EMPLOYEE BENEFITS

 

THE BENEFIT OF BENEFITS

  1. Protect Your People — Benefits provide coverage for people who may unexpectedly face an emergency or critical illness.
  2.  

  3. Promote Their Health — Benefits promote or encourage an employee to maintain a state of health, wealth, and happiness.
  4.  

  5. Attract and Retain Talent— A group benefits plan protects employees and their families and is a direct way of showing you are an employer of choice — to the team you currently have, and to anyone considering working for you.
  6.  

  7. Strengthen Your Business — Access to benefits means employees lose less time to extended illnesses or health concerns, increasing efficiency, and driving a stronger business.

 
References:

    1. 4 in 5 Employees Want Benefits or Perks More Than a Pay Raise; Glassdoor Employment Confidence Survey (Q3 2015) | https://www.glassdoor.com/blog/ecs-q3-2015/ 
    2. Employees will sacrifice a pay raise for better benefits | https://www.benefitnews.com/news/employees-will-sacrifice-a-pay-raise-for-better-benefits 
    3. Sanofi Canada Health Care Survey 2019 |https://www.sanofi.ca/-/media/Project/One-Sanofi-Web/Websites/North-America/Sanofi-CA/Home/en/About-us/The-Sanofi- Canada-Healthcare-Survey/sanofi-canada-healthcare-survey-2019-full-report.pdf?la=en&hash=9594CBE629770C135166181545B8B71D

WHY YOU SHOULD OFFER EMPLOYEE BENEFITS?


Next to salary, employee benefits are the most important tool in attracting and retaining staff.

 

Hard Hitting Facts

    • 4 in 5 want benefits more than a pay raise.
    • 57% of employees said their benefits plan is more important than ever before.
    • 3 out of 4 plan members (76%) agree that they would not move to a job that did not include a health benefit.

Giving employees a dollar more an hour:

Employees take home significantly less after federal and provincial deductions (only $0.60 in some tax brackets).

That extra $1.00 an hour will cost you about $1.29 an hour after you pay the government.

There are no guarantees employees will save money for emergencies, leaving both them and you in a tight spot should the worst happen.

VS.

 

Giving employees Benefits coverage:

Employees get ongoing support to stay physically and mentally healthy, plus protection when they need it most.

You’ll be able to save your business money by deducting eligible expenses on your taxes.

It’s simple math — $1.00 paid in premium = $1.00 worth of health benefits. Benefits received by employees are often tax-free.

Collage HR:
With the ever-increasing complexity of managing your Human Resources and maintaining Compliance with Federal and Provincial legislation, having a practical and easy to use tool is vital.

Canada’s top employers use Collage HR to Manage HR, Payroll and Benefits in their business.

 

Collage HR product features include:
  • Digital Employee Records
  • Onboarding and Offboarding
  • Time off/Absence Management
  • Digital Benefits Management
  • Applicant Tracking System
  • Performance Management
  • Training
  • HR Reporting
  • Managed Payroll

 

The savings in time, complexity, and effectiveness in managing the HR function is incalculable.  Integrated with our Payroll function and you will truly possess a powerful tool in unlocking productive time and effort in your business.

 

Structuring Your Benefit Plan:

There are 2 fundamental ways to set up your Group Benefit Plan:  

  1. An Insured Plan: 
  2. An Expense Reimbursement Plan: 

Incorporating the 2 Claims payment options there are 4 ways to manage benefits payment and administration: 

  1. Fully Insured Plan: The Insurance Company handles everything, both Claims Risk and Administrative Management and you just pay the negotiated premium monthly. 
  1. A Third-Party Administrator (TPA): A third party handles all the administrative tasks, and the Insurance Company absorbs the risk of claims. Again, you pay the negotiated premium monthly. 
  1. Administrative Services Only (ASO): The Insurance Company handles all administrative responsibilities and you, the employer, pay the claims and except for catastrophic claims you absorb the risk. 
  1. Claims reimbursement: You the employer establish a maximum dollar limit of risk and the insurance company offers a catastrophic claims coverage benefit as well as an administrative service. This is commonly known as a Health Care Spending Account 

 

Setting up your group benefit plan requires you to ask some fundamental questions. 1. How do we want to pay claims? 2. What level of claims risk exposure do you want? 3. What percentage of payroll would you like to allocate to benefits? 4. Will there be a shared cost with your employees? 5. Do you want a shared cost containment feature? 6. How do you want to competitively position your benefit plan? 7. Do you want to tier your benefit plan to accommodate giving different employee groups or 4levels of responsibility? i.e., management/staff. 

These questions are not meant to be exhaustive. Rather they are to help you think about benefit design. A qualified benefits professional can assist you in establishing a Group benefit Plan which is a compliment to your business and appreciated by your valued employees. 

Employee Benefits Coverage Options:

Is a contract between you and the insurance company that requires the insurance company to pay an agreed upon guaranteed amount of money called the “face amount”, upon the death of the person insured. The tax-free proceeds of the insurance are paid to a beneficiary or multiple beneficiaries, usually within a few weeks

What are Employee Benefit Plans?

These are a non-cash compensation an employer provides employees in addition to their salary for the purpose of protecting the employee’s health and welfare. There are 5 main categories that can create a comprehensive employee plan: Medical, Dental, Life, Retirement and Disability Income Protection. 

What are Medical Benefits?

Medical benefits are insurance for the cost of medical treatments. These plans can be customized to suit an employers cost based on the types of treatments they choose to offer coverage for. For example: an employer may choose to offer coverage for extended health services such as massage therapy, physiotherapy, or acupuncture. Additional options may include prescription drug coverage, vision, hospital stays and out of country medical expense coverage. Employers can offer this as single cover (employee only), or extend the plan for dependants (spouse, children). Typically, employers cover all family members. 

 

What are Dental Benefits?

 Virtually the same as Medical Benefits, Dental Benefits establish a reimbursement account for each employee and their family members to pay for dental expense completely or partially. You can set the maximum reimbursement levels and establish the extent of what procedures are covered. For Dental Benefits procedures are grouped into categories. They are Basic and Preventative; Major; and Orthodonture.  

What is Life Insurance?

This is a policy to insure the life of the employee whose death would cause economic loss to their beneficiary(s). Traditionally offered to employees as a multiple of their salary, however an employer can also choose a flat amount. This is a group term insurance policy allowing for lower rates compared to purchasing the same coverage as an individual. Dependant Life coverage for Children and a Spouse is also included. Dependent Coverage is typically for a fixed flat amount. 

What is Disability Insurance?

This is a policy that guarantees an income if an employee cannot work due to illness or accident. There are two main portions of this policy, Short-Term Disability (STD) and Long-Term Disability (LTD), as well as Accidental Death and Dismemberment (AD&D). 

Short-Term Disability (STD):

 is a disability insurance policy that provides an employee income who has suffered illness or injury preventing them working. There is usually a waiting period of 0-14 days before an employee is placed on STD. That timeframe would have been pre-set by the employer when choosing a plan. Payment structure is another option predetermined by the employer. A common example might be the scaling formula which could look similar to the following: 14 day wait period; Employee is paid their salary at 100% for the next 6 weeks; Employee is paid 75% of their salary for the next 6 weeks; Employee is paid 55% of their salary for the remainder of their time on STD to a maximum of 1 year (this could be 2 years depending on how the plan is structured and when an employee is officially considered to move to the LTD portion of the plan, if necessary) 

Long-Term Disability (LTD):

is insurance coverage that is extended beyond the STD period because of prolonged or permanent illness or injury sustained by the employee. LTD policies can be set up with an end period, or, be set up to last until retirement. This is predetermined by the employer when setting up their plan. Payment for LTD varies between 60-80% of an employee’s salary and is paid monthly. LTD coverage will have a monthly maximum benefit amount. Simply the LTD Benefit is designed to give a Disabled Employee most of their after-tax take home pay.

Accidental Death and Dismemberment (AD&D):

 an insurance policy that pays the death benefit upon the accidental death of the insured, or a set amount if the insured sustains a catastrophic injury resulting in the loss or use of; a limb, vision, hearing or speech. This policy is also purposed to supplement the life insurance as there are limitations with certain types of accidents. 

Optional Life and Critical Illness:

Optional Life and Optional Critical Illness Coverage can be made available at the employees’ cost, but at a reduced rate relative to individual coverage. For Critical Illness Insurance the policy protects the person from loss or costs associated with the diagnosis or occurrence of a covered health condition. Covered condition can include Cancer, Heart Attack, Kidney Failure, Stroke etc. The list is extensive. Optional Life is simply an individual term life policy purchased through the facility offered through your company. For both Optional Life and Critical Illness there will be a maximum amount of coverage available through a company optional plan. 

Why have an Employee Benefits Plan?

Either due to competitive pressure from your competition or because you care about the welfare of your employees and their families, Group Benefit Plans are an excellent way to provide cost effective coverage. Properly, designed and structured, they can be a much-appreciated addition to your compensation program. 

THE BENEFITS OF BENEFITS 

1.   Protect Your People — Benefits provide coverage for people who may unexpectedly face an emergency or critical illness.

2.   Promote Their Health — Benefits promote or encourage an employee to maintain a state of health, wealth, and happiness.

3.   Attract and Retain Talent — A group benefits plan protects employees and their families and is a direct way of showing you are an employer of choice — to the team you currently have, and to anyone considering working for you.

4.   Strengthen Your Business — Access to benefits means employees lose less time to extended illnesses or health concerns, increasing efficiency, and driving a stronger business.

References
  1. 4 in 5 Employees Want Benefits or Perks More Than a Pay Raise; Glassdoor Employment Confidence Survey (Q3 2015) | https://www.glassdoor.com/blog/ecs-q3-2015/  
  2. Employees will sacrifice a pay raise for better benefits | https://www.benefitnews.com/news/employees-will-sacrifice-a-pay-raise-for-better-benefits  
  3. Sanofi Canada Health Care Survey 2019 | https://www.sanofi.ca/-/media/Project/One-Sanofi-Web/Websites/North-America/Sanofi-CA/Home/en/About-us/The-Sanofi- Canada-Healthcare-Survey/sanofi-canada-healthcare-survey-2019-full-report.pdf?la=en&hash=9594CBE629770C135166181545B8B71D 

“Life is what happens to you when you are making other plans”

– John Lennon

If an Employee Benefit Plan is of interest to you, now is the time to talk with a qualified professional.

May we invite you to give us your contact information so that we may continue the conversation.

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