental death and dismemberment insurance through your employer. This coverage will pay if you are killed in an accident or lose a limb or function, including hearing, speech and sight, in an accident.

An AD&D policy pays out a lump sum if you die in an accident or suffer a serious injury. Specific injuries eligible for payment will be listed in the policy.

Critical illness insurance

This type of coverage comes into play if you are diagnosed with an illness listed in the policy. Illnesses eligible for this coverage are generally serious, such as:

  • Cancer, although it may be limited to a life-threatening diagnosis
  • End-stage renal failure
  • Heart attack
  • Major organ transplant
  • Multiple sclerosis
  • Parkinson’s disease
  • Stroke

As with accident insurance, people typically use these funds from a critical illness insurance payment to pay for expenses not covered by their health insurance, such as deductibles or the cost of travel to a medical facility in a location. distant. But you can use the lump sum payment for any reason, including to pay your mortgage.

Animal insurance

Employer benefits can go beyond helping humans. An example is pet insurance.

Pet insurance usually covers costs, such as examination fees, tests, and emergency care. It can also help with things like medication and surgery.

Pet insurance plans generally come in three varieties:

  • Accident and sickness plans: Covers injuries or illnesses, such as broken bones, cancer and hereditary diseases
  • Plans in the event of an accident only: Only covers issues related to an accident, such as a broken bone.
  • Wellness plans for routine care: Only covers routine care like wellness visits and vaccinations

As with virtually all coverage on this list, individuals can instead purchase pet insurance separate from their employer. But going through the work plan might get you a better rate.

How does supplementary health insurance work?

Each insurance company has its own rule on how supplementary health insurance works. Some types of ancillary policies, such as critical illness insurance and accident insurance, pay a lump sum to the policyholder. This money can be used in any way.

Other types of ancillary benefits work much like a standard health insurance policy. For example, if you need dental care and you have dental insurance, your plan covers a percentage of your costs, just like a health insurance plan covers a percentage of your health care costs.

However, this type of additional coverage is often limited. Many dental insurance plans pay for most of the tab for routine dental exams, but if you need a root canal, you’re probably paying for a significant portion of the procedure yourself.

Ancillary benefits payable by the employer vs. voluntary ancillary benefits

Some companies cover part or even all of the cost of supplemental coverage. This is called an employer-paid ancillary benefit — your employer pays 50% to 100% of the premium.

But other companies require employees to pay all or most of the cost of perquisites, which is called a voluntary perquisite. In this case, your employer contributes from zero to 40%. It can still be a good deal for workers, however, because buying this type of insurance through an employer allows you to purchase a group insurance plan, which is almost always cheaper than the purchasing coverage as an individual.

If you are responsible for some or all of the premium associated with perquisites, the money will usually come out of your paycheck as a payroll deduction. The money is usually withdrawn pre-tax, giving you another saving.

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