How to Offer a Health Insurance Plan for Your Canadian Employees

by Thom Tracy

2 min read

With the spiraling cost of medical care, health insurance is of the utmost importance to Canadian citizens. Many small businesses absorb the cost of offering benefit plans to supplement universal health insurance offered to all inhabitants. [Quebec takes coverage one step further] (http://www.quebecfirst.com/en/living-in-quebec-city/healthcare/), offering a public prescription drug program that business owners in other provinces typically make part of a group plan. Individuals who move to the province are subject to a three-month waiting period before benefits kick in. Those new residents who are subject to the probationary period are advised to obtain private insurance during the wait, as any medical costs must be paid out of pocket within the 90-day time frame.

In other provinces, small businesses can stay competitive by constructing benefit plans that include dental, life, and disability insurance. A 2011 study conducted by Sanofi revealed that 45% of employees would prefer to retain employer benefit plans rather than receive cash compensation in lieu of those insurances.

Crossing the Border

Some Canadians cross the border into the United States obtain private or group health coverage there, as long as they have the appropriate visa. Certain agricultural workers are eligible, as are students, athletes, and other non-agricultural workers who pursue occupations of which there is a shortage in the United States. Coverage options range from short-term policies spanning five days to more permanent arrangements that are effective for up to 65 years.

Additionally, Ontario has a reciprocal agreement with health care providers in the United States. Canadians who seek advanced medical treatments such as stem cell transplants travel to Buffalo, New York, Cleveland, Ohio, and Detroit, Michigan for services. Patients who utilize such services often cite long wait times, and health care providers in Ontario suggest that facilities are committing resources to be able to handle demand for these complex procedures.

Employee Benefits

Business owners feel the need to offer comprehensive benefits packages to employees, but they must be in tune with the types of coverage that fit their employees’ needs. Younger workers have different needs than older employees, and entrepreneurs would be wise to tailor group benefits to their workers’ demographics. Life insurance may be less important to workers in the 20- to 30-year-old age group than it would be for older, married workers who need to protect spouses and dependent children from a sudden loss of life and income. While this coverage can be costly for a small business, the perks are crucial in attracting and retaining key employees. Besides salary, benefits are the second most important factor in deciding to join a company or stay with a company.

When structuring an employee benefit plan, ensure that employees have some skin in the game. Employers who do not require employee contributions often witness spikes in claims payments, resulting in higher premiums that eat away at the bottom line. Workers who share in the cost of coverage are less likely to abuse the system, because their own dollars are at stake, too.

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