A law enacted in 2010, the Affordable Care Act (ACA) provides qualifying individuals with subsidies in the form of premium tax credits when they purchase health insurance through marketplaces or exchanges.
Companies are advised to be aware that the ACA levies penalties on some employers whose employees receive subsidies — the exception being in situations where the employee portion of the premium falls under 9.83% of the employee’s current W2 wages from that employer.
Most traditional health insurance plans do not cover ancillary or secondary benefits. These can include medical expenses resulting from ambulance costs, hospital stays, related medical supplies, and dental, vision, and life insurance.
While not required, employers typically offer ancillary benefits to supplement group health insurance and cover these extra costs. This supplemental coverage is usually set up as voluntary or employer-contributory. In an employer-contributory setup, the employee pays 50% to 100% of the costs. Under a voluntary system, the employer pays 0 to 49% of ancillary benefits costs.
Ancillary benefits are paid for with pre-tax dollars and can also be used for preventative care.