Extended health benefits: Overview, definition, and example
What are extended health benefits?
Extended health benefits are additional healthcare coverages provided by an employer or insurance provider that go beyond basic or government-sponsored healthcare plans. These benefits typically include coverage for services not included in the standard health insurance, such as dental care, vision care, prescription drugs, mental health services, physiotherapy, and other treatments or services that help with overall health and wellness. Extended health benefits are often offered as part of employee benefit packages and can vary significantly based on the employer, insurance provider, or the specific plan.
For example, in many employer-sponsored healthcare plans, basic medical care like hospital stays and physician visits are covered by the government or a national insurance program, while extended health benefits may cover things like dental cleanings, eye exams, and prescription medications.
Why are extended health benefits important?
Extended health benefits are important because they provide comprehensive healthcare coverage that fills gaps not covered by basic health plans. These benefits help employees or individuals access a broader range of medical services, leading to better overall health outcomes. For employers, offering extended health benefits is a way to attract and retain employees by providing additional support for their health and well-being. For individuals, extended health benefits help reduce out-of-pocket expenses for health-related services, ensuring they have access to necessary treatments that may otherwise be unaffordable.
For businesses, offering these benefits can increase employee satisfaction, reduce absenteeism, and improve productivity by ensuring that employees are healthy and able to work. For employees, it helps them maintain good health without bearing the full cost of care.
Understanding extended health benefits through an example
Imagine a company, ABC Corp., offers its employees extended health benefits as part of their overall compensation package. In addition to basic healthcare coverage, the employees are provided with coverage for dental checkups, prescription medications, and vision care, such as eye exams and glasses. For example, if an employee needs glasses, the extended health benefits would help cover part or all of the cost, reducing their out-of-pocket expenses.
In another example, an individual has a basic government health insurance plan, but they also purchase extended health benefits through their employer. These benefits may cover services like physiotherapy for an injury, mental health counseling sessions, and massage therapy — all of which are not covered under their basic plan.
An example of an "extended health benefits" clause
Here’s how an extended health benefits clause might appear in an employment contract:
“The Employer will provide the Employee with extended health benefits, including but not limited to dental, vision, and prescription drug coverage. The Employee will be eligible to enroll in the extended health benefits plan on the first day of the month following the completion of three months of employment, subject to the terms of the Employer's health plan.”
Conclusion
Extended health benefits offer additional coverage for healthcare services that go beyond the basic medical care provided by government programs or primary health insurance plans. These benefits play a crucial role in ensuring that employees or individuals have access to a full range of healthcare services, from dental and vision care to prescription drugs and mental health support. For employers, offering extended health benefits is an effective way to support employee well-being and improve workplace satisfaction, while for employees, these benefits reduce the financial burden of healthcare expenses and contribute to better overall health outcomes.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.