The Complete Guide to Small Business Group Benefits

The Complete Guide to Small Business Group Benefits

The Complete Guide to Small Business Group Benefits

New research shows small business group benefits could be the competitive edge companies need to attract talent.

A study from The Conference Board of Canada, one of the country’s independent research organisations, along with Telus Health found that employees want more health perks—and they’re willing to change jobs to get them. 

According to the study which poled Canadian workers:

  • Between 33-59% of people surveyed said they’d be willing to leave their jobs to find one with a better benefits package.
  • Most respondents said they have employer benefits, but most only get partial coverage.
  • To that last point, the gap between what employees get in health insurance and what they need is 83%—meaning people are seeing a coverage shortfall of 83%.
  • 80% would choose better benefits over a pay raise. 

These findings mean workers are having to pay out of pocket—and by too much—for health care they’d rather see covered by their benefits plan. 

What does this mean for small businesses? Let’s find out. 

The Small Business Group Benefits Advantage

Many employees want extended health care covered by their benefits plan

This offers an opportunity for small enterprises. While they may not be able to compete with big businesses on salary, they can compete by offering better extended health insurance. 

Learn how your organisation can earn a competitive advantage by offering better health and insurance perks. Our complete guide to small business group benefits will show you how—read on.  

Why Do We Need Group Health Benefits?

Canada has a universal health care system paid for by taxpayers. Universal health care is offered free of charge. 

Provincial governments are responsible for administrating health care dollars and for offering high-level services like medical treatments, hospital care, and doctors’ visits. 

But what about the rest? What if you need, for example, an eye exam? Group health benefits are meant to fill the gap—read on to find out how.

What Are Small Business Group Benefits?

Group benefit plans offer protection above what’s covered by Canadian public health insurance

A business or organisation offers a group insurance health plan to a set of people, like a group of company employees or members—like a chamber of commerce or a university. 

Group benefits help members pay for the cost of  things not covered by provincial health care plans. For example, things like:

  • Prescription drugs 
  • Dental care
  • Vision care
  • Ambulance rides
  • Medical equipment, e.g., orthotics or a wheelchair
  • Paramedical services, e.g., physiotherapy, massage therapy, counselling, etc. 

Group insurance plans can also offer additional benefits such as:

  • Life insurance,
  • Critical illness insurance,
  • Accidental death insurance, and
  • Disability insurance (short and long-term)

We’ll go over the above list in more detail later. 

Now that we’ve gone over the ‘why’ and the ‘what’ of group benefits, we’ll go over the ‘how’ in the next section. 

How Do Group Health Benefit Plans Work?

Nearly 70% of Canadians have additional health insurance above and beyond what’s covered by the Canadian Health Act. Nonetheless, many don’t know exactly how group health insurance works.

Here’s the gist: 

A group benefits plan is purchased by the employer or organisation for the benefit and use of their people. In some cases, an employee’s immediate family can also be covered under the plan.

New employees are given the chance to enrol in the company group benefits plan at the time of hiring. Some companies offer the chance to opt out, others make participation in a group plan mandatory. 

Benefits kick in after three months of employment, or whenever the probationary period is over. 

What are the benefits of a group plan, then, versus enrolling in your own personal health plan? We’ve got answers—keep reading. 

Advantages Of Offering Group Health Insurance 

Why are group health benefit plans preferred to individual health insurance? Here are 5 reasons:

  1. Employees deserve it: In a small company, every employee matters. They work tirelessly, often wearing several hats, to make a business run smoothly. Employers can show them they matter by offering their team a comprehensive health benefits plan. 
  1. Flexibility and customization: With the right benefits provider, a company or organisation can get the exact plan they want at a cost they can afford.
  1. Encourages a healthy team: Group health insurance not only pays for itself by taking care of workers health, it also encourages them to take better care of themselves. This leads to a healthier, happier, more productive, more content team. 
  1. Reduced rates: Because the insurer’s risk is spread across a group of policyholders, it lets small businesses access group health benefits packages at a reduced price. 
  1. Attract and retain better talent: A small business can attract and retain better employees by outdooing the competition by offering better benefits.

Disadvantages of group benefit insurance

Listed below are 4 disadvantages of small business group benefits:

  1. Tied to a worker’s employment: A group health insurance plan is tied to a person’s employment. If they leave their job, get laid off, or are fired they risk a sudden loss of health coverage. The good news: some plans can be ported to an individual plan once an employee has left their job. 
  2. Employer-dependent coverage and lack of control: The employer picks the insurance provider and the plan options. The employee has little control to customise their extended health benefits.
  3. Inadequate coverage: A plan may not cover a pre-existing health condition or the cost of higher medical care.

It’s important to keep in mind that regardless of the drawbacks to small business group benefits, it’s always better for an employee to accept the coverage they’ve been offered. If a person needs extra protection, we recommend they:

  • See about whether or not they can top it up using their spouse’s covered, if they have any, or
  • Work with a reputable insurance provider to fill the gaps in their coverage. 

A chat about insurance plans begs the question: what do Canadians want for extended health care benefits? We looked into this question and have an answer—read on.

Which benefits do Canadian employees value most?

A 2021 survey of 1,760 Canadians showed that:

  • 56% of those polled said they were more conscious of their health than before the pandemic,
  • 82% of respondents vowed to take better care of their health in the coming months, and 
  • Out of those people, 39% intended on using employee benefits to do so.

Small business group benefits are a crucial part of helping Canadians take better care of their health. 

Which benefits matter most to Canadians? In no particular order, here’s our list of the top 8. 

1. Life Insurance

Life Insurance is one of the most important parts of a group health policy. Without it, an employee’s family risk ending up in a serious financial bind if they were to pass away from natural causes, e.g., heart attack, cancer.  

In other words, coverage exists to replace the significant household income lost, in the event that a loved one passes away. 

Life insurance is paid out as a tax-exempt lump sum of money equal to either:

  • A predetermined flat amount, or
  • A multiplication of the employee’s salary. For example, if an employee’s annual salary is $80,000, their life insurance may be five times that, or $400,000.  

 As a bonus, employees can also:

  • Add additional life insurance at no extra cost to their employer,
  • Pay for their additional coverage as a payroll deduction,
  • Add optional coverage (with certain providers) for their spouse and dependent children, and 
  • Convert their policy to an individual one if they leave their place of employment.

2. Accidental Death and Dismemberment Insurance

Accidental Death and Dismemberment (AD&D) Insurance is coverage—usually in the form of a rider (or addition) to a life insurance policy—that protects an insurer’s beneficiary in the event of their unexpected death or incapacitation. 


If the wage-earner can no longer work because of an accident, or if their income is lost because of their sudden death, their family will receive a lump-sum of money to help replace their income. 

In the case of small business group benefits:

  • The insurer would be the employee, and 
  • The beneficiary (or recipient) of the payout would often be the employee’s spouse or children. If they don’t have children or a partner, they can name, for example, another family member, close friend, or dependant.

An employee names their beneficiary at the time of being hired. The recipeint can be changed at any time by the employee letting their provider know.

What’s covered by Accidental Death and Dismemberment Insurance

Dismemberment includes the loss or loss of use of:

  • Body parts, e.g., limbs, digits, ears, etc.
  • Bodily functions, e.g., paralysis, speech, etc.
  • One of the main senses, e.g., eyesight, smell, taste, touch, hearing.

AD&D does not cover times when the insurer dies of a natural cause, like cancer—that’s the role of life insurance. 

We recommend employees and their families familiarise themselves with their AD&D plan before an unexpected event happens. Read the fine print and contact your provider if you have questions about your coverage.

3. Critical Illness Insurance

Critical illness insurance is what’s called a living benefit. The way it works: 

  • Critical illness insurance offers a tax-free lump-sum payment to the policy holder in the event they’re diagnosed with a serious illness. 
  • The catch: the illness has to be one of the ones covered by the employee’s plan in order to qualify.

The point of the benefit is to help cover the costs of living with and recovering from a serious condition.

The employee is free to spend money however they choose, such as:

  • To help replace lost income, 
  • To pay the mortgage,
  • To make up for the additional costs of, say, hospital parking, transportation, etc.
  • To fund private nursing or homecare services,
  • To offset the cost of out-of-country treatments or medical care, or 
  • To cover the cost of medical equipment. 

Whatever it’s used for, the given money is meant to help ease the burden of treating, recovering from, and living with a life-altering illness. 

4. Disability Insurance (Short And Long-Term)

Disability insurance exists to replace a portion of your income if you become sick or injured and can’t work for a specific amount of time. A disability can result from a: 

  • Serious injury, 
  • Grave illness, or 
  • Mental health issue

Generally speaking, coverage:

  • Protects you if you temporarily can’t work and are unable to earn an income
  • Replaces between 60-85% of your income, up to a maximum amount, and
  • Lasts for a specific amount of time.

The amount of time covered under disability insurance can be either short- or long-term.

Short-term disability

Short-term disability insurance typically covers an employee for up to 6 months while they’re recovering from an illness or injury. 

How short-term disability works:

  • An employee has to have worked with the company for a long enough amount of time to qualify, and
  • Short-term benefits kick in once an employee has used up their available sick time—if the employer offer sick time. 

Note: A person may be eligible for Employment Insurance (EI) illness benefits if their employer doesn’t offer them paid sick leave. The same goes if they don’t have short-term disability insurance.

Long-term disability 

Long-term disability insurance, on the other hand, covers an employee for an extended period of time. 

How long-term disability works:

  • It kicks in after an employee has used up their available sick time (if applicable),
  • A person’s short-term disability insurance ends, and
  • EI sick time benefits have also run out.

Long-term disability plans generally replace between 60-70% of a person’s annual income. All plans are different, however. We recommend familiarising yourself with yours and ask your employer and provider for clarification on the details before you need to use coverage. 

5. Prescription Drug Coverage

According to Statistics Canada, 36.3% of working-age Canadians take prescription medication. Some prescriptions can cost hundreds of dollars a month. Employers can take this burden off their employees by offering a strong drug plan as part of their small business group benefits.

Prescription drug coverage varies depending on the plan. There are two main features to a drug plan:

  1. Copayment: The employee and the provider are responsible for co-paying, or sharing, the cost of the prescription. Providers often after employees to pay between 70-100% of the total cost of a drug.
  2. Billing method (two ways): 
  • With direct billing, the pharmacy bills the provider directly for the cost of the prescription. 
  • With reimbursement, employees pay the full amount of the prescription up front and then submit a claim to the provider for reimbursement. 

We argue that because prescriptions are so common, and because they can be so expensive, that a person makes sure they have a drug plan before anything else. 

6. Dental Care

Like drug plans, dental coverage follows a co-payment structure. Employees often receive between 70-80% coverage of basic dental services and between 50-60% for major dental work. 

Coverage can include:

  • Exams, consultations, and x-rays
  • Preventative services such as polishing, scaling, and fluoride treatments
  • Restorative services like fillings and crowns
  • Surgical procedures like extractions
  • Endodontic including root canals, and
  • Denture services such as reline and liners, repairs to existing dentures and tissue reconditioning.

Coverage doesn’t always cover specialized dental treatments like periodontics and orthodontics. Some providers offer the option to add them on, however.

7. Vision Care

Vision coverage can be a relatively inexpensive, yet very necessary, component of a small business group benefits plan. 

Consider these stats:

  • According to the 2019 Canadian Health Measure Survey (CHMS), 58.2% of children and youth aged 6 to 19 years have seen an eye care professional in the past year.
  • 68% of adult Canadians wear eyeglasses.
  • On average, Canadians change their eyeglasses every 2.7 years.

Considering how much time we spend on mobile and desktop devices, including vision care on a group health plan makes good business sense. 

Not only does it demonstrate an employer’s care for their team’s eyesight but ensures their team’s eyes stay healthy so they can work discomfort-free. 

If you’re looking to attract better talent—pun intended—include vision coverage in your small group benefits.

8. Extended Health Benefits

Extended health is the final benefit on our list of the top 8 benefits Canadians value.

This type of insurance reimburses the cost of medical services and treatments not covered by a provincial health plan. Examples of covered services include:

  • Hospital stays
  • Ambulance rides
  • Accidental dental emergencies, 
  • Psychological services, 
  • Paramedical services, e.g., physiotherapy, massage therapy, acupuncture, chiropractic, and counselling
  • Podiatry
  • Home nursing care
  • Medical devices such as hearing aids, orthotics, wheelchair rentals, and many more

The offer of extended health benefits, and even a health spending account, can mean huge dividends in terms of return on investment in happier, healthier, more well-cared for employees.

What Small Business Group Benefit Plans Are Available? 

We could write an entire article on the various employee group benefit plans available in Canada. The list is vast and can be confusing once you start to dive into the various choices and options. 

At BPGS, we offer Chamber of Commerce Group Benefits, one of Alberta’s most comprehensive and affordable small business group benefits plans. 

The Chamber of Commerce plan is the best option for four reasons:

  1. Small businesses can enjoy the insurance levels normally reserved only for large businesses,
  2. Chamber plans come at a better price, 
  3. Plans are flexible and you can tailor them to your size of business and the needs of your team, and
  4. Employees can take benefits with them into retirement.

How To Find The Right Small Business Group Benefits Company In Alberta

We hope we’ve convinced you why it’s important to offer group benefits as a small business owner. 

Offering employee supplemental health insurance plans makes good business sense. It shows that you:

  • Value your workers, 
  • Care about their health and wellbeing, 
  • Want to keep them healthy, productive, and content, and 
  • Aim to attract and retain the best talent.  

As we’ve seen, people value a strong employee health plan. Keep this in mind when deciding on which small business group benefits package is right for your team. 

How Can You Apply For Small Business Group Benefits?

Because we’re a small business ourselves, our BPGS team makes the process of applying for, customising, and enrolling in group benefits easy. The application process takes 3 steps:

  1. You apply quickly and easily online where you tell us about your business,
  2. We connect you with a group health insurance advisor in your area, and
  3. We can figure out the best plan for your team by booking a time to discuss your needs and your budget. 

Visit our website to get started with group health benefits.

Upgrade Your Small Business Group Benefits Plan

BPGS has made a business out of helping small business teams stay healthy, productive, and happy—let us help do the same for yours.

A BPGS Group Benefits Advisor would be happy to talk with you about your small business. Together, we can create a health insurance plan that works for your team and your bottom line.

Take better care of employees—they deserve it. Contact BP Group Solutions today.  

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