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Group Benefits vs. Health Spending Accounts (HSA) Which is Better for Your Team

Group Benefits vs. Health Spending Accounts (HSA): Which is Better for Your Team?

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41% of Canadians receive benefits through an employer plan, whether that be through group benefits, health spending accounts, or a combination of both.

But what are group benefits and HSAs? How effective are these plans in helping attract and retain top talent? And which is better for your team?

Let’s find out!

Key Takeaways:

  • Understanding the pros and cons of Group Benefits and HSAs
  • Learning about the financial impact of employer plans on employers and employees
  • Discovering the flexibility and tax perks of each option

What Are Group Benefits and HSAs?

Group Benefits

Think of group benefits like your go-to order at your favourite pub — dependable, bundled, and satisfying. 

Traditional group benefits plans include health, dental, and vision coverage, as well as added benefits such as life insurance, disability insurance, critical illness insurance, and accidental death and dismemberment, all wrapped up in one comprehensive plan.

Companies and businesses that offer group benefits tend to be more appealing to employees than those that don’t. 

Not too long ago, only larger companies offered group benefits, as these plans were traditionaly expensive and complex. 

However, with the help of plans like Medavie Blue Cross, group benefits are now attainable for businesses with even 2-10 employees, allowing businesses of all sizes to protect their most prized assets, their employees.

Health Saving Accounts (HSAs)

HSAs are a bit different. They aren’t as comprehensive, complex, or expensive as group benefits, but allow for more flexibility and cost control.

Think of HSAs like giving your employees a healthcare gift card that they can use however they want — from massages and therapy at a Dartmouth wellness clinic to new glasses from a Halifax optometrist, there are no restrictions.

The way HSAs work is similar to any savings account. You (the business owner) set a yearly allowance, say $1,500 per employee. Employees can then spend their allotted allowances on eligible medical expenses up to that dollar amount.

HSAs have been gaining a lot of popularity recently as they offer a more simplistic, affordable, and tax-advantageous way for small to medium-sized businesses to provide employees with flexible health benefits. 

The Benefits & Drawbacks of Each Plan?

Group benefits and HSAs come with their own set of pros and cons.

Pros: Group Benefits Plan

  • Offer much broader coverage, including life insurance, disability insurance, etc.
  • The beefier the benefits plan, the more appealing it is for employees, which helps employers with talent acquisition, improved retention rates, and greater loyalty. 
  • Premiums are fixed for the year, which makes budgeting predictable and easier for employers.
  • Benefits are received tax-free for employees, and contributions made are tax-deductible for the business.

Cons: Group Benefits Plan

  • Tend to be more expensive than HSAs, as traditional group benefits usually offer added coverage such as life insurance and disability insurance.
  • Premium rates are revised annually, making predicting cost year-over-year challenging, especially for smaller businesses.
  • Less flexibility and customization options for employees as plans are generally predefined.
  • Come with age restrictions. Employees over 65 are usually not covered or have reduced coverage.
  • Plans can be complex with a lot of fine print that makes it difficult for most employees to fully understand the benefits they are entitled to.

Pros: HSAs

  • Funds can be used for a wide range of health-related expenses.
  • Offers inclusive coverage as it doesn’t restrict benefits based on age or pre-existing medical conditions.
  • Fixed contribution amounts make predicting costs a lot easier for employers.
  • Employers only pay for expenses incurred, thus avoiding paying for unused coverage, which is often the case with group benefits.
  • Benefits are received tax-free for employees, and contributions made are tax-deductible for the business.
  • Straightforward, flexible, and highly customizable.

Cons: HSAs

  • Does not offer any type of insurance to cover unexpected and large medical expenses.
  • Not as appealing to employees as group benefits.

What Does Each Plan Cost You as an Employer?

While it is true that traditional employer group benefit plans were a lot more complex and often too expensive for small businesses to consider, this is no longer the case.

There are plenty of insurance providers today that offer tailor-made group benefit plans for smaller-sized businesses that are competitively priced, offer extended health benefits, include no deductibles or lengthy medical forms, and are completely digitized, making them easy to navigate, set up, and manage. 

As far as how much group benefits cost? That depends on many factors that are best discussed with a professional. Click here to book an appointment or request a free quote. 

On the other hand, when it comes to HSAs, you call the shots. You set the budget and that’s it. That’s your total spend. No unpleasant premium hikes to worry about. 

Which is Better for My Team?

That depends on the size of your business, your budget, and your employee needs.

Group Benefits can be ideal if you predominantly have employees with families, as comprehensive coverage can act as a huge incentive for them to stay long-term. 

HSAs are ideal if you have a smaller business that hires younger employees who aren’t married or have children. Group benefits wouldn’t add much value to such a demographic, but having an allowance that allows them to choose how they want to spend their health dollars can be a lot more appealing.

Team size matters as well. So does budget.

Small local businesses often love HSAs as they are simple, affordable, and easy to manage and control. However, as your business grows, investing in a group benefits plan can almost become a necessity, especially if your competitors are already offering it to their employees.

What About a Hybrid Model?

If you are still undecided on which plan is best, you can opt for a plan that includes a combination of the two. 

A hybrid model allows you to offer employees an HSA with insurance add-ons or group benefits with an HSA, often referred to as a Health Care Spending Account (HCSA).

Offering a hybrid model can have many advantages, as it can offer basic insurance coverage but also greater flexibility in terms of how employees can spend their health allowance.

This model is gaining traction as it offers a win-win solution for both employees and employers. 

Give Your Team the Protection They Deserve!

Whether you are considering group benefits or HSAs for your business, consult with a trusted group insurance broker.

An insurance broker can help your business find a benefits plan that is the right fit for you and your employees. 

At McIver Insurance Inc., we specialize in group benefit plans for small to medium-sized businesses in Nova Scotia. We’re local, experienced, friendly, and know what works for Nova Scotia businesses. 

Book a call with us today to learn more!

FAQs

Q1) What’s the main difference between Group Benefits and HSAs?

Group Benefits offer comprehensive coverage, including insurance, whereas HSAs are simply a health allowance that employees can use on health services that matter most to them.

Q2) Are there tax advantages? 

Both plans offer tax deductions for employers and tax-free reimbursements for employees.

Q3) What should small business owners consider?

They should consider the employee needs, budget, team size, competition, and future goals. 

Mental Health and Life Insurance Policies

Mental Health and Life Insurance Policies

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Having a mental health condition calls for being weary of many things. But what you must keep in mind is the fact that mental health is not a destination but a journey.

Since 2001, the mental health and life insurance industries have been working together to develop adequate life insurance outcomes for people struggling with mental health disorders.

With that in mind, people with mental health conditions can also have their insurance coverage. However, every condition and country calls for its terms to make life insurance claims.

In Canada, the good news is that mental health conditions don’t slam the door on life insurance coverage, but the key to qualifying for a life insurance claim is honest disclosure of the severity of your conditions.

In this article, we’ll be going over something crucial but often overlooked — mental health and life insurance. So, without any further delay, let’s explore the different life insurance policies for people with mental health conditions.

Let’s get to it!

Do Mental Health Conditions Affect Life Insurance Coverage?

When you apply for life insurance coverage, your mental and physical health will be examined. So, as uncommon as it may sound, it is, in fact, totally normal, and the insurers are used to it.

You will be asked to fill out a questionnaire or submit a medical exam. Why, you may ask — it is because a series of factors like the severity of your mental health condition, how it impacts your income and lifestyle, ongoing symptoms, and other such stuff will determine whether you qualify for the life insurance policy or not and to what extent. 

However, certain medical conditions like anxiety will not have as many premiums as severe conditions like schizophrenia will have and they will affect the kind of coverage you get in your life insurance policy.

Keep in mind that the terms and conditions offered will vary based on the country and company offering the insurance. This is why it’s important to get quotations from various resources before choosing one.

Lying About Your Condition On Your Insurance Application: The Flipside

Withholding information or lying on your life insurance application is a NO-GO, and can lead to major consequences. 

Once you claim your condition, that information will be legally assessed. If found inaccurate or untrue, it can lead to consequences like the insurer cancelling your policy or refusing to pay your claim without refunding any of the premiums you’ve paid.

Hence, you do not lie regarding anything on your insurance application. To get the best out of it, you must keep it real.

Remember, “Disclosing your mental health shouldn’t be a barrier to getting the life insurance coverage you need. We believe Canadians with mental illness deserve fair access to life insurance products.” – The Canadian Life and Health Insurance Association

What Mental Conditions Are Considered By Life Insurance Companies?

Every individual is worthy of a life filled with fulfilment, and the same goes for individuals struggling with mental health conditions. Almost all the insurance companies are stepping up and considering people struggling with mental illnesses. Some of the most common conditions considered by these companies are:

  • Anxiety
  • Bipolar Disorders
  • Obsessive Compulsive Disorder
  • Eating Disorder
  • Schizophrenia 
  • Psychosis
  • Attention Deficit Hyperactivity Disorder
  • Borderline Personality Disorder

These are not just names on the list anymore or something to be shrugged away. Insurance companies these days fully consider individuals struggling with these conditions and work to give as much as fair outcomes as they can.

Does Ongoing Medical Treatment Affect Life Insurance?

The role of ongoing mental health treatment and the impact of medications also play its role and increase the odds of securing a life insurance policy. For instance, if you’re seeing a mental health professional or are under treatment with medications, the insurers may increase your coverage, and it also increases your chance of getting favourable terms.

What Are The Different Life Insurance Options For Mental Health Conditions?

It is said that your mental health struggles do not define your future. With that in mind, you should know that you are rightful enough to secure a future for your family and yourself. There are different life insurance policies for people struggling with mental health conditions. Some are better than others, and their eligibility, budget, and period vary.

  1. Term Life Insurance:

Term Life insurance is an insurance policy that lasts for a certain period, usually ranging from five to thirty years. This is especially suitable for younger people with less severe conditions than others.

  1. Permanent Life Insurance:

The term is pretty self-explanatory and is your ride and die. Permanent life insurance is an insurance policy that lasts your entire life as long as you keep paying the premiums. However, it is more expensive than other insurance.

  1.  Guaranteed Life Insurance: 

This is your guaranteed policy. It also requires no medical exam. However, it is the most expensive one out there.

  1. Group Life Insurance: 

This is the life insurance that is specifically for employees. If you are someone with mental health conditions and working in a company that offers insurance coverage, this policy is for you. It also requires no medical exam to qualify and lasts for as long as your association with the company.

Make Informed Decisions With McIver Insurance

Having a mental health condition does not exclude you from the normalcy of life. This is why the insurance sector is working to offer the best outcomes to every individual.

Having life insurance is a perfect shot at having peace of mind and a secure future and has many benefits. However, since the industry is ever-evolving, it is important to consult experts to ensure that you are not exploited.

At McIver Insurance Inc., we prioritise our customers first and are a renowned name in all of Halifax, for we believe that your future can be fearless if you secure your today.

With that in mind, waste no more time and give us a call at 1-902-220-3279 or email at [email protected] to get life insurance policies tailored to your needs.

Insurance Riders and Additional Cover

Insurance Riders and Additional Coverages

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Insurance policies offer a great deal of comfort to many people, as they offer a safety net for families in the event of any tragic event. However, insurance policies can cost a good deal of money and not all policies will offer full coverage.

Luckily, with time people have become a lot more aware of their needs and are proactive in their approach, and, with increasing competition, insurance providers looked to offer more options to customers.

This is where insurance riders come in, giving customers more control over the specific types of coverage they can have under their insurance policy. This comprehensive guide is to educate you on insurance riders, their benefits, and the different types of insurance riders you can choose from.

What Is A Life Insurance Rider?

In a nutshell, riders are additional benefits and coverages that can be purchased, to be added into the umbrella of your basic insurance coverage. By getting supplemental coverage through these riders, you stay even further protected from specific unfortunate events.

For example, in the event of your death, your insurance policy will offer a payout, but if you were to be a victim of a serious injury and were to be disabled as a result, there isn’t much your policy would do for you. If such an insurance policy had a disability rider attached to it, then you would see benefits that could help you with treatment costs and maintenance.

Traditionally, those looking for extra coverage would have to invest in multiple policies, but with insurance riders, you can customize your policy to the point where you have as much coverage as would make you comfortable, and not worry about investing in another policy.

Benefits Of Insurance Riders

Better Coverage

A life insurance policy will only offer benefits in the event of death, but it’s possible that the death was caused by an event that resulted in prolonged hospital stays and treatments. 

Your life insurance won’t offer coverage specifically for that and, if you choose to pay your hospital bills using the benefits from the life insurance policy, then you’re left with less money that your family can use to maintain their quality of life and meet expenses.

Riders offer coverage for such matters and you could even ensure you have coverage for your hospital bills, any treatments, and even if you don’t die and are afflicted with a disability.

Peace Of Mind

Riders can offer you and your family a lot of peace of mind as well. Death isn’t the only situation where a family might need financial support for the coming years.

Disability, terminal illness, and serious injuries can also require the same financial security, not just for the family’s sustenance, but also for the hospital bills resulting from such disability, illness, or injury. With insurance riders, you find just that! 

More Than Just Payouts

A basic life insurance policy will give you a payout in the event of death, but with riders, you can get additional benefits. For example, with a child education rider, the insurance policy would give a payout for the death of the insured AND further coverage for your child’s education costs.

Types of Riders

While there are many different types of insurance riders, we’re going to go over some of the more popular ones, to give you an understanding of how they work and exactly what benefits can be offered.

Waiver of Premium

This is one of the most common insurance riders that people opt for in Canada. If you have this rider attached to your life insurance policy and you are a victim of an injury and subsequent disability, then your insurer will waive your premium payments, while still keeping the insurance policy intact. 

This means you won’t be paying for any premiums but your family will still receive benefits from the insurance policy in the event of your death. The waiver will also apply to any other riders you may have purchased and you won’t be required to make any payments for coverage under those riders.

However, one thing to keep in mind is that every rider policy will have a different definition of “disability”, so thoroughly read your policy to make sure you’re properly covered.

Accelerated Death Benefit

This rider pays out a portion of your death benefit in the event of a terminal illness. In most policies, you’ll be entitled to withdraw up to 50% of your death benefit, or $250,000, whichever is less.

Also, you should know that there aren’t any conditions as to where you can spend the money that you withdraw as your insurance provider will not normally ask for receipts or proof of expenditure. You can use this amount to cover hospital bills or any other expenses, but keep in mind that whatever amount you withdraw will be that much less money that your family will receive in the event of your death. 

As with the premium waiver rider, make sure what your policy defines as a “terminal illness” to ensure you have the proper coverage.

Hospitalization Income

This insurance rider offers a fixed income for each day that you’re in the hospital, which can help out with a lot of expenses around the house, fuel costs of the family running to the hospital and back, or with babysitters for the kids while you and your spouse are at the hospital.

There will be a cap on the total amount that is paid and the number of days in the hospital, so be sure to read the policy in detail to make sure.

Which Insurance Rider? Talk To An Expert!

The type of rider you get depends entirely on your needs and circumstances. However, it is highly recommended to speak to an expert before selecting a rider on your policy. 

Insurance experts such as those at McIver Insurance, can guide you on what insurance riders (if any) would be best suited to your needs and the impact each rider can have on your overall coverage and policy.

What Are 5 Examples Of Employee Benefits

What Are 5 Examples Of Employee Benefits?

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Let’s face it, most of the time, people are looking for jobs, either, because they don’t have one, or are searching for one that offers higher pay. 

However, for many Canadian job seekers, higher pay isn’t always the most attractive incentive for choosing one company over another. Employee benefits can in many ways outweigh a bump in salary or rate per hour.

In this article, we will look at five employee benefits that can on many occasions be more appealing than a pay increase.

5 Examples Of Additional Benefits For Employees In Canada

All Canadian employers are legally entitled to offer their employees benefits such as contributing to the Canada Pension Plan (CPP), job-protected and paid legislated and parental leaves, Paid Time Off (PTO), Employment Insurance (EI), and eye exams and vision care. 

However, there are many supplementary benefits that an employer can offer to help sweeten the pot. Benefits such as medical and dental coverage, life insurance, an additional tax-free retirement saving plan, extended health care, child care, educational benefits, and more can all help entice the best candidates possible to fill a job position. 

Offering these employee benefits can also help an employer improve retention rates, and create a happier and more productive working environment for their employees. 

So, let’s take a look at these benefits in more detail and see whether they would be a viable fit for your business.

Medical & Dental Coverage

Offering an extended health coverage plan has become increasingly popular amongst employers. Canada’s government health care program doesn’t cover medical expenses including prescription drugs, hospitalization costs, ambulance services, and dental coverage.

This is the main reason why more than 90% of Canadian employers offer an extended private group health plan to employees. An extended health coverage plan covers medical expenses not included in Canada’s provincial health plan. These plans can also include partial or full dental coverage making them hugely appealing. 

Life Insurance

What’s the most important thing that is common for almost all employees? Their families, of course! This is why many Canadian employers offer a life insurance plan to employees as the continued financial security of their family is always going to be a top priority.

By contributing to a life insurance plan employers help safeguard the future of employee families offering them further peace of mind. 

Apart from life insurance, some Canadian employers also offer disability insurance and other mental health benefits. These added perks can go a long way in attracting the best talent, especially, for dangerous and highly stressful jobs.   

Employee Stipends For Fringe Benefits 

Instead of offering a wide range of benefits that can be overly complicated for employees to understand and seldom used, many employers now prefer to offer employee stipends instead.

This form of benefit offers an employee a monthly allowance that can be used to cover health, wellness, and lifestyle expenses such as gym memberships, spa/massage therapy sessions, and tuition fees for various skill-enhancing courses. 

Stipends are a great way to offer flexibility in your benefits package as employees have free reign over how they want to spend that money. An example of a stipend could be a Health Care Spending Account (HCSA) which allows employees to spend tax-free money on medical expenses. 

For employers that have a diverse workforce demographic, offering a stipend instead of a traditional benefits package can be an excellent way to accommodate the varying needs of all their employees. 

Childcare

If you have a workforce that predominantly consists of parents, adding a childcare plan to your existing benefits package can be hugely appealing to your current and future pool of employees.

Childcare in Canada can be quite expensive, so an employer that offers childcare can be a highly attractive incentive, especially for young parents. 

Registered Retirement Saving Plans (RRSPs)

While Canadian employers and employees are both legally obligated to pay 5.25% of their salary to the Canada Pension Plan (CPP), or the Quebec Pension Plan (QPP), many employers offer additional retirement saving plans to attract highly skilled employees.

The RRSP is the most popular of these employer-sponsored retirement contributions. An RRSP is a tax-free retirement saving account where employees can save up to a maximum of CAD $27,830 annually. 

Any RRSP contribution an employee makes is often matched 100% by the employer. This can make this a hugely attractive and lucrative benefit for highly paid and highly skilled talent.

Different Ways To Structure A Benefits Plan

Now that you have a fair idea of the additional benefits that could prove attractive for your workforce, it is time to choose a structure that compiles these benefits into a comprehensive benefits package that will help attract and retain top talent. 

There are essentially two types of structures that can be used; an organization-oriented benefits structure, and/or a consumer-oriented benefits structure. 

In an organizational-oriented benefits plan, employees are offered a select list of employer-defined benefits. The employee then has a choice of whether to opt for the plan or not. Examples of such a structure include traditional group health insurance plans, retirement plans such as 401(k), and employer-chosen wellness programs. 

In a consumer-oriented benefits structure, the employees have free reign over what benefits they would like to spend on. Employers offer a stipend or monthly allowance and employees are free to use that money on whatever benefits they see fit. Examples of consumer-oriented benefits include HSAs as discussed earlier, as well as medical reimbursement plans such as a Health Reimbursement Arrangement (HRA).    

Choosing A Group Benefits Plan That Works For Your Firm!

Whether you are a large business or a startup, having the right benefits plan in place can make all the difference when it comes to attracting the best talent. 

This is why it is highly recommended that you speak to a reputed employee benefits brokerage company, such as McIver Insurance, that specializes in creating group benefit plans that meet the demands and needs of your employees without burdening business finances. 

To learn more, give us a call at 1-902-220-3279.

What are The Tax Implications of a Family Life Insurance Policy

What are The Tax Implications of a Family Life Insurance Policy?

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Buying a life insurance policy is much like buying a home or a car for the first time. It requires careful deliberation and consultation with experts to help you make a more informed decision.

If you are considering investing in a life insurance policy you may feel that the more you dig the more you learn and the more you uncover. While many people consider life insurance to be a tool to help safeguard your loved ones from financial distress there is a lot more to life insurance than just that. 

Take tax, for example. Depending on your life insurance policy you could be faced with different types of tax implications for both you and your loved ones. 

As such, you may be wondering, do you have to pay tax on your insurance proceeds, or will your beneficiaries be liable to pay tax upon receiving the allotted death benefit? 

These are all valid questions and we are here to answer all of your tax-related queries. So, let’s get to it!

What Is A Family Life Insurance Policy?

A family life insurance policy is essentially a comprehensive insurance coverage plan that includes permanent life insurance, term life insurance, critical illness insurance, disability insurance, and children’s term insurance. 

This form of insurance plan offers comprehensive coverage for the policyholder and their family members, ensuring the family’s continued financial stability even after the policyholder passes away or is unable to earn an income. 

The beneficiaries can use the insurance payouts of a family life insurance policy to pay off any outstanding debts, cover funeral costs, meet monthly expenses, pay for children’s schooling, and much more. 

Is A Family Life Insurance Policy Taxable?

The payout received from a life insurance policy in Canada isn’t subject to any income tax in most cases, whether that be the premiums you pay or the benefits or payouts that you or your beneficiaries receive. It is all tax-exempt!

In fact, according to Canadian tax law, most types of inheritances and gifts aren’t taxable regardless of how expensive or valuable the gift or inheritance is.

As such, beneficiaries receiving a death benefit don’t have to report it when filing their Canada tax return, no matter the size of the amount they receive, as is the case for gifts and inheritance. 

No estate inheritance tax has to be paid by beneficiaries or heirs as any liable tax is paid by the estate itself. 

However, in certain situations, a life insurance payout can be taxable. Here is how.

Instances When A Life Insurance Payout Is Taxable

A family life insurance policy is often made up of a combination of policies including term and permanent life insurance. 

Permanent life insurance policies differ from term life policies as they have no definitive term and can be held for life. However, that isn’t the only difference. 

These policies also offer policyholders the opportunity to accumulate cash value on the premiums they pay. In such a case, a portion of the premium amount is saved in the policyholder’s cash value account where the money is invested to earn interest and grow. 

While the gains you make aren’t taxable, similar to an RRSP or TFSA, if you choose to surrender the policy and receive its cash value or withdraw the money in your cash-value account, you will have to pay taxes on any gains that your investments have made. 

To calculate this you simply have to total what you have paid so far in premiums against what you have received. The difference is the amount you will have to pay tax on. 

This is also the case for your beneficiaries. While the death benefit they receive isn’t taxable, any gains or interest earnings from the policy will be taxable as income and must be reported to the CRA when filing a tax return.  

If you are a beneficiary of a permanent life insurance policy and aren’t sure whether you have to pay tax or not, just remember this simple rule:

 If the payout you receive has come with a T5 slip from your insurance provider, you will have to report those earnings on line 121 of your tax return. 

If you don’t get a T5 slip and just a lump sum amount after filing an insurance claim, you don’t have to report any of that money to the CRA.

Frequently Asked Questions

Q) Are life insurance premiums tax deductible?

Life insurance premiums aren’t subject to any income tax, sales tax, or estate tax, and as such they are not tax deductible. However, if you are a business owner and you consider the premiums you pay for your employees as a business expense, then premiums can be considered tax-deductible.

Q) What are the tax implications of borrowing against a policy?

Borrowing money against your life insurance policy is generally tax-free. However, if your policy lapses or you don’t repay your loan the amount borrowed will then be subject to tax just like any ordinary loan. 

Q) Do you have to pay taxes when transferring a life insurance policy?

In most cases, you don’t have to pay any tax when transferring ownership of a life insurance policy. However, you do have to be careful about transferring ownership of a life insurance policy as it can have estate tax implications. Always consult with an Insurance Advisor before considering a transfer of ownership.

Consult With A Life Insurance Advisor To Learn More!

The type of life insurance plan you choose can have significant tax implications for you and your loved ones. As such, it is always best to consult with the experts before opting for a coverage plan.

The type of coverage plan you need may be quite different from someone else and an expert can help you find that right balance between coverage and cost. 

At McIver Insurance, our Halifax Life Insurance Advisors have years of experience and extensive knowledge of the tax implications that a family life insurance policy can have on a policyholder and beneficiaries. 

For more information and guidance give us a call at 1-902-220-3279 or email [email protected]

What Perks Can I Give My Employees

What perks can I give my employees?

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Being the owner of a start-up or small business can bring with it a multitude of challenges. No matter how sound your business plan may be, there are always unforeseen obstacles that can stand in the way of success. One such obstacle, faced by many Canadian business owners, is the issue of attracting and retaining key employees.

The number of vacant job positions in Canada has never been higher with nearly 1 million vacancies in May of 2022 alone. This lack of labour supply has made it essential for employers to do whatever it takes to attract and retain the best talent to gain a competitive edge in the market.

After the Covid-19 pandemic, the labour market has also changed drastically. Today, employees value health and wellness, work/life balance, and less workload stress more than ever before. As such, most corporations, companies, and businesses have found the addition of perks and employee benefits to be amongst the most valuable and successful ways of attracting and retaining talent within the organization. 

So, if you are a business owner, struggling to attract new applicants, or retain existing staff members, offering a comprehensive benefits package to your employees can help resolve these issues. To learn more about what a comprehensive benefits package is and how it can help? Read on!

The Most Common Types Of Perks You Can Offer Your Employees

According to Canadian labour laws, employers have to provide their employees with certain mandatory/statutory benefits. These benefits include pension plan contributions, legislated and parental leaves, Paid Time Off (PTO), Employment Insurance (EI), and bi-annual eye exams. 

However, many companies go well over these mandatory benefits and provide a range of supplementary benefits or perks that focus on covering health and wellness expenses, saving for retirement, and funding for personal growth. These added perks are a great way to increase employees’ overall satisfaction, loyalty, and productivity, as well as, care for their mental and physical health needs.

Health Insurance

Health insurance is offered by approx. 90% of all businesses in Canada according to a Humi survey and is one of the most common types of added perks that can make a benefits package that much more attractive. 

Health insurance covers all medical expenses that are not covered by your provincial health plan. This includes emergency room costs, prescription drugs, and doctor visits. 

Disability Insurance

While health insurance is a common perk, disability insurance is something that is only offered by fewer than 50% of Canadian businesses according to a Newswire report. By adding a disability insurance plan to your current benefits package employees can feel a lot safer about their and their families future making them a lot less likely to leave.

Disability insurance can be added to an existing group benefits plan and can become one of the most valuable perks of any employee benefits package.  

Dental & Vision Care

Many Canadian employers also offer dental and vision coverage as an added perk. As we all know, dental and vision care costs in Canada can be incredibly high. Having this coverage is a highly attractive perk that is certain to attract the best talent to your organization. 

Dental and vision care plans are affordable and can be easily tacked on to any existing benefits plan to provide your employees with something that the rest of your competition may not be offering.

Life Insurance

Life insurance is just as meaningful to employees as disability insurance. A company that offers a life insurance policy in its benefits plan is a company most employees would want to stick with! 

A life insurance policy helps protect your loved ones financially in case of your untimely demise. A company that offers to contribute to a life insurance policy or pays for it outright as an added perk can be a hugely attractive incentive for all employees. 

Child Care

Even though child care is provided by the Canadian government, it doesn’t cover all of your children’s expenses. This is why some companies that have a majority family-oriented staff, offer added childcare benefits such as paying for daycare and extra PTO for parents. 

Registered Retirement Saving Plan (RRSP)

In a recent survey by Nest Wealth, it was found that nearly 70% of employed Canadians agreed that they would leave a company that doesn’t offer a retirement saving plan for one that does. Companies that offer Group RRSP plans have happier, less stressed, and more loyal employees.

Working From Home & Flexible Schedules

The dynamic of the labour industry has changed dramatically after the pandemic. Today, more and more companies allow employees flexible work schedules and work-from-home days which wasn’t as common pre-pandemic. Offering flexible working schedules and remote working opportunities can be a great perk for workers seeking a better work/life balance. 

Family Leaves & Paid Holidays

Amongst the most requested perks by employees in today’s job market are paid maternal and paternal leaves. Companies that offer this perk are amongst the ones that tend to attract the top talent. Some companies go as far as offering paid family leaves to allow employees to spend additional time with their families to maintain better work/life balance.  

Student Loan Repayment Plans & Tuition Grants

In the pursuit to attract and retain the best talent, many companies offer employees tuition grants for courses, certifications, and degrees that can help improve their skills, knowledge, and expertise in their field of work. 

For companies that tend to hire a lot of recent graduates, offering a student loan repayment plan that helps pay off a portion of the employee’s student loan can be an excellent perk to attract the best fresh talent available in the market.

Setting Up A Group Benefits Plan To Give Your Employees The Protection They Deserve!

The best way to attract and retain the best talent is to provide them with a benefits package that is good to pass. However, getting the right benefits package that not only meets your employees’ needs but also the businesses’ budgets is easier said than done. 

That is why many small and medium Canadian business owners rely on McIver Insurance to provide their employees with the most comprehensive benefits package possible, that is market competitive and meets budget requirements.

To learn more or get a free quote call now at +1-902-220-3279.

What Should Be Included In A Benefits Package

What Should Be Included In A Benefits Package?

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An excellent group benefits package can act as a great incentive for attracting potential talent as many employees, especially after the recent pandemic, put greater value on employer benefits that include health insurance, disability insurance, life insurance, and even retirement benefits. In fact, many employees would consider taking a pay hit if it means landing a job that offers a comprehensive benefits package.

A benefits package is essentially something that is added to your base salary but it can in many ways be a lot more valuable in the long run. Certain companies may offer a much better base salary but with few or no benefits, whereas other organizations may offer a lesser base salary but with an excellent benefits package. 

How do you decide what’s the better offer? Well, it is important to first break down exactly what is included in a benefits package being offered by an organization in order to gain a better understanding of its true value. 

If you are an employee looking for a job or have offers from different organizations but are confused as to which one would be the best fit for you we are here to help. In this article, we will break down exactly what should be included in a benefits package to make it more attractive and valuable. 

What Should Be Included In A Benefits Package?

Not all benefit packages are the same. In fact, each plan offered by a company can be tailored differently and include different types of benefits that may or may not be relevant to you and your needs.

Most standard benefits packages include basic health insurance, some form of retirement saving plan, and vacation pay. 

Comprehensive benefits packages offer a lot more and are much more valuable. They include full health coverage for dental, vision care, prescription drugs, and medical emergencies. These benefits packages also include paid time off, disability insurance, life insurance, and various retirement packages. 

However, that’s not all! Some companies also offer additional perks and benefits such as stock options, profit-sharing, housing assistance, child care assistance, tuition reimbursement, and much more on top of the basic or legally mandated benefits.

Comprehensive benefits packages are therefore a lot more valuable than a basic group benefits plan and can greatly incentivize employees to stay loyal to an organization as the longer they work there the more they have to gain. 

Legally Entitled Benefits That All Employers Must Provide In Canada

Full-time employees in Canada are guaranteed the following legally entitled benefits.

  • Paid Time Off – Includes a minimum of two weeks of paid time off per year for employees with at least one year of employment. This increases to three weeks’ pay after five years, and four weeks’ pay after 10 years of employment.  
  • Canada Pension Plan – Both employers and employees have to legally contribute to the CPP. Employees have to pay 5.25% of their total salary to the CPP with another 5.25% being matched by their employer.
  • Minimum Wage & Overtime Pay – An employer is entitled to pay their employees at the very least minimum wage as well as any overtime pay. If an employee works over 40 hours or 48 hours in some provinces, any time worked over that limit will be paid out at a multiple of 1.5x.
  • Personal Leave – Employees that have worked for an organization for over three months are entitled to take any form of personal leave if needed and be paid for this leave for up to 3 days.
  • Maternity Leave – Employers must provide female employees with at least a minimum of 15 weeks of maternity leave and 27 weeks of shared parental leave. Employers do not have to pay for the leave as Canada’s government programs cover the expenses.   

Additional Benefits That You Should Be Looking For

Legally entitled benefits are the bare minimum that every employer has to offer to their employees. However, most businesses in Canada offer their employees a lot more than just legally entitled benefits. 

Private Health Insurance

Even though Canada offers public health care plans for all its residents these plans do not cover a lot of medical expenses such as certain prescription drugs, hospitalization, dental care, vision care, and even paramedical and ambulance services. 

This is why many employees only seek employment with companies that offer excellent private health insurance plans that offer full coverage of almost all types of medical expenses for both themselves and their loved ones.

Long-Term Disability Insurance

Comprehensive benefits packages often include long-term disability insurance that helps protect employees from a case of loss of income in the event of a permanent disability. 

Health Care Spending Accounts (HCSA)

Many employers also offer their employees an HCSA that allows them to pay for medical expenses not covered by their private health insurance or group plan with tax-free money. 

Retirement Savings Account

The most popular benefits package offered by employers also includes an employer-sponsored retirement saving plan such as the Registered Retirement Savings Plan (RRSP). Many employers encourage employees to deposit as much as possible in their RRSP accounts by offering incentives such as matching their payments which in turn enables them to double their retirement savings. 

Tailoring The Best Benefits Package For Your Canadian Business

Why are benefit packages becoming increasingly popular in Canada’s labour market? Well, the answer to that is simple. A comprehensive benefits package offers employees peace of mind knowing that if anything were to happen to them their loved ones would be taken care of financially. Providing additional benefits can also be the key to attracting the best talent and retaining highly skilled and valuable employees. 

However, the more benefits an employer offers the greater the premiums or the costs attached. Therefore, the right balance has to be struck between what a business can afford and what’s most important for that business’s employees. To help strike the best balance it is always best to consult with the experts and for Canadian business owners, especially, the ones in and around Nova Scotia there is no one more trusted or renowned than McIver Insurance. 

We offer insurance plans for businesses of all sizes and work with business owners to offer the best benefits possible to their employees. Give us a call today to speak with one of our experts and help set up the best group medical insurance plan for your Halifax business! 

What Are The Advantages & Disadvantages Of Group Plans

What Are The Advantages & Disadvantages Of Group Plans?

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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!

How Much Do Benefits Cost Employers

How Much Do Benefits Cost Employers?

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For business owners that are struggling with employee retention or finding ways to boost employee morale, offering a group benefits plan can be a great way to solve both these problems. 

There is a lot more to keeping an employee happy than just paying a salary. Added benefits and perks can make a job offer that much more attractive and incentivize employees to stay loyal to the business for many years to come.

Group Benefits and Group RRSP plans make for the ideal tools to bolster employee retention, employee wellness, and employee morale. Although these benefits do come at a cost to the employer, the advantages they offer far outweigh the cost. 

In this article, we will take a closer look at what group benefits entail, how much they cost, and what advantages they can provide to the growth and success of a business.

The Expected Cost Of Benefit Plans For Employers

The average cost of a benefits plan can depend greatly on the size of the business (no. of employees) and the type of plan one opts for. 

Generally speaking, for medium-sized businesses, you can expect annual premiums for group benefits to equate to about 15% of payroll. For large businesses and corporations, the average percentage is closer to 30% of payroll. 

According to a survey, conducted by the Conference Board of Canada, it was found that the average cost of providing benefits to a full-time employee equates to about $8,400 per year. As such, benefits can amount to a significant expense for Canadian companies but at the same time are almost necessary in order to keep employees happy, healthy, loyal, and motivated.

Average Cost Of Benefits For Small Business Owners

If you are a small business owner, offering benefits that can cost such absorbent amounts can seem well beyond your means. However, don’t lose hope just yet!

Companies such as McIver Insurance, in association with Medavie Blue Cross, offer group benefit plans that are designed exclusively for small businesses that operate with 2-10 employees.

These group benefits can cost as less as 1% to 5% of payroll and are an extremely affordable and beneficial way for small business owners to help retain their most valued employees! 

Employers also don’t need to bear the full cost of benefit plans. In fact, in Canada, employers are only legally obliged to pay 25% of the total cost of the plan, with the other 75% being paid by the employee.

Top Tip: Bundling a group benefits plan with a group RRSP plan can also lead to further savings and advantages for both the employer and employees.

The Advantage Of Group Benefits For Employers & Employees

The greatest advantage of offering group benefits is that it helps attract and retain employees. An employee is much more likely to choose to work for a business or company that offers group benefits than one that doesn’t, even if it means being paid a lower base pay.

This is because group benefits offer employees health coverage as well as insurance, giving them peace of mind, knowing that if something were to happen to them, their dependents will be taken care of. Furthermore, benefits such as a group RRSP plan also mean that they are able to save up for retirement. 

All these benefits are crucial factors when it comes to deciding on a job offer and more times than not the business that offers the best benefits is the one that an employee is most likely to choose!

Thus, as a business owner, offering group benefits can provide a competitive edge when it comes to hiring and retaining the best talent available. Individuals are much more likely to want to come work for a business that offers a range of benefits than a competitor that doesn’t offer the same benefits.

By offering health, dental, vision, and drug coverage employees are much more likely to maintain their health as regular visits to the doctor and routine dental checkups won’t cost them any money. This can result in fewer sick days and improved employee satisfaction. A healthy workforce is a productive workforce and providing such benefits is only in the best interest of the business. 

Group benefits can also provide certain tax optimization benefits for employers as all costs incurred are tax deductible. 

All of these advantages make benefits a win-win solution for businesses of all sizes! If your business can afford it there is no reason why you shouldn’t offer benefits to your employees. 

Frequently Asked Questions

Q) What Are The Most Common Types Of Benefits Offered By Canadian Companies?

The most common types of benefits offered by Canadian companies include; life insurance, health insurance, critical illness insurance, disability insurance, out-of-country insurance, accidental death and dismemberment (AD&D) insurance, as well as, coverage for prescription drugs, dental, vision and extended health care. 

Q) What Are Mandatory Employee Benefits?

Mandatory benefits are benefits that any business in Canada must provide their employees according to Canadian Law without exception. These benefits include; compensation for sick leaves, vacation and statutory holidays, maternity and parental leave, critical illness leave, compassionate care leave, Canada Employment Insurance (EI), and Canada Pension Plan (CPP) contributions. 

Give Your Employees The Protection & Benefits They Deserve With McIver Insurance Inc.

Employees are a business’s most valuable assets and as a business owner finding ways to attract and retain the best talent is essential for sustained growth and continuity. All successful business owners and far-sighted entrepreneurs understand the value that employee benefits can provide and how essential these benefits are in ensuring the success of a business for many years to come.

However, not all businesses can bear the significant costs associated with benefits, especially, if they are operating on a small scale. Luckily, thanks to McIver Insurance even small businesses that have small budgets can also take advantage of benefit plans that are tailored to be affordable while providing all the key ingredients that help boost employee morale, loyalty, and job satisfaction.

As Nova Scotia’s most trusted insurance provider our aim is to always find the most affordable and best-suited benefits plan that gives your employees the protection and peace of mind they deserve making them a lot less likely to go work somewhere else. 

For a quote or estimate give us a call and speak to one of our highly qualified insurance specialists.

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Group Registered Retirement Savings Plan (RRSP)

Over the past few years, I have started offering Group Registered Retirement Savings Plans (GRRSP) to my benefit clients.  Group RRSPs are a great way to help your employees start funding their retirement.  They are flexible, easy to administer and provide no setup fees to the employer.

What is a Group RRSP?

A group Registered Retirement Savings Plan (GRRSP) is a collection of individual RRSP’s setup by the employer while also being administered by the employer on a group basis typically through an insurance provider (Sun Life, Manulife etc.).  Contributions are made through payroll deduction with before tax dollars, the key component to a group RRSP is the matching component.  In most structures the employer will match a percentage of the employee’s salary to a maximum amount.  For example, an employer may match up to 5% of your salary, if you were making $80,000 and contributed the maximum amount to your group RRSP you would contribute $4,000 and your employer would contribute $4,000, thus creating a 100% rate of return before the money starts earning interest. 

 

The Benefits of a Group RRSP (Employee)

  1. Tax Break – RRSP contributions reduce the income tax you pay and contributing through payroll deduction your contributions are pre-tax and tax savings are instant.
  2. Forced Savings – group RRSP are a great way to consistently save each month for retirement, taking the guess work out of when and how much I should contribute.
  3. Employer Matching – If the matching component is offered by your employer this is a no brainer to invest. You are doubling your money immediately before the money is being invested.

 

The Benefits of a Group RRSP (Employer)

  1. Employee Retention.
  2. Attracting the best talent.
  3. Financial security for employees and their families.

 

Who Should I Call to Get Started?

If you would like to discuss a group RRSP, it is always best to first consult with the expert as these policies can be complicated and need to be reviewed. 

When you think of experts, you think of Pat McIver at McIver Insurance. Based out of Halifax, NS, I specialize in all types of insurance matters. If you are seeking medical insurance, health insurance, life insurance, group benefits & RRSP or are looking for a better policy we got you covered! A quick, free, and no-obligation chat is all you need to figure out what insurance plan would be best suited to your needs. 

 

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