In the war for talent, any additional benefit that you can offer your employees could make the difference between them staying on with you or moving to a competitor. It’s that simple.

Attracting, motivating, and retaining top talent is difficult today. Tomorrow it’s going to be even harder.

Like everyone else, you’re probably looking for ways to boost employee morale, get employees to be more engaged in their work, get them to commit more, and put in the extra hours to get a job done, to hit a target, or meet a deadline.

Well, you know what?

It’ll be a lot easier for them to do all of this and more if they had the peace of mind knowing that they have broad health insurance coverage including ancillary health insurance which can take care of most, if not all, expenses related to a medical incident.

This, alone, is a great reason for you to offer ancillary health insurance benefits to your employees.

But do you want another one?

Well, you might just be able to keep at bay, your well-funded, larger competitors who are offering ancillary insurance and are going to come after you to try and steal your employees.


Here’s what we’ll cover in this article.

  1. What is Ancillary Insurance?
  2. Ancillary Insurance Products
  3. Benefits of Ancillary Insurance
    • For employees
    • For employers
  4. Who pays?
  5. Key Takeaways

What is Ancillary Insurance?

Ancillary Insurance is supplementary health insurance that covers expenses not covered by standard health insurance policies.

Ancillary Insurance Products provide coverage for medical expenses related to eyecare/vision, dental/oral, life, etc.  Let’s look closely at some of these products.

Ancillary Insurance Products

Vision insurance

Vision insurance typically includes the cost of eyeglasses, contact lenses, eye surgeries, and visits to the eye doctor.

Dental insurance

Dental insurance generally covers oral exams at the dentist, teeth cleaning, X-rays, fillings, dental surgery, tooth extractions, root canals, crowns, etc. Additional coverage can also include orthodontics, dentures, etc.

Accident insurance

Accident insurance can sit on top of normal health insurance, and it could pay out a fixed amount to the insured in the event of an accident. Accident insurance can also cover medical expenses incurred because of the accident which are not covered by regular health insurance.

Group Life insurance

Group Life insurance provides financial security to the family of the insured in the event of the insured’s death.

Pet insurance

An increasing trend, especially amongst millennials is to buy Pet insurance. Pet insurance helps cover medical costs related to their pet’s health.


Other ancillary insurance products include disability income insurance, critical illness insurance, long-term care insurance, etc.

Benefits of Ancillary Insurance

For employees

  • Employees get the benefit of additional medical coverage to protect themselves and their families.
  • If employees contribute towards the ancillary insurance premium payments, this could reduce their taxable income.
  • Ancillary insurance can provide preventative care (eg annual eye check-ups or semi-annual dental check-ups). This prevents illness in the first place.

For employers

  • Healthy employees with peace of mind will focus more on their work, be more productive and be less likely to move to a competitor.
  • Companies that offer ancillary health insurance are more likely to attract talent. In some industries, ancillary benefits are a given and not even a point of discussion.
  • Employers can lower their costs by passing some of the costs on to employees on a voluntary basis. This makes it a win-win for both the employer and the employee.

Who pays?

There are two ways in which Ancillary Insurance benefits can be funded. These are referred to as “Voluntary” and “Employer-Contributory”.

  • With the Voluntary plans the employee pays up 100% of the premiums. But since the risk is spread across a large group of people, premiums can still be reasonable.
  • With Employer-Contributory, the employer typically pays between 50% and 100% of the premium with the employee paying the rest usually in the form of an automatic deduction from the paycheck.

Key Takeaways

  1. Ancillary Insurance is health insurance that supplements standard health insurance
  2. Ancillary Insurance can cover expenses related to vision, dental, ambulance, accident, critical care, long-term care, etc.
  3. A great way to attract and retain talent is by offering Ancillary benefits. In some industries these are seen as a “must have”.
  4. The two forms of funding ancillary insurance are “Voluntary” and “Employer-Contributory”. In Voluntary plans the employee pays 100% of the premium, while in Employer-Contributory plans the employer covers half to all of the premium.