Key takeaway

Medical insurance remains a cornerstone of employee benefits, but it cannot meet every employee’s needs. With healthcare costs continuing to rise and employees increasingly looking for benefits that are relevant to their individual circumstances, employers have an opportunity to think beyond simply expanding medical coverage. Ancillary benefits can broaden the value of a benefits programme, provide greater choice, and help employers use their benefits budget more strategically.

The benefits balancing act

Employee benefits have always involved a balance between what people value and what an organisation can sustainably provide. That balance is becoming more difficult as the cost of healthcare continues to rise.

WTW’s 2026 Global Medical Trends Survey projected medical costs in Singapore to increase by 16.9% in 2026, following a 15.5% increase in 2025. The continued double-digit trend reflects factors including an ageing population, increasing disease incidence, advances in treatments and pharmaceuticals, and rising healthcare operating costs.

For HR leaders, the implications go beyond the renewal premium. When medical costs rise significantly, there is naturally less room to keep expanding benefits in the same way year after year.

At the same time, employees are not necessarily looking for more of one particular benefit. Their priorities can differ considerably depending on age, family circumstances, financial situation and stage of life.

This creates a more complex question for employers: how do you continue to make your benefits programme more valuable when both costs and employee expectations are moving?

One answer is to look beyond medical insurance.

Medical coverage is essential. It just can’t cover everything.

Core medical insurance provides an important foundation for employee protection. However, it is primarily designed around healthcare costs arising from illness, treatment and hospitalisation.

The truth is, many of the needs employees experience sit outside that framework.

Dental and optical expenses are everyday healthcare costs. Health screening and preventive health programmes take a different approach by helping employees pay attention to their health before a problem becomes more serious. Mental health support, wellness programmes and financial wellbeing initiatives address other factors that can affect an employee’s health, financial security and ability to manage everyday life.

There are also additional forms of financial protection, such as personal accident or critical illness coverage, and benefits that respond to family or caregiving responsibilities.

These are broadly what we mean by ancillary benefits: benefits that complement an employer’s core insurance and healthcare provisions.

Their value is not simply that they add more items to a benefits package. They allow an employer to address a broader range of needs without expecting one benefit, particularly medical insurance, to do all the work.

The shift from coverage to choice

Another reason ancillary benefits deserve more attention is that employees increasingly want benefits that feel relevant to them.

Aon’s 2025 Global Benefits Trends Study found that 65% of employees would trade some of their existing benefits for greater choice, while 70% of multinational employers identified cost management as a top priority. The findings highlight a growing tension between employees’ desire for personalised benefits and employers’ need to manage the cost and complexity of benefits programmes.

The Singapore findings are particularly relevant. Aon’s 2025 Employee Benefits Survey found that medical coverage remains the benefit employees value most, while flexible benefits are also among the top five. Sixty-five percent of Singapore employees surveyed said they would sacrifice some existing benefit value for better choice.

That suggests the conversation is moving beyond simply asking whether a company offers benefits.

Employees are also asking whether those benefits are useful to them.

A young employee may place greater value on mental wellbeing or lifestyle benefits. A working parent may prioritise family-related support. Someone supporting ageing parents may have different financial and caregiving concerns. Another employee may simply value having dental or optical expenses covered.

The same benefits package can therefore have very different perceived value across the same workforce. Greater choice can help address that.

Making the benefits budget work harder

For an organisation managing its benefits budget carefully, the question is not simply whether a new benefit is affordable. It is whether the overall investment is being allocated in a way that creates meaningful value.

Ancillary benefits provide more options for doing that.

Some can be employer-funded. Others can be voluntary or employee-paid. Some may be insured, while others can be delivered through wellness providers, benefits partners, or a flexible benefits platform. An employer can also set a defined benefits allowance and give employees a choice of eligible benefits within that amount.

This creates room to direct resources towards areas where employees have genuine gaps.

For example, if employees consistently identify dental and optical expenses as a concern, addressing those needs may create greater perceived value than increasing a medical limit that few employees reach. Another workforce may place greater importance on mental wellbeing support, financial wellbeing or family-related benefits.

The right answer depends on the people the organisation employs.

That is why there is no universal list of ancillary benefits that every company should adopt. What works for a young technology company may not be what employees in a manufacturing business or a professional services firm value most.

The objective is to understand where the gaps are, and then decide how the benefits budget can address them.

Before introducing another benefit, HR can look at three things: what employees need, what the company is already providing, and where there is an opportunity to create more value.

Employee feedback can reveal what people actually want and which expenses they regularly manage themselves. Utilisation data can show which existing benefits employees use and which may be underutilised. Claims data can help identify where healthcare needs are concentrated.

The workforce itself also matters. Age profile, family status and life stage can all influence which benefits are relevant.

So do business priorities. Is the company trying to improve retention? Attract particular talent? Strengthen employee wellbeing? Manage rising benefits costs? Or make the existing programme easier to understand and use?

Looking at these factors together gives HR a stronger basis for deciding where ancillary benefits can make a meaningful difference.

It also changes the annual benefits conversation. Instead of asking only how much more to spend on medical insurance, employers can review the overall mix of benefits and consider whether the current allocation is still delivering the value employees and the business need.

There is a business case for supplemental benefits

The potential value of ancillary benefits extends beyond employee satisfaction.

Research from the Employee Benefit Research Institute (EBRI) provides some useful perspective. Its 2025 research into voluntary employee benefits found that 85% of organisations reported a positive impact on employee satisfaction from their benefits programmes. Nearly three-quarters reported positive effects on recruiting, retention and employee performance, while 70% reported an impact on employee health.

EBRI also found that employers offering a broader range of supplemental health coverage were more likely to report positive effects on retention and absenteeism.

The study illustrates a notable point: the potential role of supplemental benefits in the wider employee proposition. Benefits can have value beyond the individual claim or reimbursement when employees see them as useful support from their employer.

For smaller organisations competing for talent, that can be particularly important. You may not be able to match a multinational on the breadth of its benefits package, but you can be deliberate about what you offer and how well those benefits reflect the needs of your workforce.

Think in terms of a benefits portfolio

A useful way to approach ancillary benefits is to think of employee benefits as a portfolio rather than a single package.

Core insurance provides the foundation: medical, group life, personal accident and other essential protection.

Around that foundation, employers can address everyday health needs through benefits such as dental, optical and health screening. Wellbeing benefits can support mental, physical and financial wellbeing. Flexible benefits can give employees greater choice over which options are most relevant to them.

Not every organisation needs every layer.

The strength of the portfolio approach is that it allows HR to make deliberate decisions about where resources are best used, rather than adding benefits simply because they are popular or because another company offers them.

It also makes the programme easier to adapt. Employee demographics change, business priorities change and the healthcare environment changes. A benefits programme that made sense several years ago may not necessarily be the right one today.

Making flexibility practical

There is, however, an important operational consideration.

The more choice a benefits programme offers, the more important administration becomes. HR teams are already managing recruitment, payroll, employee relations and a range of other responsibilities. Giving employees greater flexibility should not mean creating another collection of spreadsheets and manual processes.

Technology can make that flexibility much easier to manage.

A digital benefits platform can give HR a central place to manage benefits while giving employees a simple way to understand what is available to them and access their benefits.

This is the thinking behind Cléma+, our digital flexible benefits management portal.

Cléma+ is designed to make flexible benefits accessible, affordable and simple to use for both HR and employees. It gives employers a practical way to manage additional benefits while giving employees a straightforward way to view and access what is available to them.

For HR, that means less complexity in managing a more flexible benefits programme. For employees, it means greater visibility and easier access to the benefits their employer provides.

Building a benefits strategy that works harder

The pressure on employee benefits is unlikely to ease. Medical costs remain a significant consideration, while employees increasingly expect benefits that recognise the different realities of their lives.

That makes it worth looking beyond a benefits strategy built primarily around expanding medical coverage.

Ancillary benefits give employers another way to broaden the support they provide, address gaps in existing coverage and offer greater choice. When they are designed around actual workforce needs and managed as part of the overall benefits budget, they can become an important component of a sustainable benefits strategy.

The question is not simply how many benefits an organisation can provide. It is whether the benefits portfolio is protecting what matters, addressing the gaps and giving employees meaningful value for the investment being made.

Ready to make your employee benefits smarter and more strategic?

Cléma Risk Solutions helps organisations review and build employee benefits programmes around their people, priorities and budgets. With Cléma+, companies can extend their benefits offering through a digital flexible benefits management portal that is accessible, affordable and simple to use for both HR teams and employees. It provides a practical way to introduce greater choice while keeping benefits administration manageable.

Explore Cléma+ and see how flexible benefits can work for your organisation.