As Canadians, we are lucky to live in a country that provides universal health care. Because of this health care, all employees have access to basic coverage, which includes Doctor & Hospital visits.
Employee benefits in BC have traditionally covered four important insurance types.
- Extended Health and Dental Coverage
- Life Insurance
- Disability Insurance
- Retirement Plan Insurance
Each insurance plan covered an extension of benefits that the BC provincial plan doesn’t normally cover. Because health care is free or partially covered Canadian employees expect extended coverage.
Mandatory Benefits in Canada
There are a few mandatory benefits you are obligated to pay for as an employer. These include:
- Canadian Pension Plan (CPP)
- Employment Insurance (EI)
- Maternity and paternity leave
CPP, EI, and leave are all made as contributions to the government separate from an extended health coverage plan. CPP and EI should be calculated by your accounting or bookkeeping specialist to ensure you are paying accurate amounts.
Choosing an Employee Benefits Package
Employee benefits packages can be tailored to meet the needs of the employees and the employer. While there have traditionally been four options listed, benefit plans cover many different health and wellness options.
How do you choose the right benefits plan for your employees?
There are a few questions you should ask yourself before getting a group benefits plan.
- What is most important to you and your employees?
- What is the average age of your employees?
- What is your budget?
- What are your competitors or other companies in your industry offering?
- Are there industry-specific benefits that your company needs?
An insurance specialist can help you figure out what the best mix of coverage is for your company and unique situation.
Here are some of the benefits you can offer your employees:
- Dental benefits
- Wellness programs (Gym, RMT, dietician)
- Eye care
- Travel/travel expenses
- Uniform reimbursement
- Therapy
- Prescription drug coverage
- Special hospital accommodations
- Critical illness coverage
Fully Pooled, Partially Pooled, Experienced and ASO
It is important to understand how the employee benefits plan you have chosen is underwritten. This will determine the costs of your group plan and affect how the costs change over time.
There are four different ways to underwrite an insurance plan. Each plan has different costs and risks associated with it.
Fully Pooled
A fully pooled plan means your benefits claims are pooled with other companies’ claims. This is a low-risk option that ensures less price volatility. It is a plan often used by small businesses.
Partially Pooled
A partially pooled plan has a predictable price fluctuation. These plans are assessed based on the individual companies’ claims. There is a premium when claims are high and a discount when claims are low. This plan is best for small to medium-sized businesses.
Experience Based
This plan calculates your costs based on the number of claims your company has submitted in the prior year. They calculate the difference between the annual claims submitted and the premiums collected. This plan is best suited for large companies.
ASO (Administrative Services Only)
This plan is calculated specifically on the claims made by the company. Claims are made and the company is billed the next month based on those claims.
It is important to know the options you have available when it comes to group benefits plans. This will give your company of any size an opportunity to choose what is best for your budget and employees during that year. The pooled plans give small businesses the chance to lower their risk of a variable payment. While large companies have more control over their costs with experience and ASO plans.
This article is for informational purposes only. If you are looking for more specific information about your company’s options please contact me at (604) 461-6164 or by email at info@ahopkinsinsurance.ca and I would be happy to help you.
