Bill’s Blog | October 28, 2021
In Canada, 97% of businesses are classified as small businesses with one to 99 employees. 73% are micro-businesses with 1 to 9 employees. Are you aware there are several ways to provide health and dental benefits for you and your team?
First, I will discuss a great solution and very affordable for business owners called the Health Spending Account (HSA), and you must be incorporated. Then I will explain another option that is very flexible for small business owners with three to ten employees. Finally, I will briefly discuss complete group plans that provide excellent and flexible options for small, medium and large corporations. Each plan has its unique benefits, which I will explain shortly.
One of the most important questions we need to ask is, why do we offer group benefit plans in the first place? Firstly, everyday living costs are going up rapidly (for owners and employees), and medical and dental expenses are no exceptions. Having partial or complete coverage of these expenses is a significant benefit to you and your team. Surveys asking employees what is vital to working with a quality company consistently mention health and dental benefits as top priorities. Of course, there are several other reasons, like healthy corporate culture, training, promotion opportunities, salaries, to name a few. Finally, if you want to retain or attract quality employees, consider including quality benefits plans. The key is finding the right plan for you and your team.
So, let’s take a quick look at the Health Spending Account (HSP). Who is the ideal business for this plan, and what are its main benefits and features?
- Ideal for all incorporated business owners, whether you are solo, family business or have a team of hundreds. The HSP can complement a complete group plan for executives and your team, so 100% of all legitimate medical and dental costs are covered.
- The HSP has a simple online setup, instant coverage and a one-time setup fee of less than $300 plus tax.
- The owner is in complete charge of the benefit amount they offer their team on an annual basis. Example: Owner and executive team 8K, managers 3K, families 2K, couples $1500, singles 1K and part-time $500 per year. The amounts you offer are entirely up to you.
- There are no monthly or annual premiums. There is a 10% administration fee plus tax when a legitimate medical or dental cost is submitted. The plan will not allow the coverage to exceed the benefit amount you have set per each employee. For example, if you set a $1500 annual amount and an employee has a $2000 dental bill, it will only cover the $1500.
- You can customize the plan by adding group life, long-term disability, critical illness, travel insurance and other benefits. But, again, you control what you want to offer and when you want to offer new incentives.
- What does the plan cover? Prescriptions drugs, vision, dental, massage therapy, physiotherapy, MRI’s, Naturopath, and so much more.
- You set the limits, and each employee can decide how to spend their benefit limit each year.
- Easy to administer with an online app for each team member. The employee pays upfront for the expensive, and then you are notified, and you reimburse your team member. An example, $200 expense, plus a 10% admin fee.
- The team member receives a 100% tax-free benefit, and the employer receives a 110% write-off. Win-win.
I can offer the plan Canada-wide, and please reach out to me if you have any questions. I can also send you a PDF of the plan and all of its benefits and options.
The second option targets the micro-business owner of 3 to 10 employees. Again, the plan is highly flexible, and you can offer just health and dental or add more benefits if you so desire, but they are not mandatory. So let us look at the main features and benefits.
- You can be a sole proprietor or incorporated.
- There are eight different H&D plans available, from a basic plan to upgraded coverage plans.
- All employees must participate in the plan. There is a spousal exception if they have a group plan with their company.
- Simple process to set up and administer.
- Can add loss of income from injury or illness coverage and business overhead expense coverage.
- You can add optional guaranteed living benefits with no medical questions: Disability packages, critical illness, life insurance, travel insurance, and more.
- The employer pays a minimum of 50% of the monthly premiums.
- Generally, this plan has very modest premium increases (2 to 3%) annually and some years non at all. The company has a different model from the big group carriers.
If this option interests you, please reach out to me. I can help business owners anywhere in BC where I am licensed. We can set up a Zoom call to understand your needs and then have a quote customized for you.
Having a complete benefits plan can be an excellent incentive for employees and help retain good team members. These plans are very comprehensive in their coverages. However, the number one issue company owners have is significant premium increases. This market is very competitive, and one needs a strong advocate and advisor who can help navigate these genuine challenges.
- Complete group plans require you to participate in more than health and dental. These plans provide a broad range of solutions for your team, such as LTD, Life Insurance and AD&D, Vision, Drugs, Extended Health care and many other benefits.
- When you have high levels of participation, this is what causes the premiums spikes. Unfortunately, sometimes the only solution is to change carriers.
- We have a wide range of top Canadian Group Benefit Carriers available for our clients to provide the best fit for you.
Again, I can help business owners anywhere in BC where I am licensed. We can set up a Zoom call to understand your needs and then have a quote customized for you.
If you need help setting up a new plan or navigating the renewal process, please reach out to me. I have an experienced team that can walk you through the process and find the right solution.
All the best,
Bill Westmacott, Owner
www.fivefoldfinancial.ca
bill@fivefoldfinancial.ca or 778-539-7107