Most employers would say their benefits package is competitive. For major medical coverage, they can be right, but ask those same employers when they last communicated about dental coverage, explained what short-term or long-term disability covers, or reminded employees that their vision plan includes an annual exam, and the answers get quieter.
Ancillary benefits (dental, vision, life, disability, supplemental coverage, and spending accounts) get listed in the enrollment packet, checked off the compliance list, and forgotten until the following year. That pattern costs employers.
Ancillary benefits are coverage that supplements primary group health insurance, such as dental, vision, life, and disability. Health savings accounts (HSAs) and flexible spending accounts (FSAs) also fall into this category, as do supplemental options like accident insurance, hospital indemnity, and critical illness coverage.
The term "ancillary" implies "secondary," and that framing may be the issue. These benefits are secondary in structure, not in importance. For many employees, a dental problem, an unexpected disability, or the sudden need for income protection is the moment they need their employer to have their back.
Employers invest real money in ancillary benefits, and a significant portion goes unrealized because employees don't know what they have or how to use it.
MetLife's 2024 Employee Benefit Trends Study shows 62% of employees are not completely confident they know about all the benefits offered to them, and 45% don't fully understand their benefits package. Those figures clearly describe the comprehension problem.
Employees miss routine exams, skip preventive care, go to the ER for basic health issues, and don't understand what their plan covers, and employers miss out on the return on benefits they've already paid for. The cost isn't only financial. MetLife's research shows that 76% of workers who understand their benefits report being happy at work, compared to just 47% of those who don't. Benefits comprehension connects directly to wellbeing, and wellbeing connects to retention.
Dental coverage provides access to preventive care (cleanings, exams, and x-rays), restorative procedures, and, in many plans, orthodontic work. Routine visits can also detect broader health issues early, including diabetes and cardiovascular risk markers. Offered by roughly 99% of employers that provide health benefits, dental benefits are nearly universal, yet utilization consistently lags behind enrollment.
Vision coverage includes annual exams and access to prescription eyewear. Beyond updating a prescription, an exam can identify glaucoma, hypertension, and other systemic conditions early, a strong case for using this benefit every year.
Life insurance provides financial protection for an employee's family. Offered by 6 in 10 private-sector employers, group life insurance includes guaranteed issue amounts that don't require medical underwriting, a benefit employees may not know they can access.
Disability insurance replaces income when an employee can't work due to injury or illness. Many employees assume workers' compensation or government programs would cover them. Often, that assumption is wrong, and a clear explanation during enrollment could change how they value this coverage.
HSAs and FSAs allow employees to set aside pre-tax dollars to cover out-of-pocket health expenses, easing the financial gap that major medical doesn't fill. Accident insurance, critical illness, and hospital indemnity plans work similarly, providing lump-sum or fixed payments when an employee faces an unexpected health event. For employees carrying high-deductible plans or living paycheck to paycheck, that protection matters, but only if they understand it's available and what triggers a payment.
Four out of five employees say they would prefer new benefits or perks to a pay raise, and half say they would feel more valued if their employer improved benefits communications. Employees feel rewarded just by being better informed about what already exists.
The data makes the return concrete. HSA participation jumps from 15% among employees who haven't received benefits education to 44% among those who have. Better education drives better behavior, which in turn drives health outcomes and cost management.
Ancillary benefits need the same attention employers give to major medical: year-round communication, plain-language explanations, and resources that help employees make good decisions year-round.
A few places to start:
The benefits are already there. The question is whether employees know it.
Content provided by Q4intelligence
Photo by zimmytws