Buy Group Health Insurance Plans? 101 Guide for Canadian Small Businesses To Setup Group Life Insurance for Employees
Are you an HR or Business Owner of a Canadian Business looking to setup a group health insurance for your workers? This process is very time consuming and can be complex, especially if you don’t have experience with life insurances.
SaveCorporationTax.com is here to give you some guidelines. You might be doing research online (Do It Yourself) and comparing the quotes from different insurance companies, but you save much more time and trouble by talking to a Canadian life insurance agent.
Besides, setting up a group plan for your employees must be done a licensed life insurance agent.
Why Group Health Plans Are Better Than Individual Plans for Your Employees
Group Health Insurance policies in Canada provide coverage to a group of individuals which consists of members or employees of a company. The members or employees often get insurance at a lower cost since the risk is divided among the policyholders. This is one of the reasons many employers choose to purchase group insurance because it saves them money compared to buying individual insurance policies.
To understand better how group Life insurance works, get in touch with a professional agent from Save Corporation Tax.
How Group Health Insurance Works
Group health insurance policies are bought by companies and business owners which they offer as part of the employee package. This type of policy can only be purchased by groups. Hence, individuals are not allowed to purchase this type of policy. Group insurance plans require around 70% participation of the group members.
The company chooses the type of insurance plan and once presented to the employees, the members are given the option to accept or decline the offer and coverage. In some cases, the insured members may have the option to get basic or more advanced coverage with add-on riders. In terms of premium, the cost is split between the company and the employees which are based on the type of insurance plan acquired.
Since the risk is divided among the members the cost becomes lower. Therefore, it is more affordable than individual insurance plans because of the volume of people who bought into the plan. Also, the insurance coverage may also be extended to the insured’s immediate family members or dependents at an extra cost.
Benefits of a Group Health Insurance Plan
One of the main advantages of a group health insurance plan is that the risk and cost is divided among a number of individuals. This keeps the premiums low. At the same time, the insurers have more control over and cost through HMOs to keep the costs low to make it affordable. HMOs offer better choices for patients in terms of access to doctors and specialists who usually charge higher premiums.
Offering group health insurance to employees provide a better work environment. Employers who are trying to attract and retain employees should consider adding a group insurance plan in the employee package. As an add-on, this feature can improve employee engagement.
Group insurance policies can be a tax-effective way to benefit employees. Both health and dental benefits are generally tax-free. This policy also helps protect the health of the employees by helping them manage it better.
Business owners who are looking into purchasing a group insurance plan should consider a comprehensive group benefits plan that is also flexible. Another important thing to consider is to get short and long term disability insurance to be able to help replace lost income in case the employee becomes disabled and is unable to work due to an illness or injury.
Group critical illness benefits, on the other hand, are non-taxable as long as the illness is covered by the insurance. Assistance programs help employees manage stress better while the tools provided can give them access to a pool of healthcare professionals as well as support for the employees.
Get Extended Health Care Coverage for Your Employees
Extended Health Care benefits are also known as major medical benefits designed to supplement existing medical insurance policies. The benefits cover reimbursement of expenses that are not covered by government plans. The extended health care benefits are classified into different categories including hospital coverage, medical supplies, drug coverage, paramedical services, out-of-province coverage, and other health care benefits. Meanwhile, other health care benefits are reimbursed at lower levels.
- Hospital benefit — This covers basic hospital expenses that the employee has incurred during a specific period of hospital confinement including professional services, ward accommodations, drugs, diagnostic procedures. The benefits allow the insured to access other accommodations such as semi-private or private rooms.
- Medical supplies and equipment — The reimbursement for supplies including the rental or purchase of medical supplies and equipment. The medical equipment includes hospital beds, wheelchairs, braces, oxygen supplies, dialysis equipment, and other supplies.
- Drug coverage — In general, prescription drugs are the biggest chunk of a health care plan and usually accounts for approximately 60% to 80% of the claims.
- Out-of-province services — This type of benefit offers coverage for out-of-province emergency medical expenses wherein the insured person is traveling outside the individual’s province of residence. It covers a period for up to 60 days of travel. The expenses covered include hospital room, out-patient services, supplies, treatment, diagnosis, and ambulance. The reimbursement for referred services requires the approval of the insurer.
- Paramedical services — This benefit covers x-rays and other services from an osteopath, chiropractor, acupuncturist, speech therapist, psychologist, and chiropractors to name a few. The reimbursement is based on reasonable charges for the insured’s residence and is subject to a maximum amount per year. At the same time, the services often require a physician’s referral.
- Travel assistance — This benefit provides employees with worldwide assistance that is accessible 24 hours a day. This includes medical referrals, assistance in identifying a medical facility, on-site hospital payments, medical transportation, communication with the insured’s doctor, family or employer.
Other Healthcare Benefits You Can Include
- Private duty nursing — This covers a certain amount for every calendar year for the services of a registered nursing assistant, certified nursing assistant, and licensed nurses administering care at home. A private duty nurse must be based on the physician’s recommendation.
- Accidental dental — This covers the reimbursement of dental services as a result of accidental injury to the mouth.
- Ambulance service — It covers government-sponsored benefit programs including the excess amount that is payable from the health insurance plan for ambulance services.
- Convalescent hospital care — This provides coverage for any excess costs of the ward as well as fees for convalescent care and treatment from a nursing home.
- Vision care — This type of coverage is optional and is not included in the standard policy of most health coverage plans. The benefits under vision care are eye exams, eyeglasses, contact lenses, but do not usually include prescription glasses and safety glasses. This also covers eye examinations conducted once a year per dependent child while adults are allowed one eye examination per two years.
To know more about group health insurance coverage, visit Save Corporation Tax.
What Is A Group Insurance Coverage?
Canadian Companies who are planning on offering group health insurance to their employees should offer its benefits to all full-time employees. This includes employees who are working 30 hours or more in a week. The employer can also opt to offer coverage to part-time employees who are working less than 30 hours a week. Once an employer offers this to a part-timer the all part-time employees should also be eligible.
An employer should offer coverage to all employees despite their health condition. Employers cannot deny an employee coverage based on his medical record, health issues or preexisting conditions. At the same time, dependents can also be covered under a group insurance plan. These include husbands or wives, children, and in some scenarios, domestic partners.
Who is Eligible?
An employer can provide coverage to an employee who is on the company’s payroll and who it is paying taxes for. Insurers, on the other hand, requires a minimum number of employees to join a group insurance plan. The eligible employees include those who are on maternity, paid vacation or sick leave. However, the employees should be back at work before they qualify.
The individuals who are not eligible for group health coverage include employees covered under a bargaining agreement, unrelated company, non-employee, independent contractors, retirees, temporary and seasonal employees. A group health coverage should also be extended to an employee’s dependent particularly their spouse and children. This policy also qualifies adult dependents through 26 years old.
However, employers have the option to choose to include individuals above 26 years old. Employers can also extend the health benefits to an employee’s unmarried domestic partner. By doing so, the coverage should have the same amount of coverage offered to the spouses.
The employee along with his domestic partner are required to sign an affidavit of domestic partnership. This document helps determine that the couple is living together, committed in a relationship, and will not change their circumstances. This document serves as proof that the domestic partner is not just a roommate and that the employee and his domestic partner have no intention of defrauding the insurance company.
Conclusion
As an employer and business owner, you should consider offering group extended health care coverage to your employees. Adding this to your employee benefits package can help your company attract more employees while retaining your employees.
There are tons of benefits for both employers and employees in having a group insurance in place. While there are different kinds of insurance companies with varying health programs, make sure that you discuss all the details first including the benefits, coverage, and costs of the policy with a professional insurance agent.
