Group Health Insurance in Canada

Providing a group health insurance plan is a key part of any company’s strategy to become an employer of choice. An employee that is considering one company over another will often choose the company with a benefit plan.

Group health insurance benefits are a tax and cost effective way for an employer to offer life and health insurance to their employees.

Benefit plans should not be a one size fits all solution. There are many different forms that a plan can take it and they should be considered carefully. Coverage in a plan will vary depending on how many individuals are in the group, the objectives of the sponsor of the group, and the overall budget. A good group health insurance broker will take all of these factors into consideration before making a recommendation.

Common coverages include Group Term Life InsuranceGroup Disability Insurance, Accidental Death & Dismemberment (AD&D), Short Term Disability, Prescription Drug, Extended Healthcare, Group Dental Insurance, Vision and Travel Insurance. More and more plans are including Critical Illness and Best Doctors as well. 

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Life Insurance

The life insurance component is usually a flat amount. Smaller plans generally have $25,000 coverage or 1-2 times earnings for the individual insured.

Most Group Life Insurance plans have a “non evidence maximum” which means that there is a maximum amount of coverage available without any medical pre-qualification

There is frequently an additional option to buy more term life insurance through the group plan.

Find more information about Group Term Life Insurance

Long Term Disability Insurance (LTD)

Long Term Disability Insurance in a group health insurance plan provides a benefit if an insured is disabled under the provisions of the contract (ie can not perform the tasks of their regular occupation, own occupation or any occupation – this wording is very important ). This benefit usually starts after 120 days of disability, but that can be reduced by the plan sponsor at the onset of the plan set up.

The benefit provided is usually 67% of monthly earnings up to a benefit maximum. The benefit maximum is established at the start of the plan as well. This is the “non medical” maximum and there is frequently an option to go above that non-med option.

Most groups have a non-med maximum of $2500-5000. For many occupations or management team members this is not 67% of their monthly earnings.

The benefit period is also important. Most groups have a 2 year “own-occupation” definition which switches to “any occupation” after year two with coverage to age 65 if the disability persists.

A skilled benefit advisor will take great care in explaining the differences between the definition of disability as well as how to make the benefit non-taxable to the employee.

Learn more about Group Disability Insurance

Accidental Death & Dismemberment (AD&D)

This coverage doubles the life benefit in the event of accidental death. It also provides lump sum cash in the event of dismemberment (ie loss of a limb or loss of sight, etc).

Short Term Disability

Short term disability is for the time frame between the illness or injury that caused the disability and the time that long term disability starts.

The benefit is usually based on 60% of weekly earnings and there is a maximum level of coverage (ie $500).

If the disability is as a result of an accident the benefit would generally start immediately. If it was a result of sickness it could start immediately or at a date specified in the group policy. The same applies if there is hospitalization.

A good group health insurance advisor will help to decide on how to set this coverage up. Many recommend relying on Employment Insurance for this short term coverage.

Prescription Drug

Prescription Drug coverage can be set up in a variety of ways. The coverage may be for brand name prescription drugs or the generic version.

Most plans offer a drug card but some operate on the reimbursement model. With a drug card the insured simply takes the prescription to the pharmacy and has it filled. The insured presents the card and the pharmacy is paid direct by the insurer. The insured is responsible for any co-insurance or deductible. Under the reimbursement model the insured pays the entire bill upfront and then submits the receipt to the insurer, who then reimburses the insured. This is a longer process and less convenient for the insured.

If there is a deductible it may be per insured or per family member. Usually it is small. For example

25 or $50 /year $2 or $5 per prescription equal to the dispensing fee

Co-insurance means that the cost of treatment is shared between the individual and the insurance company. If there is co-insurance it is 80% which means that the insurer pays 80% of the bill and the insured pays 20% of the dental treatment bill.

Extended Healthcare

Extended health care insurance covers items such as semi-private hospital, “paramedics” and medical specialists, and private nursing.

Paramedics and medical specialists can include, Registered Massage Therapy, Chiropractors, Psychologists, Audiologists and the similar professionals. The specialists included can vary widely and there is generally a limit of about $500 per practitioner per year.


Vision coverage generally covers a set dollar amount for every year of every two years

Travel Insurance

Usually overage is $2 million emergency medical coverage for a trip of up to 9 days.

Group Dental Insurance

Group Dental Insurance coverage has a variety of coverage choices. From Basic care only to plans that include major dental expenses and even orthodontics.

Depending on the employer and the insurer there may be a deductible or co-insurance. If there is a deductible it may be per insured or per family member. Usually it is small (ie 25 or $50 /year). Co-insurance means that the cost of treatment is shared between the individual and the insurance company. If there is co-insurance it is 80% which means that the insurer pays 80% of the bill and the insured pays 20% of the dental treatment bill. Deductibles and co-insurance are common cost-containment mechanisms.

There is often an overall annual maximum per individual insured per year. Orthodontic care often has an annual lifetime maximum.

Group Critical Illness

Group Critical Illness Insurance is specifically designed to help employees and their families when critical illness strikes. Individuals and families experiencing a critical illness have many unexpected expenses besides the ones covered under government and group benefits plans. Group Critical Illness insurance provides money for those expenses, leaving employees free to focus on recovery.

Covered illnesses usually include heart attack, cancer and stroke. Some plans have a wider range of illnesses (up to 18 more).

Upon diagnosis of a covered condition the plan member will receive a lump sum of money to use however they wish. They can use it for: financial needs like paying debt or replacing income; Health care costs not included in their provincial health care plan; or for lifestyle adjustments like home renovations

Survivor Benefit

When a plan member dies their family left behind might not have group health insurance coverage elsewhere. For this reason it is important to include a survivor benefit for drug, dental and extended health care. The standard is for 2 years.

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One solution for employers looking to attract and retain valuable employees is to offer a group health insurance benefit package. Cost is always important and a good benefit advisor will help to find a solution that fits the budget while satisfying the need.

An alternative to traditional Group Health Insurance is an ASO plan.

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Small Business Group Health Insurance and Administrative Services Onlyand Group Health Insurance ASO 

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Note: Always speak with a licensed insurance professional about your specific situation. This insurance information is general in nature and the policy wordings always take precedence. It is possible that there are errors and omissions in this website and, or its authors, take no responsibility.

Keep in mind that insurance licensing, legislation, and policies often vary by province and most certainly by country. Canada Insurance Source is a free information source. So use this site to gain a general understanding of insurance with your own area and situation in mind.  Make sure you review the "please read" page. Always speak with a licensed insurance professional about your specific situation.

Always speak with a licensed insurance representative about your specific situation.

This site is general in nature and there may be errors or ommissions

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