What is employee group insurance?

Group insurance is insurance that covers all eligible members of a group, such as company employees.

Group insurance plans are purchased by companies from an insurance provider and the plan types, costs, and terms and conditions are specific to that company. Once the company chooses a plan or plans, they are offered to employees in the form of group benefit packages which most often provide coverage for prescription and dental expenses that are not covered by government health plans. However, plans may also cover many other expenses such as vision care, hospital stay coverage, and paramedical services such as visits to chiropractors, registered massage therapists, and physiotherapists. Plans may also offer life insurance.

Who pays for employee group insurance?

Group insurance is primarily paid for by the employer, with employees making contributions toward the policy directly taken from their pay. This is called a deductible, or premium, which is the amount the employee pays for the insurance plan every month. Employees may be offered different plan options that offer more or less benefits or coverage for different premium amounts. Policies may be upgraded to include an employee’s family and/or dependants for an extra cost. Employees usually receive insurance at a reduced cost because the insurer’s risk is spread across a higher number of people.

What is a group insurance policy?

When an employer purchases this insurance from an insurance company or provider, this is a legal contract, which becomes the insurance policy, also known as a benefits plan, that an employee receives.

The policy will outline what specific benefits are included plus several other important factors, which may include:

• dates when insurance coverage begins and ends (benefit year);
• who is eligible for coverage (e.g. employee, spouse etc);
• how much coverage is provided, (e.g. whether the whole cost of a prescription drug or dental treatment, such as a cleaning or filling, is covered, or just up to a percentage of the cost);
• at what point someone becomes eligible to become a plan member (for example, after a certain period of employment usually called a ‘waiting period’);
• how much an employee’s deductible/premium is (what they pay for the plan);
• how premiums are calculated;
• how to make a claim; and
• how benefits are paid

What benefits can be offered in an employee insurance policy?

All plans are unique, however benefits found in a group insurance policy can include any of the following:

• Extended Health Care
  • includes prescription drugs
• Dental Care
• Paramedical services:
  • for example, visits to chiropractors, osteopaths, naturopaths, podiatrists, acupuncturists, registered massage therapists, speech therapists, psychologists, and physiotherapists
• Vision Care
  • coverage for eye examinations, eyeglasses and contact lenses
• Medical supplies and equipment, such as:
  • wheelchairs, walkers, canes and crutches
  • Insulin syringes
  • hearing aids
  • orthopaedic shoes and orthotics
• Extended Hospital Coverage
  • access to preferred accommodation, such as a semi-private or private hospital room if available
• Long and Short-term Disability Insurance
  • if the employee becomes disabled and cannot work, they will receive a portion of their income
• Life and Critical Illness Insurance
  • when the employee dies or becomes critically ill, the insurer pays a sum of money to one or more named beneficiaries
• Employee Assistance Programs (EAPs)
  • services may include counseling and general mental health support

Small business vs large business group insurance plans

Some insurance providers only offer plans to employers with a certain number of employees. However, generally two types of plans are offered:

• Small Business Health Insurance Plans: Less than 51 employees
• Medium / Large Business Health Insurance Plans: 51+ employees

Mandatory employee benefits

There are mandatory employee benefits, called “statutory benefits” which all employees in Canada are entitled to. These are not part of a group insurance policy and include things such as vacation, pay for statutory holidays, parental and maternity leave, sick leave and more. Visit the Employment Law section of Legal Line for more information on statutory benefits where you live.

Talk to your employer regarding what benefits they offer their employees.

Get legal help

For legal advice contact Jahanshahi Law Firm, our preferred Business Lawyer. Call 416-551-1569.

								
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