This article will help you to have a better idea about Group Health Insurance Plan. It’s prepared by experienced Toronto insurance broker and financial adviser Olga Ryjkova.
If you run your own business, there is a variety of group health insurance plans that can meet your needs and the needs of your employees. For many of those plans, there is no minimum number of employees or years in business required to apply. But let’s begin from the beginning and consider the options you have to cover your needs for medical services that are not funded by OHIP.
What options do you have to pay for extended healthcare services?
Basically, you have three options:
Option I. OHIP coverage only
Please don’t say that OHIP is enough for you. We all go to a dentist now and then. And what about your family? Don’t have a family? Okay, if you are young, strong and single then lucky you! But if you run your own business with people working for you, then you have to take care of them simply because they are your major investments.
Option II: Out-of-pocket / No insurance
Quite often, having individual health insurance is expensive and the coverage is poor. And if you are overall healthy, paying for your medical expenses “out-of-pocket” could be actually more cost effective than having private health insurance.
Option III: Private health insurance policy
Do you have a feeling of “not enough coverage for what I’m paying for?” Your monthly premium is pretty high, exclusions and restrictions are too many; and on top of it you might be not even qualify for the extended health insurance plan you want. Then again, what about your employees?
What is Group Health Insurance?
Although the federal and Ontario governments provide with major health insurance programs such as OHIP, disability, workplace injuries, etc., they don’t cover everything. Group health insurance provides additional healthcare coverage to a select group of people, for example the employees of a common employer, the members of a society, professional association or NGO.
A group of people can NOT be created only for the purpose of obtaining group health insurance. To be eligible to purchase group health insurance, people must belong to the group for other reasons that are unrelated to insurance.
How group health insurance works
- Coverage: Usually, a group health insurance policy covers prescription drugs, dental and vision care, physiotherapy and other health services to better ensure the physical, mental and financial health of insured members.
- Coverage for dependents: In addition, dependents of eligible group members are generally eligible for coverage under a group plan. Dependents include spouses and children. Dependents cannot enrol for coverage unless the employee has enrolled. Normally, group insurance plans extend coverage to adult dependents through age 26.
- Uniform in nature: A group health insurance plan for small businesses is usually a single policy that covers the entire group of These plans are uniform in nature, offering the same benefits to all members of the group.
- No medical examination: Group health insurance does not require medical examination of their members because it is uniform in nature.
- Significantly lower costs: Members of the group buy insurance on a “wholesale” basis. The coverage costs each individual member much less than if they had to purchase an individual health insurance plan.
- Equal payments: Every insured person in the group pays the same premium amount regardless of their age or other factors. In contrast, under a private health insurance plan, a person pays different premium amount for the same coverage based on their age, location, pre-existing conditions, etc.
- Master Policy Holder: To save administrative costs, there is often a Master Policy Holder who will retain the documentation on behalf of the members, and may deal with the members on behalf of the insurer. The Master Policy Holder also ensures each member gets their certificate of coverage stating the details of the premium paid, cover available, term of the cover and the claims process
- Coverage renewal: Generally, people are eligible to renew coverage while they continue to be members of the group. Under group insurance a person will normally remain covered as long as he or she continues to work for a certain employer and pays the required insurance premiums. In contrast, under individual coverage, the insurance company often has the right not to renew an individual health insurance policy (for instance if the person’s risk profile changes).
- Coverage termination: If a person leaves the company or organization, their coverage is terminated. However, sometimes employees can maintain their health insurance plan even if they leave the company.
What do group health insurance plans cover?
- Dental care
- Vision care
- Prescription drug costs
- Hospital rooms
- Paramedical expenses
- Medical equipment
- Travel insurance
- And more…
Which group insurance plan is right for you?
Every company, association or NGO is unique. So, the group insurance plan has to be unique too, specially designed in accordance with your group’s nature of business and functionality. Plans may include:
- Group life insurance
- Extended health care benefits
- Dental care benefits
- Vision care benefits
- Prescription drugs benefits
- Disability benefits
- Critical illness benefits
- Accidental death and dismemberment benefits
- Basic and optional life insurance benefits
- Travel medical insurance and more
How your business can benefit out of group health insurance
Benefits for your employees
In addition to all the benefits of group health insurance we’ve already mentioned, there are three major advantages for your employees:
- Opportunity to obtain basic coverage without evidence of insurability.
- Possibility to pick and choose a plan that best suits their needs.
- Chance to share costs with you. (As their employer, you can decide if you want to pay the policy premium or if the employee is responsible for the payment.)
Benefits for you as an employer
- Possibility to pay for your medical expenses through your business as opposed to paying for them personally.
- Saving money on taxes.
- Employees’ retention: Group insurance is a significant part of the employees’ total compensation. It provides peace of mind and security for your employees and for yourself. It results in greater employee commitment and satisfaction.
- Protecting your most important asset, your employees.
- Maximizing after-tax compensation: some group insurance plans can be designed so that these expenses will be paid from pre-tax income, leaving more money into the hands of the employees.
- Maintaining productivity: Knowing that help extended healthcare is available any time people need it gives your employees peace of mind. Happy, focused, and stress-free employees are productive employees.
For a small business with a few employees, for incorporated professionals, contractors, and consultants, the best option for extended healthcare coverage is Group Health Insurance.