Group Benefits are a form of Employee Insurance. The terms are often used interchangeably. Also called ‘Group Insurance’, it offers extended health and other coverages, such as dental and paramedical (chiropractor, physiotherapist, etc) as well as mental health counselling. Group Benefits can also add life, critical illness insurance and disability insurance as well.
The idea of Group Benefits is that it covers more than one person and at a much less expensive cost than insuring each and every member of the group individually. This is especially important if a member of the group has pre-existing health conditions that make it expensive or impossible to get the insurance coverage individually.
Who is the Group? Often, it is a group of employees as part of a company health care plan, but it could be a group of persons associated in some way or another; for example, a labour union or a professional members’ association. Group benefits can also be found in non-profit organizations.
The most prevalent use of Group Benefits is Employee Insurance that an Employer offers the employees as part of their compensation package.
What are the benefits of a Group Benefits Plan?
The benefits are many – for both the Employer and Employee.
|Amount of Coverage||The coverage is also good for the management and owners of the business. The type of coverage could be separate for the owners and different for the employees.||The coverage can be substantial. Besides extended health and dental, paramedical and counselling, it can include life, critical illness and disability insurance.|
|Cost||Employer can pay anywhere from 50% to 100% of the premiums.||Employees can pick up half of the cost of the premiums or none, depending on how the plan is structured.|
|Medical questionnaire||Often does not require the employees to answer any medical questions||No medical questionnaire.|
|Taxes||Depending on the plan structure, Employers can claim the premiums as a taxable expense||Most coverages do not require Employees to declare medical coverages as taxable income. (There are some exceptions, again depending on how the plan is structured).|
Employee benefit plans can consist of:
- Dental coverage
- Prescription drug coverage
- Extended health benefits like paramedical coverages (e.g. psychologists, massage therapists, chiropractors, etc.)
- Life insurance
- Long term disability (LTD) insurance
- Weekly income benefits for Short Term Disability or sickness
- Travel insurance
- Alternative medicine (e.g. naturopaths, acupuncture)
- Mental health therapy and support
- Addiction treatment and support
Note that some insurers will also provide coverage for gender re-assignment and health support.
Besides the above traditional coverages, there are now flexible plans that can be offered as well. These include:
- Health Care Spending Accounts (HCSA); for example, a health spending card is given to the employee to pay for health services and equipment. It can be attached to the traditional health and dental plan or be a stand-alone plan.
- Wellness Spending Accounts; for example, gym memberships and other wellness programs.
How long do Group Benefits last?
Employee benefits coverage is terminated once a person is no longer employed by the contributing Employer.
Group insurance plans have to be renewed periodically. Insurance companies review the amount and type of claims that the Group enterprise submits and adjust the premium rates accordingly. Sometimes it is an increase in premiums and sometimes not. This information is also important to Employers when reviewing their health and safety programs for their personnel.
The Bottom Line
If you’re in business and you need to hire staff, you cannot go wrong in offering Group Benefits (or Employee Insurance) to your personnel. An Employer who offers a Group Benefits package as part of their compensation offering will attract good workers no matter what the hourly wage or salary being offered.Furthermore, as an owner / manager of your enterprise, you too can enjoy the same or enhanced benefits that comes with the insurance coverages. Keeping everyone healthy makes the business productive and a productive business is a healthy business, no matter what the economic climate might be.