What Is Small Business Insurance And How Do I Get Started?

Small business health insurance is health insurance coverage for employers with between 1 to 50 employees. Employers sign up for a benefits package for their employees that helps cover medical expenses above what is available through provincial coverage. 

Health benefits are a great way to offer better employee benefits packages without the high additional costs. 

Every benefits package is unique to the business and can be tailored to support the needs of the business and its employees. 

You only need one full-time employee to qualify for a group health benefit plan. 

Health or medical insurance from a group benefits plan covers extended medical. While provincial medical plans in Canada offer great free health care they do not cover important health extended medical items that can include: 

  • prescription drug coverage
  • vision care
  • paramedical services
  • extended hospital and diagnostic care
  • access to virtual health 
  • wellness resources
  • dental coverage

An employee benefits plan or group insurance plan covers extended health and dental care for employees. It can also include life insurance and wellness programs for your small business.

How Does Small Business Health Insurance Work? 

A small business can get a group benefits plan. In many cases, all the business needs are two or more employees. The business chooses its coverage from an array of different extended coverage options. 

Once the business chooses its option it can offer group benefits to its existing and new employees. It is common that the business pays a portion of the premium while the employee pays a portion. 

In many cases, the premium paid by the business can be deducted as a business expense.  

There are many factors that go into the cost of a group benefits plan. Because each plan is unique to the business it is hard to give an average. A company’s benefits program can be small and include extended health and dental. It can also offer larger packages that include life insurance, assistance, and wellness programs. 

Plans can be customized to the needs of the business and its employees. 

What Type Of Small Business Should Offer Health Benefits?

More and more employees are expecting extended benefits plans. Employees have more choice in the digital age to work for companies offering a wide variety of benefits. 

There is no limit to what type of business can offer employee benefits. 

Your business simply needs to have two or more employees. If a new business only has one employee there are still options. That would however be better served under an individual plan until the business grows. 

Here are some of the ways a group benefits plan supports your employees

What Are The 4 Major Types of Employee Benefits?

There have traditionally been four different types of employee benefits

  1. Medical insurance
  2. Life insurance
  3. Retirement plans
  4. Disability insurance

Companies can now offer a wider array of benefits that include employee wellness options. These benefits give your employees more incentive to work with you and stay for the long haul. 

In Canada, 92% of full-time employees believe benefits packages help recruit and retain employees. While 75% of employees are more likely to stay if a benefits package is available. 

Common Questions About Small Business Health Insurance: 

Does My Small Business Need Health Insurance?

As a small business owner, you are required to offer some benefits to employees. These benefits do not include health, dental, or life insurance. Extended benefits as they are called are however important for employee morale and retention. They are advised to keep the needs of your employees met. 

As a small business owner, you are required to pay employment insurance (EI), Canada Pension Plan (CPP), and either workers compensation or cover the Workers Safety and Insurance board depending on your industry.  

How many employees do you need to get group benefits? 

Your small business can get insured for a group benefits plan with as few as one employee. Requirements for a group benefits plan are met when a small business owner employs at least one full-time employee. 

How much does health insurance cost small businesses? 

Small business benefits plans can be tailored to meet the needs of each individual business. Because of the nature of plans in Canada, it is difficult to place an average cost on the service. 

The employer is also known as the plan sponsor and has to pay a minimum of 50% of the cost of the plan. Employees pay the other 50%. 

The cost of benefits is a tax-deductible business expense. The cost to the plan sponsor or employer can be deducted from tax payments making it more enticing for an employer to sign up for a group benefits plan.  

This article is not to be used as advice regarding small business insurance. It is posted for general knowledge only. If you wish to discuss your specific case feel free to give me a call at (604) 461-6164 or contact me by email at info@ahopkinsinsurance.ca.