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A Complete Guide on Group Benefits and Why You Should Be Offering Them

on 11 Jun, 2019

A recent study ranked workspace stress as the chief cause of mental health concerns in Canada. The study also found that 500,000 Canadians miss work every week due to mental health issues. It’s no wonder why almost all group benefits insurers include mental health coverage in their packages.

Why is this important to you? The answer in a word, profit.

Keep your employees happy and you’ll keep them productive. Sound employee mental health is an asset to both business and employer. This is why most employers have made employee well-being a top business goal.

In this article, you’ll learn about all the gains group benefits will bring to your company. I’ll also share some pointers on how to choose the best group benefits provider.

Let’s dive right in!

What is Group Insurance?

Employers apply for relevant insurance policies on behalf of eligible employees. 

Group benefits/ group insurance is one of the top major employee benefits that employers can offer. Group insurance for employees has many additional benefits for both the workers and the employer.

Benefits of Group Insurance

The benefits of group insurance beat raising a worker’s salary. Here’s why!

They’re Tax-effective

Group benefits are cost-effective policies. Health and dental benefits are excellent examples. The two benefits are exempted from taxation in all Canadian provinces, except Quebec.

Employees without group coverage have to purchase equivalent individual insurance with after-tax money. Individual policies are expensive. The employee also has the added task of providing evidence of good health.

They Improve the Mental Health of Employees

Poor mental health is a real epidemic in the Canadian workspace. Offering group benefits to employees goes a long way in improving their mental health. In fact, considering the prevalence of mental health issues in Canada, you will be doing your government a great service.

Yes, I said Government! Research shows the Canadian economy loses over $50 billion to mental health issues every year.

Employee Loyalty

There is a big divide between what employees want, and what employers believe employees want. To illustrate this, I will call your attention to a survey conducted by the Harvard Business Review. 58% of employees would more easily trust a stranger than their own bosses.

Offering group benefits show that you are genuinely concerned about your employees’ welfare. The simple gesture earns you their respect and loyalty- at no extra cost. Even a simple group dental plan has the ability to attract, motivate, and retain employees.

Group dental plans offer a perfect solution for companies who want to give employees great benefits while reaping the rewards of their investment at the same time.

How Does Group Insurance Work

Here are a few additional things to know in order to understand how group insurance works.

Group Benefits Insurance: Where Do I Begin?

Employers have insurable interests in the well-being of their employees. All group benefits policies are founded on this fact. Applying for a group benefits plan is a clean-cut process.

In these policies, the employers are the master policyholders. That is to say, it’s the employer’s duty to apply for the cover. The applicant only needs to prove the existence of an insurable group of people.

The group, on the other hand, must have a common unifying interest- other than the desire for insurance of course. You, as the employer, will be your employees’ unifying interest.

The master policyholder (employer) may retain documentation for the members and deal with the insurer on their behalf. This intervention by the employer is what makes group insurance so appealing to employees. The employees can afford to be jovial and stress-free because someone trust-worthy holds their insurers to account.

A stress-free workforce is a profitable workforce! The data is clear on that assertion. Canadian employers lose upwards of $20 billion to employee mental issues every year.

$20 billion! That’s quite the loss.

Group Benefits: Do You Qualify?

Now that you’ve realized you need to offer group benefits, do you qualify for a policy? Let’s find out: Are an employer seeking to cover your employees?

Congratulations, you qualify for a group benefits policy! Now that you qualify, what next?

Well, you need to identify the best arrangement for your employees. To do that, conduct a little research. Understand what each terminology means.

To put that in perspective, you can have benefits coverage for life insurance or whole life insurance. Both policies pay out comparably but are worlds apart. As an employer, find what each policy means to your employees’ benefits.

Understand the differences between life and whole life insurance before settling for either. There’s another reason why you, the master policyholder, need to be current with all insurance-related information:

We all know how hard it is to land a motivated worker who fully buys into the company dream. Did you know showing concern for their well-being lands you their loyalty? Research by Global Studies reveals that a show of appreciation will help you retain up to 79% of your best workers.

Types of Group Insurance: The Most Popular Group Benefits in Canada

Let’s increase your knowledge and see if we can reverse that last statistic. Group insurance packages vary with the insurer. That said, we’ll look at the five most common group benefits policies offered in Canada.

Group Life Insurance

Employers offer different packages of life insurance benefits to their employees. This insurance gives employees the assurance that their loved ones will be provided for if the worst should happen.

Group life insurance is better for employees in many ways when compared to individual life insurance.

Extended Health Care

It’s practically impossible to fashion a policy that caters for all possibilities. Extended health care addresses this shortcoming.

This coverage reimburses all the money an employee spends on medical services not covered in the main plan. The coverage covers anything from paramedical services to medical equipment fee.

Disability Benefits Policies

These benefits are designed to kick in if an employee becomes incapacitated and can’t work. For the period of the incapacitation, employees are entitled to benefits proportionate to their income.

Dental Care

Group dental insurance is a very popular benefits package. This is because group premiums are more affordable than individual premiums. Group insurance enjoys reduced premiums because it doesn’t place undue regard on individual-risk.

Accident-related Coverage

These policies cover everything from a minor accident to dismemberment and fatalities.

Finally, you’ll undoubtedly come across flexible benefits plans. These plans are not policies per se: they’re more of trends.

These plans are quickly replacing fixed plans, which offer one basic plan to all members. Flexible benefits plans allow employees to pick benefits that best suit their individual situations. With flexible plans, employees are assured of policies tailored to their specific needs.

Let’s now look at the things to consider when choosing a group benefits insurer in Canada.

Group Benefits Insurers: How to Choose the Best

If you read on expecting one-size-fits-all strategies, I’ll disappoint. There’s no universal strategy. 

Your choice of an insurer should be determined by your employees’ needs. With that in mind, let’s look at how your employees should guide your choice.

Employee Demographic

Different demographics have different needs. Let’s compare Gen Y to older generations:

Gen Y employees prefer paramedical benefits to medical benefits. On the other hand, the older generations prefer medical benefits to paramedical benefits.

If your employee demographic is predominantly Gen Y, choose an insurer who offers the best lifestyle and paramedical benefits. In the case of a mix of both, settle for the insurer who offers the best blend of paramedical and medical benefits.

The Available Budget

For many people, their insurance options are limited to what they can afford to pay for coverage.

Different insurers offer different premiums at different rates. Settle for the insurer that best fits your budget. What you want is a working policy that won’t break your bank.

Your Industry

There are insurers whose niche market is industry-specific. These insurers are best suited to design industry-specific policies- for the said industries.

Former specialists from the relevant industries are usually the founders of such firms, hence the bias. Research insurers and determine their special fields of expertise.

What Employees Want

One thing must be clear by now; benefits are all about employees. It’s not about you or your preferences; it’s about the employees.

More often than not, employers have created benefits plans they thought progressive only to find that their employees couldn’t care less for them. Never design policy without employee input.

Issues like health are very personal and require utmost discretion. Very few people are comfortable enough to discuss their health issues openly. Therefore, employee input on the health benefits they most desire should be sourced anonymously.

Only then will you get an accurate picture of what the employees REALLY want.

A Quick Recap

The only way you’ll choose the best group benefits plan in Canada is if you compared all the service providers. That is a tough ask, given the hundreds of group coverage options available in the country.

The good news is that we can help you choose the policy that’s right for you. Our simple automated process helps you identify a plan that fits your healthcare needs and budget.

Contact us to compare a variety of insurance policies and find the best fit for you!

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