Group health insurance benefits for business owners

Although the federal and Ontario governments provide with major health insurance programs such as OHIP, disability, workplace injuries, etc., they don’t cover everything. Group health insurance provides additional healthcare coverage for small business owners and their employees.

Working hard for your business, you probably don’t know that more than 2/3 of Canadians are underinsured — there’s a gap between the amount of insurance they have and what their families may need. Having group health insurance helps protect your business, your employees, and their families with valuable, competitively priced coverage that meets your specific business needs. For many of those plans, there is no minimum number of employees or years in business required to apply.

What group health insurance can offer?

For business owners and their employees, group health insurance can offer:

• dental care
• vision care
• prescription drug costs
• hospital rooms
• paramedical expenses
• medical equipment
• travel insurance
• and more…

The major advantage of group health insurance

The major advantage of group health insurance is cost. The cost of group health insurance is usually much lower than individual plans because the risk is spread across a higher number of people. Simply put, this type of insurance is cheaper and more affordable than individual plans available on the market.

Employers must pay at least 25% of the cost of the group insurance plan, which means employees usually pay up to 75% of the cost of benefits.

In Ontario, families spend an average of $4,000 CAD per year on private or supplemental health insurance. However, do keep in mind that this cost would vary depending on many factors such as the overall coverage, deductible, number of dependents, age, and health history.

Main benefits of group health insurance:

• Coverage: Usually, a group health insurance policy covers prescription drugs, dental and vision care, physiotherapy and other health services to better ensure the physical, mental and financial health of insured members.
• Coverage for dependents: In addition, dependents of eligible group members are generally eligible for coverage under a group plan. Dependents include spouses and children. Normally, group insurance plans extend coverage to adult dependents through age 26.
• No medical tests: Group health insurance plans do not require medical tests of their members because they are uniform in nature
• Significantly lower costs: Members of the group buy insurance on a “wholesale” basis. The coverage costs each individual member much less than if they had to purchase an individual health insurance plan.
• Equal payments: Every insured person in the group pays the same premium amount regardless of their age or other factors. In contrast, under a private health insurance plan, a person pays different premium amount for the same coverage based on their age, location, pre-existing conditions, etc.
• Master Policy Holder: To save administrative costs, there is often a Master Policy Holder who will retain the documentation on behalf of the members, and may deal with the members on behalf of the insurer. The Master Policy Holder also ensures each member gets their certificate of coverage stating the details of the premium paid, cover available, term of the cover and the claims process
• Coverage renewal: Generally, people are eligible to renew coverage while they continue to be members of the group. Under group insurance a person will normally remain covered as long as he or she continues to work for a certain employer and pays the required insurance premiums. In contrast, under individual coverage, the insurance company often has the right not to renew an individual health insurance policy (for instance if the person’s risk profile changes).
• Coverage termination: If a person leaves the company or organization, their coverage is terminated. However, sometimes employees can maintain their health insurance plan even if they leave the company.

Benefits for business owners

• Possibility to pay for your medical expenses through your business as opposed to paying for them personally.
• Saving money on taxes.
• Employees’ retention: Group insurance is a significant part of the employees’ total compensation. It provides peace of mind and security for your employees and for yourself. It results in greater employee commitment and satisfaction.
• Protecting your most important asset, your employees.
• Maximizing after-tax compensation: some group insurance plans can be designed so that these expenses will be paid from pre-tax income, leaving more money into the hands of the employees.
• Maintaining productivity: Knowing that help extended healthcare is available any time people need it gives your employees peace of mind. Happy, focused, and stress-free employees are productive employees.

If you run your own business with the help from your employees and don’t have group health insurance, consider getting one.