This week, we did not publish an HRinfodesk newsletter. As a result, our regular featured post “Most-viewed articles this week on HRinfodesk” is not available. Instead, we are happy to provide you with the following HRinfodesk poll result and commentary.
How does your group health and life insurance benefits plan compare to the plan offered by other companies? That is the question we asked our readers in one of our recent polls. Out of 196 respondents, 103 (52.55 percent) believe it is similar to other plans offered by other companies, while 47 (23.98 percent) felt it was better. Only 18 (9.18 percent) respondents indicated that their company did not offer a group health and life insurance plan, while 28 (14.29 percent) felt that their plan was worse than those offered by other companies.
What is a group benefit plan?
A company group benefit plan shares the financial risk of health related expenses among the group of employees, under one contract, who pay into a fund or pool. Moreover, the group plan pools the rates for all employees of a particular company into a single plan. These plans are available for groups as small as two or three people.
When an employer has a group benefits plan in place for their employees, any member of the group who becomes ill or requires services such as prescription drugs, employee assistance program, visual aid, dental work, physiotherapy, life and travel insurance etc. is financially compensated by the plan according to the terms laid out in the contract between the employer and the insurance company.
Family members of employees are also covered under the plan as specified by the contract.
The benefits that the group can choose from are numerous, and when these benefits are chosen everybody within the group will have them. Employers need to know what the benefits are before they sign up and require employees to enroll.
Employees’ claim will be processed according to the terms and conditions of the policy. It also allows an employee to receive a reimbursement of up to 100 percent of the costs for some selected prescription drugs.
Why offer a group health and life insurance plan?
Employers are not required by law to offer employees health care or life insurance benefits.
Offering a group health plan can be one of the most challenging, yet rewarding, decisions an employer can make. The employees participating in the plan, their beneficiaries, and the employer benefit when a group health plan is in place.
Having those plans in place sometimes provides a company with a competitive edge in the job market. The company will be able to attract and retain employees, which helps minimize costs associated with high turnover. It also increases employee productivity, engagement and high morale by providing financial security and support to employees. In addition, most premiums an employer pays are tax deductible as a business expense.
While job applicants usually focus on salary or wages you offer them, the health/life benefits package plays a crucial part of their decision to accept a job offer from you. The strength of your benefits will often make the difference between a prime candidate’s job acceptance and your continued search for the right candidate.
These benefits help your employees bridge the widening gap between provincial health insurance plans and the coverage your employees and their families need.
In general, companies offer health/life benefits package to full-time permanent employees who have worked for them at least for three months and exclude part-time and temporary employees, which is not against the law. However, granting these benefits plan to part-time employees even at a pro-rated basis could be a good idea to enhance your internal pool of candidates for future job vacancies.
Depending on what benefits other employers are offering, if you do not offer the same or better, you will not differentiate your organization from others and many candidates may pass on your offer.
How to choose a plan?
There are many such health/life benefits plans in the marketplace, and they can be very costly and difficult to administer.
According to Chantal Marr, member of the Independent Financial Brokers of Canada,
The balance between providing quality benefits, retaining quality employees and controlling expenses is one of the most important factors a company needs to take under control.”
As the employer, you have to choose the health/life benefit plan that will provide the most value to your employees, and meets both your needs and your budget. This means deciding which plan is worth the cost and which insurance provider you want to do business with.
Marr has provided a list summarizing some of the differences between group carriers in Canada and is worth looking at.
First Reference Human Resources and Compliance Managing Editor