What Are The Advantages & Disadvantages Of Group Plans?

After the Covid-19 pandemic, many people have realized just how beneficial health insurance can be in combating unexpected illnesses and hospitalization. This is why most employees today seek work in companies that offer excellent Group Health Insurance Plans that cover the cost of expensive healthcare treatments, prescription drugs, hospitalization, and much more for both them and their families.  

Without health insurance, it wouldn’t be possible for many individuals to afford to pay for the high costs of healthcare. In such a situation, one would have no choice but to take money out of their savings or worse yet, take on debt. 

Not having a private health insurance plan provided by your employer can result in financial and mental stress as provincial health care plans in Canada do not cover certain prescription drugs, hospital emergencies, vision care, dental care, as well as, paramedical and ambulance services. Thus, in the event of an unforeseen accident or illness, you would be liable to pay for the health care costs which can cost thousands of dollars. 

What Are Group Plans?

A group benefits plan is a type of health insurance coverage that is offered to a group of people that work for a particular employer or organization. Group plans offer a lot more coverage than a provincial health care plan and can cover all types of health care costs including dental, vision care, prescription drugs, and emergency health care services.

Group plans can also be combined with a retirement and/or saving plan which can lead to several tax benefits and help employees achieve their financial and retirement goals. This is why most employees in Canada rank group plans amongst the top things they look for when deciding who to work for.

The Advantages & Disadvantages Of Group Plans For Employers  

Whether you are a small business or a large multinational organization, offering an excellent group health insurance plan to your employees can provide several short-term and long-term benefits. Such as:

• It can greatly help with staff retention
• It can help boost employee morale and productivity
• It can help increase employee loyalty
• It is more cost-effective than increasing an employee’s salary as adding a group plan will not lead to any additional increases in CPP, EI, or Workers’ Compensation rates.
• The cost of group plans can be written off as a business expense which can have significant tax advantages
• Offers a competitive edge over your competition allowing you to recruit and retain the best talent

The only disadvantage of offering a group benefits plan to employees for an employer is the cost of premiums. Small business owners might struggle to justify spending large amounts on employee premiums when that money could be used to help grow the business. 

Luckily, Canada offers plenty of group plans specifically designed for small business owners that can be tailored according to the needs of your employees and at a cost that is affordable and manageable for your business.

The Advantages & Disadvantages Of Group Plans For Employees

Group plans can offer employees several advantages over other types of individual health insurance plans. The biggest advantage is that a portion of the premiums for group plans are paid by the employer so such plans are made available to employees with a cost sharing component.

Group plans are also often combined with retirement and saving plans that can bring with them a whole set of other advantages. However, that doesn’t mean group plans don’t have their disadvantages. Let’s dive deeper to learn more about all the benefits and drawbacks that a group plan offers to employees.

Pros:

• Group plans don’t have any waiting period, unlike individual plans. Pre-existing illnesses are covered from the day the policy is signed by the employee.
• Group plans allow employees to add family members to the plan including spouses, parents, and children.
• Covers all maternity-related expenses and newborn baby expenses for the first 90 days.
• Top insurance providers offer streamlined claim-settling processes that ensure employees do not have to pay any expenses upfront as all medical expenses are dealt with between the insurer and health care provider eliminating the need for cash payments.
• OPD and emergency services are included in group plans.
• Helps reduce financial stress and encourages a healthier lifestyle
• Plenty of extra benefits including dental and vision care coverage as well as free consultations with specialty doctors and therapists. 

Cons:

• The policy only lasts until you work for said employer. In the event you chose to leave or are laid off you are no longer covered by the group plan. 
• You can’t customize a health insurance plan according to your individual needs. Only the employer has the ability to choose which insurance provider to go with, what coverage to get, and what features and benefits to provide.
• Depending on who your insurance provider is, the claim-settling process can be quite cumbersome and time-consuming. While many top insurance providers, such as Mc Iver Insurance, offer hassle-free claiming processes many other providers don’t. This can be especially troubling for employees that have ongoing medical treatments. 
• Group plans don’t offer any personal financial planning advantages for employees unless these plans are combined with a retirement/saving plan.  

The Right Group Plan For Your Business

Whether you are a small, medium, or large Canadian business offering the right group plan can prove to be hugely beneficial for the growth, success, and continuity of your business. By having the right balance of base benefits and specialty benefits you can offer employees a group plan that promises to take care of all future medical and health concerns. 

When seeking group medical insurance in Halifax, there is no better provider to consult with than McIver Insurance. As Nova Scotia’s most trusted group insurance broker, we tailor group plans that give your employees the protection they deserve while staying within a desired budget. Consult with our experts today to learn more!