We understand that your business is unique. You might have as few as 1 employee, and likely many more, all with different needs. We specialize in designing simple and sustainable group benefits plans that will fit your employee’s needs, and your company’s budget.
Our team is here to build an employee benefits package that will meet your company’s group benefits goals. We also offer a heath cheque program that can be used stand-alone or in conjunction with a group health plan to provide more flexible coverage.
- What benefits are included in a group benefit plan?
A. Normally there are six components available in a group benefit program (only the life insurance benefit is mandatory):
• Life and AD&D (Accidental Death and Dismemberment)
• Health Benefits
• Dental Benefits
• Short Term Disability
• Long Term Disability
• Critical Illness Insurance
- How does the life insurance component work?
A. The life insurance component is usually either a flat amount of coverage, or a function of annual income. The premiums for this component are based on the average age of the group members, and the male/female ratio. The higher the average age in the group, the higher the premium will be. The higher the percentage of females in the group, the lower the premiums.
- What is AD&D (Accidental Death & Dismemberment)?
A. Accidental Death and Dismemberment is included with the life insurance component on most group benefit plans. There is a flat amount payable if the insured happens to die in an accident (as opposed to an illness). There are also amounts payable if the insured does not die but suffers an injury i.e. loss of finger or a leg or sight.
- How long does Short Term Disability last?
A. Short Term Disability plans pay the individual a portion of their income if they are unable to work due to sickness or injury. They are integrated with any existing short term plans (like Employment Insurance) to provide continuous coverage. Usually, these plans start a week or two after the individual cannot work, and continue for a short time, e.g. four or six months. In many cases a company which has a Short Term Disability plan, also has a Long Term Disability plan, so the length of the Short Term Disability period ends where the Long Term Disability plan begins so there is no interruption to the income of the claimant.
- How much of my income is protected by Long Term Disability (LTD) insurance?
A. The most common coverage amount found in LTD is 2/3 of the net monthly income of the employee. Since the benefit is non-taxable, and a lower amount per month provides incentive to return to work, the 2/3 limit is typical. The premiums for LTD are affected by various factors including average age in the group, type of work performed, and percentage of male/female content. A higher average age will mean higher premium, while white collar occupations usually mean lower premiums. Interestingly, if the higher the female content, the higher the premiums will be (which is the opposite of life insurance premiums).
- How does Critical Illness insurance work?
A. The critical illness plan provides a lump sum benefit if the insured suffers a life-threatening illness (for example a heart attack, stroke, cancer, coronary artery bypass), and survives for thirty days. This benefit is called a living benefit because the insured gets the money, not the beneficiaries. The money can be used for anything - paying off medical bills, rehabilitation, coverage of additional expenses incurred, travel out of province for treatment.
- What is usually covered by the health benefits?
A. Most of the benefit in a health plan covers prescription drugs, and this is often unlimited to cover extraordinary expenses. However, there are a variety of other health care coverages:
• Professional services, such as chiropractors, psychologists, chiropodists, etc
• Semi-private hospital coverage
• Home care nursing
• Paramedical supplies
• Out-of- province medical protection
• Vision care
The different types of benefits supplied under the health portion of the plan are often offered under a “co-insurance” type of system. At 100% co-insurance, the insurance company would pay for all of whatever benefit is being covered. At 80%, the insured will pay 20% of the cost of the medical treatment or drug purchase, and the benefit carrier will pay the rest. The higher the co-insurance number, the higher the premium will be. These different components and co-insurance options can be mixed and matched to provide the best value for your staff and your company.
- What is normally covered under the dental portion of the benefit program?
A. The levels of dental coverage are divided into three categories:
• Basic and preventative
• Major and restorative
Basic and preventative is exactly like it sounds - treatments which are basic to the health of your teeth are covered under this level. Things like cleanings, fillings, x-rays. Usually, any treatment which is required for the health of your teeth will fall into this category.
Major and Restorative covers other, more serious (and expensive) treatments such as caps and crowns. These treatments are normally viewed to be more cosmetic than a requirement for the health of the teeth
Orthodontics are not covered in many plans today, and when they are it is usually with a 50% deductible and a cap on benefits payable.
- How does the claims process work for health and dental?
A. Depending on the type of benefit plan in place there are a few different methods of having claims paid. Many plans today have a drug card. If this is the case, then the individual goes to the drug store and picks up their prescription and only has to pay the druggist whatever amount the insurance company is not going to cover on their prescription. If the plan does not have a drug card the procedure is still very simple. The individual pays for the prescription up front, then sends the receipt and the claim form to the benefit company, and then is re-imbursed for the amount due under the plan. The same procedure is followed when the bill is for some medical supplies or paramedical service.
For most dental claims, the insured has to pay the dentist at the time of treatment. Then some dentists will file the claim with the benefit company directly, while others just provide a form to the insured to send in on their own. In either case, the insured will be re-imbursed for the covered cost of the dental work.
- Does a company need to take all of the pieces of a group plan, or only some of them?
A. For most groups, Life and AD&D is mandatory, and then at least one other component (ie STD, LTD, Critical Illness, Health, or Dental).
- Why do health premiums tend to increase every year?
A. There is very heavy upward pressure on health premiums in particular since inflation in the medical world is approaching 15% a year. There are several factors driving this rate. New drugs which are released in the market every year tend to be extremely expensive, and it does not take too many claims at $50,000 a year to drive up the inflation figure. At the same time, the population is getting older, and the workforce is aging since the number of new workers is not increasing fast enough. This also drives up the claims. Finally, governments are trying to download as many costs as possible to the private sector so they can reduce their costs. This means that group plans end up paying for expenses that they did not have to previously. (Government cancellation of payment for eye examinations is a good example of this trend)
- Can the employees pick and choose which benefit they would like to have?
A. This is a very common question. Group plans do not allow individuals to select what they want, once the benefit plan has been finalized, to avoid having individuals who feel they won't need the coverage to "opt-out." The cost to the remaining members of the group would then become very high and thus unaffordable. This is what’s called “anti-selection”, and this is the reason why plans have strict requirements that all eligible members must participate. The only exception occurs when a person is covered under their spouse's plan, that employee is allowed to “opt out” of the benefit that their spouse already has.
- If a company implements a benefit plan, do they have to offer it to all staff?
A. The company is not obligated to offer the plan to all staff, but they are obligated to offer it to homogenous and clearly defined groups within the company. For instance, you can have a plan which is offered to the Accounting Department, but not the Sales Department. However, you could not implement a plan which only includes your favourite staff members from each department.
- Can a benefit plan be run on a “self-insured” basis?
A. The larger your company, the easier it becomes to self-insure components of your group benefit program. Generally, only very large multinational companies self-insure the Life insurance or Long Term Disability portions of their group benefit program. The fact is that a single claim in those instances is so large that it takes a large company to absorb the costs. However, self-insurance is becoming a very viable option for small and mid-size companies for health and dental benefit component of benefit plans with the development of fairly low “stop-loss” insurance certificate options. With Stop-Loss insurance, the company is only at risk for a certain amount of claims, and everything above that amount is paid for by an insurer. Depending on the group structure and the company, this can be a very effective method of reducing the costs in the health and dental benefit portion of the plan. Most “leading edge” plan structures in today’s market have some element of self-insurance built into the program.