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Employee benefit plans – not just one-size-fits-all

Jan 15, 2018 11:03:00 AM

group of employees playing a game

At some point in your life, you’ve likely been a part of a group benefits plan. Whether it was your parent’s plan as a child or through your employer later on, most employee benefit plans followed a very traditional approach. However, in recent years, insurance companies have become more innovative with their offerings. There are now several cost-effective employee benefits options available to fit a range of budgets and needs.

Traditional Health Benefits Plans

With a traditional plan, an employer provides standard benefits to its employees. Traditional plans commonly include:

  • Extended health care coverage for prescription drugs, paramedical services such as massage therapy and physiotherapy, private or semi-private hospital coverage, vision care, emergency medical travel coverage and other eligible services;
  • Dental coverage;
  • Life insurance;
  • Accidental death and dismemberment insurance;
  • Short-term and long-term disability insurance;
  • Critical illness; and
  • Employee assistance programs.

Depending on their budget, employers can provide full coverage or share some of the costs with employees by including deductibles, co-payment amounts or coverage maximums. Employees will also often be required to pay a portion of the premium.

Health Care Spending Accounts (HCSAs)

An HCSA is basically a health benefits bank account set up for each employee to use. HCSA benefit dollar amounts are established by the employer at the start of a pre-defined benefit period. When employees spend their own money on eligible products and services for themselves and/or their dependents, these expenses can be reimbursed through their HCSA up to the predetermined maximum.

Eligible expenses under an HCSA are normally determined by the Canada Revenue Agency (CRA). In other words, if it can be claimed as a medical tax credit, it can be reimbursed through an HCSA.

An HCSA can also be added to a traditional benefits plan to cover eligible expenses that aren’t covered by the plan, in excess of the plan’s coverage maximums, or related to coinsurance and deductibles charged by the plan. It can also be used to cover dependents who aren’t eligible under the plan, but eligible under the Canada Revenue Agency’s definition of a dependent.

Flexible Benefits Plans

Flexible – or flex – plans allow employers to meet the diverse employee needs and demographics of their workforce without breaking the bank. Rather than offering a defined benefits package and paying premiums based on claims paid by the plan, flex plans allow employers to define their contribution levels for the benefit period. Employees use those contributions – known as flex credits or flex dollars – to purchase benefits that meet their personal needs and the needs of their family.

There are a number of different types of flex plans offering varying levels of choice – from adding one or two optional benefits to a traditional plan to providing plan members with the ability to completely customize their benefits. This is a great option to offer flexible employee benefits for small business. 

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