Group Insurance and Benefits in Canada
Life Guard Insurance and The Benefit Specialists Corp. (TBSC) in Canada have partnered together to offer you the best employee group insurance options for your business. Through the many brokerage relationships The Benefit Specialists Corp. has with all the major insurance companies offering group insurance plans, and their over 50 years experience in the industry, they are Life Guard Insurance’s chosen group insurance provider.
At present, The Benefit Specialists Corp. handles over 200 group insurance plans for small and medium sized business in Canada and across Alberta. They are able to shop the entire group insurance marketplace to find the best group insurance plan to meet the needs of your business. Group insurance or an employee benefits plan can be handled all by one insurance company, or more likely it is a combination of different coverage options underwritten by different group insurance carriers. A specialized plan like this needs expertise to design and set up to ultimately save your company money. This is where The Benefit Specialists Corp. has the experience needed to shop and build a plan for you.
Also see our additional group insurance pages on:
- Workplace Financial Education Seminars
- Executive and Management Disability Insurance Top-Ups
- Cost Plus or Private Health Spending Plans (PHSPs)
The types of Group Insurance benefits you can build into your plan:
- Group Prescription Drug Plan
- Group Dental Insurance
- Group Extended Medical Insurance
- Group Short-Term Disability Insurance
- Group Long-Term Disability Insurance
- Group Life Insurance
- Group Accidental Death & Dismemberment Insurance
- Group Critical Illness Insurance
- Group Spousal & Dependant Life and Critical Illness Insurance
- Health Spending Accounts
Along with dental and extended medical insurance, group prescription drug plans are often a cornerstone of any group insurance plan. Employees come to expect their insurance package to include a healthy amount of drug coverage if and when they need to fill a prescription. Designing such a plan can be complex, as you know that almost all your business’s employees will use this plan regularly.
The most expensive plan to your company would be to cover 100% of all drug costs with no annual limit for usage. This sort of plan can easily be abused. In order to control premiums to the company, here are the options you might use to limit expenses:
- Have an annual maximum amount of prescription drugs covered, like $2,000 per year per employee or family member.
- Have a health co-pay feature, where the employee covers the first 20 or 30% of the cost before the plan covers the bulk of the drug bill.
- Have an annual deductible, like $50 or $75 where the employee must pay this out of pocket first before the drug plan starts reimbursing expenses.
- Use of generic versions of brand name drugs is mandatory or only the cost of the generic equivalent is covered.
- Or any combination of the above options.
Once you have found a design that both you and your employees feel is fair and controls costs, then you can build that prescription drug plan design into your complete group insurance plan.
Group Dental Insurance can be one of the most costly pieces of your group insurance plan. If this is a new group insurance plan, and employees have not had coverage for dental work previously, there might be a lot of pent-up demand for dental visits. This could result in a spike in claims in the first year, pushing up your premiums for the second year renewal of your plan.
In order to offer a good level of dental insurance benefits, and keep costs under control, here are some of your options in plan design:
- Set an annual maximum for the first year of eligibility for employees, and have this increase for the second and subsequent years.
- Have a health co-pay feature, so employees must pay for 10% or 20% of their dental costs themselves.
- Have a lower level of coverage for restorative dental, like crowns, bridges, onlays, etc. Maybe only 50% of these costs are covered.
Any of these options or a combination of them might help control claims and still offer employees excellent dental insurance coverage.
This covers everything else that is not already included in the Alberta Health & Wellness Insurance plan. Things like ambulance rides, in home nursing care, medical equipment like wheelchairs, canes, wigs, prosthetics, etc. and supplementary medical services, like chiropractors, massage therapists, psychologists or psychiatrists, orthotics, speech therapists, etc. would all fall under the Extended Medical Insurance plan.
Even though extended medical insurance is widely used by group members, it is not nearly as costly in annual claims as prescription drug or dental insurances. This is often a part of the plan you can enhance for employees to make them feel more covered by their group benefits plan without adding too much extra cost to the group insurance.
Short-Term disability is usually defined as starting immediately if an employee or group member is injured in an accident or is hospitalized or on the eighth day of an illness making them unable to come to work. This can be very expensive addition to your group insurance plan and is typically the first benefit removed from a plan when looking to control costs. Most small to medium sized business find it less costly to bear the cost of salary continuation at a lower rate, say 70% of prior earnings until the employee qualifies for Long-Term Disability benefits.
If you are interested in how much this might cost, The Benefit Specialists Corp. can get you a quote if your company qualifies for the benefit, and compare premiums to self funded insurance in the form of salary continuance.
A typical group long-term disability insurance plan would cover employees or group members after they have been disabled and away from work for over 120 days (which is the length of time the typical short-term disability plan pays out or when a person’s Employment Insurance would run out). The long-term disability coverage is designed to replace about two thirds or 66% of an employee’s before tax income as tax free earnings.
In order for the group long term disability insurance to be considered a tax free benefit when the employee is disabled, the employee would have to pay for the premiums themselves. In a usual group insurance plan design, the total premium cost of the plan is shared between the employees and the employer. The dollars contributed towards the plan by the employee are used to fund the long-term disability insurance premiums first, thereby accounting for the employee paying their own disability premiums.
Group long-term disability insurance is usually less expensive than buying your own stand alone disability insurance plan. There are some draw-backs to only being insured through a group disability insurance plan. You can only be eligible for benefits if you are totally disabled and can do none of your duties. If you even worked part-time while sick or injured you would lose your disability benefits. You would also only be covered for 24 months in your “regular occupation”. This means after 24 months of claiming disability benefits, if you are still off work, you would be reassessed as “any occupation” meaning you might be forced back into the workforce in a career you never trained or wanted to do. This is, however, excellent and very affordable disability coverage for total disability situations.
Group life insurance is a requirement for most group insurance plans. Even a bare minimum of group life insurance must be included on the plan, otherwise the other benefits like dental, drug and disability insurance cannot be designed. The minimum amount of group life insurance for employees or group members is typically $25,000.
A common plan design for group life insurance is a multiple of annual earnings, rounded off to the nearest thousand dollars. Therefore, if you had 2 times earnings and made $70,000 per year, you would have $140,000 of group life insurance on your plan.
Group life insurance can also be topped up by the employee or group member if they so choose, and are willing to pay the premiums themselves. Many plans allow the employees to elect additional multiples of earnings or flat extra amounts to be added to their plan and pay the extra premium out of their pay cheques.
Group AD&D insurance is a very cost effective way to double your life insurance coverage in case you were to die because of an accident. This is usually an optional type of insurance the employee or group member can elect to add to their plan if it is flexible enough to offer options to the employees. If can be very cheap to add up to $250,000 of group AD&D insurance for the plan members.
Group Critical Illness Insurance is still a very uncommon addition to Canadian group insurance policies. It covers employees for major life altering events like cancer, heart attack, stroke bypass surgery, Parkinson’s, MS, and many other life altering health conditions. Some groups exist with up to $100,000 of critical illness coverage for the employee and an optional rider for the spouse. Very often there is a base amount of critical illness coverage, like $20,000, which is guaranteed issue for employees, and the optional coverage riders would require medical evidence to put it in place.
If you are interested in offering group critical illness insurance, it would be best to offer a smaller amount of coverage via a group contract without medical evidence being required. Additional amounts of “optional” coverage could be applied for by employees who are able to provide medical evidence and qualify for the coverage. This would be much less costly to the employee and employer as group members with uninsurable health conditions would only be covered for the base amounts of coverage, reducing claims and reducing overall premiums.
With an employee group insurance plan, you often have the choice of adding spousal and dependant coverage. These again are optional coverages that the employee or group member can elect to add to their plan. The extra premium for these optional additions should be added to the employees cost, and should not bear an additional premium to the employer sponsoring the group insurance plan.
This is usually well received by employees, as it is a very cost effective way to add insurance coverage for their spouse and children at very cheap, group insurance rates. This is most often offered as optional coverage for life insurance, but there are some plans which include critical illness insurance coverage for spouses (but not children).A basic plan would offer $10,000 of life insurance for the spouse and $5,000 for all children. This is then topped up if the employee elects to and often they can add $250,000 of life insurance on a spouse.
These types of benefits plans are only available to groups with a large number of employees to insure. They are usually structured on a flex benefits platform, where there are dollars or credits assigned to each employee. These credits are then used to buy different levels of benefits for dental insurance, prescription drug coverage, life insurance, spousal coverage, extended medical, etc. A flex benefits plan is very popular among employees because it allows the individual to choose the type of coverage they think would best suit them. For instance, if many members of their family wear glasses, a good extended medical top-up with lots of vision care benefits would make sense. If they are rather healthy but might need a lot of upcoming dental work, they can reduce their prescription drug coverage and increase the dental insurance.
If the employee does not spend all their flex benefits, the excess credits are put into a Health Spending Account, which is additional dollars that can be reimbursed to the employee if they go over their annual maximum limits for any other level of coverage they chose. Some group insurance plans even include a base amount of health spending dollars for all employees to use each year to cover the costs they might incur. For instance, if the group insurance plan only included 50% coverage for restorative dental (crowns, bridges, root canals, etc.) and the employee had a $2,000 dental bill for a crown, they could use the money in their health spending account to help pay for the $1,000 of dental bills that were not covered by the plan.