Contributing Author - Brennan Doherty
Keeping employees happy isn’t easy at the moment. Between the COVID-19 pandemic’s ongoing danger, public health restrictions, and rising inflation, small business owners are having trouble keeping the lights on – let alone paying for group health insurance.
Health benefits can be a powerful way to reward and hang onto top talent, especially at a time when many workers are thinking about quitting. Higher salaries, flexible working hours, or longer vacation time may not always be possible for small business owners. But group health insurance is one way to keep employees healthy, happy, and well-rewarded.
As with any other policy, group health insurance isn’t always straightforward. Plans can vary widely from provider to provider (or even among clients of roughly the same size. How does it all work? Insurdinary breaks down the basics:
What Is Group Health Insurance?
Group health insurance plans allow employees of a business to access dental, eyecare, in-hospital coverage, and other expenses that may not be covered by a province or territory’s healthcare system. That can include anything from the cost of prescription drugs to massages, depending on the specifics of the insurance policy. Around 26 million Canadians have coverage for extended health care, according to Joan Weir, vice president of group benefits at the Canadian Life and Health Insurance Association – a group that represents nearly the entire health insurance sector.
Because group health insurance policies cover an entire company or organizations, not just an individual client, their rates can be lower than individual insurance plans. After all, the company providing a group health insurance plan is spreading its risk out across an entire workforce, meaning they’re much less likely to pay out in full.
Group health insurance policies – as the name suggests – cannot be used by individuals. According to George Solomonov, Executive Vice President at Alliance Income Services Corp, a group benefit plan can qualify a minimum of two people with some carriers, although most require three. Some group health insurance policies for medium or large businesses require minimum enrollments of 20 people or more.
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Why Should I Buy Group Health Insurance?
At a time when Canadian small businesses are still reeling from the financial hardships of the pandemic, group health insurance might seem like just one more cost for cash-strapped owners to bear. Weir says small business have had problems affording group health insurance – but the payoff for owners is worthwhile.
“First and foremost, we are in a time when small businesses are competing for employees,” Weir says. “Employees may feel that if they get two offers, and one has benefits, maybe that’s the one they’re going to take.”
The other reason is even simpler. Healthy employees are more productive. They take fewer sick days, feel more appreciated, and will return to work more quickly than employees without adequate access to healthcare. Group health insurance benefits may seem expensive, especially at a time when labour costs – as well as the costs of everything else – are climbing sharply. But they may help retain employees amid fears that employees will simply quit for a better-paying job at the first opportunity.
How Much Does It Cost?
Both employers and employees pay into group health insurance – typically, an employer pays the lion’s share of the costs (around 80 percent or so) while employees pay the difference out of each paycheque. The total cost per employee can vary quite widely, depending on the details of a particular plan and business.
Generally speaking, Weir says, insurers don’t provide full coverage anymore. “To be quite honest, offering 100 percent coverage could increase benefits fraud,” she says. “That co-share ensures a staff member buys into the plan and they will buy services that they really need.”
Solomonov says the cost of group health insurance policies per employee can very widely depending on whether someone is just covering themselves, or their family. “Singles can be $1,000 or less for a package that would include life, accidental death and dismemberment, extended health care, travel, vision, and dental,” he says. “A family can be around $3,000 annually for a similar plan. Plans that would be $5,000 or more can include higher therapist limits, unlimited drug coverage, major restorative dental procedures and maybe even long-term disability insurance.”
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What Should I Consider When Buying Group Health Insurance?
First, Weir says, there are many, many group health insurance providers out there. Any small business owner looking for group health insurance should absolutely get a quote. (“Quotes are free from a number of different sources,” she says.”). Insurdinary can help you find the best deals on group health insurance for your business, no matter how big or small.
About the Author
Brennan Doherty is a Toronto-based writer. He was once a staff reporter for the Toronto Star's 24-hour news desk, a staff reporter for Star Calgary, and worked for CTV News Channel. He is a proud Ryerson University graduate and gets far too nerdy about unpacking complicated ideas.
Insurdinary works closely with journalists such as Brennan to bring you the most up to date and informative content on the market today. Our collaborations with industry professionals are paramount to not only our brand, but to our loyal readers.