Why employee group benefits?

*Red Seal Recruiting is pleased to welcome Vernon Fischer CFP, FEA,  President of Fischer Financial Services, to share his thoughts with us as a guest author! If you are a recruiting professional and would like to submit a post on our blog, please contact kael@redsealrecruiting.com.

By providing group benefits for your employees, you can better attract and retain top talent, provide insurance at a reduced cost and help improve morale.  You can increase productivity in your workplace by providing financial security to your plan members. In fact, a study by Canada Life Group Insurance showed that 25% of respondents believe that helpful employee benefits and perks would have the biggest positive impact on their work productivity. Your premium may also be tax-deductible as a business expense.

There are generally two types of employee benefits:

Insured Plans

Can include Life, Critical Illness, Short and Long Term Disability insurance coverage, as well as Dental, Health, Drugs and Out of Country coverage. The life, critical Illness and disability programs are based on the company deciding coverage amounts, average age of the employee group, and job description. Disability coverage is one of the most important benefits as one has a fairly high chance of becoming disabled during their work life and can provide the greatest benefit, also group disability coverage is generally quite a bit less expensive then obtaining individually. These benefits are generally paid for by the employee to maintain their benefits being paid tax free.

The health, dental and drug coverage is also determined by the company, the pricing is based on plan design as well as the plans and insurance company’s claiming experience. The advantage of an insured plan is the more level pricing year to year, drug coverage can include extra ordinary coverages for really expensive drugs.

Out of country coverage enables employees and their families to travel without the need of further travel insurance. These benefits are normally paid 100% by the company, although the company can share up to 50% of the cost with the employee’s.

Non Insured Plans

Health and Wellness spending accounts, with these plans the company allots a certain amount of benefit to each employee for example $1000 on annual basis. The employee can use the health allotment for any CRA medically approved service, such as drugs, dental, paramedical, braces etc. The company pays the allotment amount, plus a 10% administration charge. The allotment and admin charge are tax deductible to the company and non taxable to the employee. These plans can also have additional features such as travel insurance, catastrophic medical coverage, critical illness and disability insurance.

Wellness accounts can also be set up for employees for such as things gym memberships and other healthy living expenses; they are tax deducible to the employer but are a taxable benefit to the employee.   The insured and non insured plans can be merged together to provide a customized, cost effective employee benefit program.

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