Ancillary Health Insurance and Ancillary Benefits Explained
Ancillary insurance means “helpful addition, or supplement” to the Health insurance you already have.
All ACA compliant plans cover the fundamental elements of health coverage for the average American family. You will likely save thousands by having the ancillary insurance and benefits to cover additional expenses that often accompany most medical treatments.
We will look at some ancillary health insurance options in a moment, but first, we should ask ourselves a couple of questions. Why are insurance supplements necessary? Why aren’t they included in the main package?
The obvious answer is that if there were no limits to the services and medications in each plan included in the Affordable Care Act, the prices would be so unbelievably high that none of us could afford them.
The ACA defines a limited and specific set of services that include necessary preventive checks and in-patient care. The federal and state insurance premium and cost-sharing reductions to make these plans affordable. That standardization and security made it easier for companies to offer affordable health coverage.
To further protect yourself and your family from the expenses of full medical services, it is advisable to add additional coverage that enhances your protection. These plans are called ancillary insurance or supplemental insurance plans.
Ancillary plans fall into two categories: those that EXTEND the coverage of your existing health insurance and those that ADD services not mandated by the ACA to your current policy.
First, let’s look at plans that extend ACA coverage:
Ancillary Insurance Products that extend your health insurance coverage
Hospital Indemnity Insurance
ACA plans DO NOT COVER ALL THE EXPENSES of in-patient hospital treatment (illness or accident). The most common expense, residency costs. Your health insurance may not cover the full range of your stat. A hospital indemnity insurance plan helps pay for additional nights and may also cover loss of income.
Learn more at: Hospital Indemnity Insurance
Accidental Expense Insurance
Accidental Medical Expense insurance plans pay the high out-of-pocket medical bills following an accident. Even minor accidents can be surprisingly expensive. As with Hospital Indemnity insurance, this is a relatively inexpensive way of supplementing your core insurance.
Accidental Expense supplements can not be used as your ‘main’ insurance plans and are add-ons to your existing health insurance.
Learn more at: Accidental Expense Insurance
Critical Illness Insurance
Critical illness insurance provides additional coverage for medical emergencies like heart attacks, stroke, or cancer, or Serious illnesses that prevent you from working for a long time.
Because these emergencies or illnesses often incur higher than average medical costs, Critical illness policies pay out cash to cover those overruns where traditional health insurance may fall short.
Learn more at: Critical Illness Insurance
Disability Insurance Plans
Disability insurance replaces a portion of your monthly income if injury or illness prevents you from working. It provides financial security for you and your family, who depend on your ability to earn a paycheck.
The terms of these policies vary considerably.
There are two main types of disability insurance — short-term and long-term coverage. Both replace a portion of your monthly base salary up to a cap during your disability.
Buying your policy through TrueCoverage includes benefits not available from an employer-provided plan:
- Customize the coverage with extra features, such as annual cost-of-living adjustments
- Choose the insurance company with the best offerings
- Keep the coverage when you change jobs. Employer-paid coverage ends when you leave the company. (You might be able to take the coverage with you if you pay the full premium for disability insurance offered through the workplace.)
- Control the disability insurance. The coverage stays intact if you pay for it. But employer-sponsored coverage will end if the employer stops providing disability benefits.
- Collect benefits tax-free if you become disabled. If the employer pays for the coverage, you must pay taxes on the benefits.
Learn more at: Disability Insurance Plans
Cancer and Heart/Stroke Insurance
These are lump-sum policies that provide a cash benefit to help cover out-of-pocket medical expenses and daily expenses, so you can worry less about financial issues and stay focused on your recovery.
Heart disease and cancer are the leading causes of death and disability in the United States. (About Chronic Diseases | CDC) 6 out of 10 adults in the US have a chronic disease.
Learn more at: Cancer and Heart/Stroke Insurance
Ancillary Insurance to ADD to Your Health Insurance Coverage
Under the Affordable Care Act, dental care is treated differently for adults and children under 19. It is an essential benefit for children, meaning that if you’re getting health coverage for someone 18 or younger, dental coverage is available for your child either as part of a health plan or as a stand-alone plan.
NOTE: For competitive reasons, insurance companies RARELY include child dental services in their core health insurance plans.
For adults, dental coverage is NOT an essential health benefit. Thus it is a separate option available through the insurance marketplace.
Private dental insurance policies help many people budget for the cost of maintaining a great smile. Most dental policies are straightforward and specific regarding covered procedures and your out-of-pocket expenses.
- Dental Insurance covers services related to the teeth and gums, like preventive care such as annual cleanings.
- Not all procedures are covered; cosmetic procedures, such as crowns or whitening, are not.
- Deductibles, co-pays, and coinsurance will apply, and many policies have annual coverage maximums that are relatively low, ranging from $750 to $2,000.
Policies differ in which procedures are considered preventive, basic, and major. So it is crucial to understand what services are covered when comparing them. For example, some policies classify root canals as major procedures, while others treat them as basic and cover much more of the cost.
For more information: Affordable Dental Insurance | Buy Dental Insurance | TrueCoverage.
Vision insurance reduce your expenses for routine preventive eye care (eye exams) and prescription eyewear like eyeglasses and contact lenses.
Unlike health insurance policies that may provide unlimited benefits after the co-pays and deductibles are met, most vision insurance plans do not. They are discount plans or wellness benefit plans that provide definite services and discounts for the annual premium.
Vision insurance typically comes in a vision benefits package or a discount vision plan.
Vision benefits packages provide free eye care services and eyewear within fixed dollar amounts.
You’ll pay an annual premium or membership fee and a relatively small co-pay each time you access a service.
Discount vision plans provide eye care and eyewear at discounted rates after paying your annual premium or membership fee.
Both plan types may also have deductibles before the insurance benefits take effect.
Vision plans generally cover or provide discounts on these products and services:
- Annual eye examinations
- Eyeglass frames
- Eyeglass lenses (including lens coatings and enhancements)
- Contact lenses
- Discounted rates for LASIK and PRK
Learn more at: Affordable Vision Insurance | (trueCoverage.com)
A few things you need to know about Life Insurance:
- For the contract to be enforceable, the life insurance application must accurately disclose the insured’s past and current health conditions and high-risk activities.
- For a life insurance policy to remain in force, the policyholder must pay a single premium upfront or pay regular premiums.
- When the insured dies, the policy’s named beneficiaries will receive the policy’s face value or a death benefit. (as defined by the policy)
- Term life insurance policies expire after some years. Permanent life insurance policies remain active until the insured dies, stops paying premiums, or surrenders the policy.
- A life insurance policy is only as good as the financial strength of the company that issues it. State guaranty funds may pay claims if the issuer cannot.
- Term Life: Term life insurance lasts a specific number of years, then ends. Examples are 10, 20, or 30 years. The best term life insurance policies balance affordability with long-term financial strength.
- Increasing Term: The premiums are lower when you are younger and increase as you age. Also called “yearly renewable term insurance.”
- Permanent: This stays in force for the insureds’ entire life unless the policyholder stops paying the premiums or surrenders the policy. Typically more expensive than term.
- Single-Premium: Paid upfront. The policyholder pays the entire premium in advance instead of making monthly, quarterly, or annual payments.
- Whole-Life: A type of permanent life insurance that accumulates a cash value.
- Universal Life: A type of permanent life insurance with a cash value component that earns interest, universal life insurance premiums are comparable to term life insurance. Unlike term and whole life, the premiums and death benefit can be adjusted.
- Guaranteed Universal: A type of universal life insurance that does NOT build cash value and typically has premiums lower than whole life.
- Variable Universal: With variable universal life insurance, the policyholder may invest the policy’s cash value.
- Burial or Final Expense: A type of permanent life insurance with a small death benefit. Despite the name, beneficiaries can use the death benefit as they wish.
- Guaranteed Issue: A type of permanent life insurance available to people with medical issues that would typically make them uninsurable. Guaranteed issue life insurance will NOT pay a death benefit during the first two years the policy is in force (unless the death is accidental) due to the high risk of insuring the person.
Learn more at Compare Life Insurance Plans
Accidental Death and Dismemberment (AD&D)
Accidental death and dismemberment (AD&D) insurance is an add-on (a “rider”) to a health insurance or life insurance policy that covers the unintentional death or dismemberment of the insured.
Dismemberment includes the loss, or the loss of use, of body parts or functions like hearing, speech, sight. Usually, the AD&D policy pays a percentage for the loss of a limb, partial or permanent paralysis, or the loss of use of specific body parts or functions. The types and extent of injuries covered are defined by each insurer and policy, so understanding the specific details is important.
Typically, accidental death covers exceptional circumstances, such as exposure to the elements, traffic accidents, homicide, falls, drowning, and accidents involving heavy equipment.
AD&D riders are known as “double indemnity” riders, pay the designated beneficiaries benefits from both policies if the insured dies accidentally. NOTE: the benefits typically cannot exceed a specified amount.
TrueCoverage will work with you to ensure that you get the policy that best suits your needs.
Learn more at: Group Accidental Death or Dismemberment Insurance
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