Canada's Best Group Benefits Insurance Providers For 2023
Employers are always looking for ways to attract and retain better employees. Did you know that 83% of Canadians are more likely to accept a job if some form of group insurance or benefits is offered?
Canadians are generally familiar with provincial health insurance plans and private insurance plans, but there are many benefits for both employee and employer to have a group insurance plan in place. Companies with group benefits get tax benefits, enjoy better employee retention, and have happier, healthier employees.
This guide gives a deep dive into how group benefits work, why they are beneficial, and how to purchase the best policy for your business and employees.
What is a group benefits insurance plan?
A group benefits insurance plan is a insurance plan that an employer purchases for their employees.
Group benefits are designed to help employees cover the cost of things that provincial health care plans fully reimburse, including certain prescription drugs, dental care, hospital stays, vision care, paramedical and ambulance services. Some plans offer additional benefits that may include accidental death coverage, group life insurance, short and long-term disability, along with critical illness and wellness and protection benefits.
If you were to take out an individual health insurance plan, you have to pay for your insurance policy and any additional fees that come with it. When it comes to group health policies, employers offer a plan to their employees and sometimes the family members of their employees. Rather than have the employee cover the entire cost of their plan, the premium cost is split between the employer and employees
How does group benefits insurance work?
A group benefits insurance or a group health insurance plan is relatively straightforward. An employer purchases a group benefits plan and the employees (and sometimes spouses or dependents) enroll in the plan. Most companies will have their employees enroll at the time of hire and then renew their individual benefit choices each year when the policy comes up for renewal.
While in most provinces in Canada, a provincial health plan is mandatory, these plans only cover basic healthcare and medical services. A group benefits insurance plan covers a much broader variety of services and in turn, this helps keep employees healthy and at work.
What benefits are a standard part of a group benefits insurance plan?
A standard group benefits plan will cover the cost of services such as:
- Prescription drugs
- Paramedical and ambulance services
These are services that are either not at all covered or only partially covered under a provincial healthcare plan.
While basic and more extensive medical services are standard to a group benefits or group health insurance plan, other benefits are available.
Many employers will opt to have some form of disability coverage available for their employees, such as short or long-term disability coverage. For example, if an employee’s occupation requires them to be on their feet and lift heavy objects for most of their shift, a short-term disability plan would help offer a form of income protection while they are recovering should they need to stop working temporarily for knee surgery. Plans like these help employers retain and keep employees, who have peace of mind that they will be protected in the event of an illness or injury.
Similar to short and long-term disability plans, some other standard benefits you can expect a plan to offer are life, critical illness, and accident insurance. This will allow you to help your employees in case tragedy strikes. There are flexible options for you to provide financial support for your employees and their families in case of an illness, accident or death.
How do I purchase a group benefits insurance plan?
If you want to purchase a group insurance plan, you will need to take a few steps beforehand to determine what type of plan you will want for your employees.
First, you will need to determine if you need a small or large group plan. This will depend on how many employees you have. If you have more than 50 employees, you will need a large group policy.
You will also want to determine if you only want to offer your employee the standard benefits package or if you would like to add on any enhanced benefits.
What specialty benefits may be added to a group benefits insurance plan?
While standard coverage group health plans are available, you can also add on specialty benefits for your employees. These are also known as extended benefits.
One quickly emerging benefit is a healthcare spending account which allows you to add flexibility and choice to a group benefits plan. The term may be abbreviated as HSA or HCSA. They allow you to expand the type of expenses your plan can cover while only charging you if the account gets used.
HCSAs provide non-taxable supplemental coverage to traditional health and dental plans. Employees can choose to use their HCSA to:
- pay for deductibles and any amounts over and above a deductible (co-pays, co-insurance)
- additional expenses for a benefit if they've reached the benefit maximum
- cover insurance premiums if they purchase their own health plan for extra coverage
As an employer, you can also opt to add benefits for retirees or an employee assistance program (EAP) to assist employees to access mental health services or financial services.
How much does group benefits insurance cost?
Group benefits insurance is generally much cheaper for employees than private health insurance. Employers and employees will share the cost of the premium. However, the price will vary greatly depending on the individual circumstances of the business.
The cost of a group benefits insurance plan in Canada is not easy to calculate due to the number of factors that influence premiums. In all cases, an employer or HR administrator need to contact an insurance provider for accurate quotes.
The factors that affect the annual premium of group life insurance will be specific to the employer, the provider and the insurance policy. They include:
- Employees’ information such as age, gender and marital status
- Coverage amount
- Claim experience
- Location of the company
- Location of the employee
Also, the number of extended benefits you add to a standard benefits package will impact the cost of your group benefits or group health insurance.
As an employer in Canada, why should I offer group benefits?
An employee benefits package helps employees cover the cost of medical services that provincial health care plans may not pay for. It is also possible to combine your group benefits plan with a retirement and savings plan to help your employees reach their financial and retirement goals.
At first glance, it might seem like a group benefits package solely benefits the employee, but did you know that it is mutually beneficial for both employee and employer?
Benefits for employees:
- Employees can get coverage at a lower cost compared to most private plans
- Help protect the health of your employees and their family
- Help reduce financial stress if the unplanned occurs
Benefits for employers:
- Help improve morale and increase productivity
- Typically less expensive than providing salary increases as there are no additional increases in CPP, EI or Workers’ Compensation rates
- Premiums paid on group benefits can be written off as a business expense
- Maintain a competitive edge in the job market
- Attract and keep key employees
As an employer in Canada, am I required to offer group benefits to my employees?
While it is becoming a cultural norm for an employer to offer some form of employee benefits package, it is not mandatory in Canada. If you are a very small company with only a few employees and just starting as a business, it may not be a financially sound company decision at that time.
However, many workers will not agree on taking a job position if there isn’t some sort of health insurance included. Around 70% of Canadians have some sort of supplementary health insurance plan meaning it is important to many people so keep that in mind when deciding if a group benefits package is right for you.
How many employees does a company need to have to qualify for group benefits insurance?
There are two types of group benefits insurance in Canada: small health insurance plans and large health insurance plans. If you are a company with one to 50 employees, you will be able to obtain a small group health plan. In a company with 51 or more employees, you will need to file for a large health plan.
Keep in mind however that if you are a company with only a few people, you will need to have at least one person working for the company who is not related to the employer for your company to be eligible for group health benefits.
Can I offer benefits to part-time employees?
In Canada, there are some legislated benefits which as an employer you must provide:
- Employment Insurance (both employer and employee must pay into this)
- Canada Pension Plan (both employer and your employee must pay into this)
- Workplace Insurance Coverage (requirements and premiums for this coverage vary by industry)
Any additional benefits, such as health insurance, a dental plan or life insurance, are at your discretion to provide. However, it has become the norm to provide employee benefits. 90% of large businesses and 70% of small businesses provide some form of insurance coverage to their employees.
Good to know
As an employer, you will be able to decide whether you want to offer benefits to attract part-time employees or would rather only provide benefits to full-time employees.
Do all my employees have to enroll in my group benefits plan?
If your employee does not wish to enroll in your benefits plan, they have two options available to them.
They may opt out of a group benefits plan by waiving the benefit options or refusing benefits entirely. In both circumstances, the employee will be required to provide evidence they are covered under a comparable plan – either a spouses or dependents plan or a private care plan.
|Opting out||What it means|
|Most benefits packages include health, dental, and disability coverage. If an employee chooses to waive their health and dental coverage, they can still be insured for life and disability, because a dependent does not receive life insurance, short-term disability or long-term disability coverage through their spouse’s plan.|
|Refusal of benefits entirely means that the employee is opting-out of health/dental coverage and all other coverage.|
What insurers provide group benefits?
If you are an employer wanting to get group benefits, you may be wondering what insurers provide such benefits. Some of the most popular group benefits plans are:
- Manulife group benefits
- Sun Life group benefits
- Blue Cross group benefits
- Empire Life group benefits
- Canada Life group benefits
- IA Financial Groupe
Good to know
Need a quote? Compare group benefits plans quickly and anonymously here.