Benefits of Group Health Insurance in Canada

Imagine stepping into a workplace that isn’t just about the job—it’s about looking out for you, too. That’s where group health insurance comes in. Think of an employee benefits plan as a safety net that protects you, and shows you that you are valued. 

Group health insurance is offered by employers to their employees and includes medical services like prescription drugs, preventive care, dental, and vision benefits. Some employers also choose to offer mental health, maternity care, and additional wellness benefits through a group health plan.

If you’re wondering why group health insurance is a good idea, this article explains its benefits and why offering group health is important.

What is group health insurance?

Group coverage health insurance is a type of insurance plan that provides coverage to a group of people, typically employees of a company or members of an organization. It offers benefits such as medical, dental, vision, and prescription drug coverage.

How does group health insurance benefit employers?

Employers are always looking for ways to boost productivity, retain top talent, and ensure their employees are well taken care of. Offering group health insurance helps achieve these goals.

By offering comprehensive health coverage, you’re showing your team that you value their health and well-being, which can go a long way in building loyalty and job satisfaction. So, when it comes to employee benefits, group health insurance policy is a win-win.

Here’s why group health insurance is important for you as an employer:

1. Enhances employee recruitment and retention

Group health insurance is a powerful recruitment and retention tool for businesses like yours. If you’re on the hunt for talented employees, the presence of comprehensive health benefits can significantly influence a job-seeker’s decision-making process.

Similarly, an existing employee is more likely to remain loyal if you prioritize their health and well-being.

2. Helps boost productivity

Offering a group health plan to your employees will reduce their worries about the financial burden, and they can focus more on their work. Employees with access to healthcare will take fewer sick days and perform better on the job.

Why? Well, when they know their group health plan covers preventive measures, like regular check-ups and screenings, they’re more likely to stay on top of their health. And when people feel good, they’re more productive.

3. Increases employee loyalty

Offering a group health plan increases your company’s appeal and makes employees more loyal towards your brand. This makes your employees feel valued and protected because they know their health is safeguarded.

4. Employer advantages

Group health insurance is not beneficial just for the employees. Offering group health insurance has a wide range of benefits for employers or companies as well. Here are some of them:

• Tax advantages: Employers can typically deduct the cost of premiums they pay for employees as a business expense, potentially lowering their taxable income. Additionally, employees’ premium contributions can be made pre-tax, reducing the employer’s overall payroll tax burden
• Compliance with legal requirements: Offering health insurance can help larger employers comply with mandates, avoid penalties, and foster a positive reputation as a compliant and caring employer
• Risk pooling: Group health insurance spreads risk among all participants, often leading to lower premiums and better coverage options compared to individual plans
• Reduction in recruitment costs: Employers can reduce the costs associated with recruiting new employees by offering attractive health benefits, which can be a strong incentive for prospective hires
• Improved health outcomes: Access to preventive care and wellness programs can lead to better overall health for employees, potentially reducing long-term healthcare costs and minimizing the impact of serious health issues on the workforce

How does group health insurance benefit employees?

Group medical insurance in Canada can really benefit employees by providing them with affordable healthcare, along with comprehensive coverage. Employees also pay lower premiums for group health insurance and can enjoy certain tax exemptions. 

1. Ensures affordable healthcare

Group health insurance gives you access to affordable medical services. By joining forces with your employers, you can benefit from negotiated group rates, reducing premiums and out-of-pocket costs. This means healthcare doesn’t strain your budget and is always within your reach.

2. Offers comprehensive coverage

Group insurance covers a range of services, from prescriptions to dental and vision care. It ensures employees have access to essential healthcare beyond basic medical needs. 

3. Employees pay lower premiums compared to individual plans

Since the cost is shared between multiple employees, group plans often have far lower premiums than an individual policy. This makes the group plan more affordable and accessible to everyone.

4. Ensures financial stability

Group health insurance covers a significant portion of your medical expenses, like hospital stays and treatments, easing the financial burden during tough times. With this security, you can focus on recovery without worrying about the bills.

5. Ensures equal access

Group health insurance ensures everyone has the same access to healthcare, regardless of health status or pre-existing conditions. While individual plans might differ, group benefits cover all eligible employees equally. 

6. Helps address severe ailments

Critical illness policies under a group health plan cover specific critical illnesses that employees may face. These policies offer extensive coverage for severe illnesses like cancer, heart disease, or organ transplants, among others.

This relieves you from the financial burden that critical illnesses impose. So, when it comes to hospitalization costs and specialized treatments, a group health plan has everything covered!

7. Group benefits offer certain tax exemptions

In Canada, some group benefits are tax-exempt. You can claim exemptions on health benefits, covering medications, dental, vision, and paramedical services, as well as on short and long-term disability insurance premiums paid by employers. 

Contributions to group registered pension plans (GRPPs) and deferred profit-sharing plans (DPSPs) are also tax-exempt.

8. Support for families

Group health insurance provides significant support for families of employees, offering various benefits that contribute to the well-being and financial stability of employees and their dependents. Here are some key aspects:

• Comprehensive coverage for dependents: Group health insurance often extends coverage to employees’ spouses and children
• Lower premiums and out-of-pocket costs: Group plans typically have lower premiums and out-of-pocket costs compared to individual plans, making healthcare more affordable for families
• Preventive care: Many group health plans emphasize preventive care, covering routine check-ups, vaccinations, and screenings
• Maternity and pediatric care: Group plans generally cover maternity care, including prenatal and postnatal services, as well as pediatric care
• Chronic disease management: Families dealing with chronic conditions such as diabetes, asthma, or heart disease can benefit from disease management programs included in group health plans

Frequently Asked Questions

Can group health insurance plans in Canada be customized to meet different employee needs?

Yes, many Canadian group health insurance providers offer customizable plans for diverse employee needs. Employers can choose coverage levels for prescription drugs, dental care, vision care, and paramedical services like physiotherapy and massage therapy. 

Some plans include optional add-ons, such as critical illness or disability insurance. Having a flexible health spending account (HSAs) also allow employees to allocate funds toward specific medical expenses.

Will I be taxed on a group health policy?

In Canada, group health insurance benefits provided by employers are generally not considered taxable income for employees. However, certain exceptions may apply, so it’s essential to consult with a tax professional for specific guidance.

What factors can affect the cost of a group health policy?

The greater the number of features included in the insurance plans, the higher the premium you’ll need to pay. If the group healthcare plan is tailored and includes additional benefits like daycare treatment and outpatient expenses, the premium will increase accordingly.