With tax-season in full-swing, employers and employees across Canada are submitting their taxes, looking for every possible tax deduction. 

The Canada Revenue Agency (CRA) determines what can and can’t be taxable, and with the constant changes, it can be challenging to decide what can be submitted as a deduction.  

You may have some valuable company perks, such as a cell phone, tuition reimbursement or service awards. But these may not provide any tax benefits. Group health benefits, on the other hand, are a different story. 


Defining Group Health Benefits 


Group health benefits can encompass a wide range of services and products, commonly including: 

There can be many other additional services that can be covered through group health insurance. It all varies on the type of coverage employers provide employees. As such, the taxable benefits also vary. 


What Group Benefits Are Taxable In Canada? 


Determining what is taxable can be tricky for both employers and workers. 

For employees, in general, employer-paid premiums for group life insurance (for both employees and dependents), accident insurance and critical illness insurance are considered taxable benefits. This can be applied at both a provincial and federal level. 

business woman working with documents

However, it should be noted that short and long-term disability insurance is not considered as a taxable benefit at either the provincial or federal level. Even if the coverage is paid by the employer, short and long-term disability insurance does not count as a taxable benefit.

Any contribution to an employee RRSP, as well as any related administrative fees, are taxable. However, that same employer contribution made to a Pension Plan or Deferred Profit Sharing Plan (DPSP) is not considered a taxable benefit for employees.

As for employers, the premiums for group health insurance count as business expenses and, therefore, the premiums you pay on your employees’ behalf are not considered to be a taxable benefit. 

Overall, it can be quite confusing to determine what is taxable and what isn’t. To avoid confusion, make sure you speak to your group health insurance provider for more information. Only then will you have a full understanding of what to expect come tax time. 

Perlinger Group Benefits has been offering exceptional group benefit plans since 1992. Our goal is to provide the best group health insurance plans to meet your business’ needs, regardless of the size of your business. We make it affordable and easy to get access to comprehensive benefits plans. Contact us today: Direct Line 403-217-5560 | Toll-Free 1-877-217-7829 | Email [email protected].

Canada is one of the few countries in the world that provides universal healthcare. 


Canada’s healthcare system covers individuals with basic needs, such as doctor visits and emergency care. If you live in Canada as a citizen, temporary or permanent resident, you are qualified to receive this coverage. It means that if you have a medical emergency, you don’t have to worry about how you’re going to pay for it.  


However, does that not mean that everything healthcare-related is free. Far from it. There are plenty of healthcare services that require payment, or private insurance coverage, including: 

  • Prescription medications
  • Dental care
  • Vision care 
  • Physiotherapy
  • Ambulance services

According to the Canadian Institute For Healthcare Information, private funding amounted to 30% of Canada’s total health expenditures, which reached $264 billion in 2019. The high number highlights the importance of getting private healthcare insurance to cover non-basic healthcare. 


However, the average Canadian household spends $4000 on private insurance premiums a year, which can be substantially expensive for many individuals. It is why Canadians rely on their employers to provide them with additional healthcare coverage – particularly group health insurance.


As an employer, providing coverage can prove beneficial for both employers and workers. And despite concerns about the cost of providing health insurance, it is not as expensive as it seems. 


Young woman in medical consultation with female doctor


What Are The Benefits Of Employee Group Health Insurance? 


Cheaper Than Individual Packages 

Financially, group health insurance plans are designed to be more cost-effective for businesses. Instead of providing individual coverage, group health packages are less expensive for everyone involved. More so, employers can provide more coverage within a group insurance plan as opposed to personal ones, such as including Health Spending Accounts and Wellness Spending Accounts, and group retirement plans


Create a positive work environment for employees 

Happy employees are employees that work hard for the company. It’s why providing them with coverage will increase their commitment to your business. By offering group health insurance plans, employees appreciate the company, feel valued and respected, and will want to stay in the company. 


Attract Quality Employees & Retain Them

Group health insurance is a fantastic attraction for employees. It’s a way to bring in top-tier workers, and most importantly, retain them for the long-term. 


Maintain Productivity

With the option of receiving healthcare benefits, employees will seek treatment quicker than before, ensuring they return to work faster. That change can make a significant impact on your workplace’s productivity and resources. 


Tax Offset 

Providing group health insurance also provides both you and your employees with eligible tax offsets. Rather than paying employees a higher salary, employers can subtract expenses and place them in the group benefits plan. In turn, that lowers payroll taxes and opens up the opportunity to tax offsets. Employers that pay into a group insurance plan can consider it as a tax-deductible business expense. 


What Is Average Cost Of Providing Employee Health Insurance? 


Due to the flexibility that comes with health and dental plans for small businesses in Canada, determining the final cost for employers to provide employee insurance varies. 


According to AGA, “the average annual premium for a group insurance plan normally ranges between $1,500 and $4,000 per employee “. For many businesses, spending between that range amounts for nothing, especially considering the benefits that your workplace will gain. 


Once again, your plan will vary depending on what type of coverage you want to provide for your employees. As you notice from the benefits mentioned above, it is better to provide insurance than not. 


Perlinger Group Benefits has been offering exceptional group benefit plans since 1992. Our goal is to provide the best group health insurance plans to meet your business’ needs, regardless of the size of your business. We make it affordable and easy to get access to comprehensive benefits plans. Contact us today: Direct Line 403-217-5560 | Toll-Free 1-877-217-7829 | Email [email protected].

Group health insurance plans are pivotal for the running of any company. In fact, according to the Canadian Life and Health Insurance Association (CLHIA), up to 90% of all insurance premiums are paid to purchase group plans. This statistic highlights the commitment of companies towards employees in ensuring they receive adequate medical coverage and stay healthy. Companies themselves also experience benefits, such as improved employee morale, productivity and the ability to attract and retain high-quality employees. 


It’s no wonder offering health insurance can strengthen your business. Of course, all business owners across Canada think about the cost of a group health insurance plan.


Here’s a look at what you can expect to pay for group health insurance in Canada and what affects the final cost.


5 Factors That Affect The Cost Of Group Health Insurance In Canada 


Size and Health of the Group

The total number of employees in your group plan will impact how much it will cost your business. It can also include employee family members who decide to opt-in to the policy. The larger the group, though, the more it can help lower your premiums, as it is spreading the health risks across the entire group. 


However, the overall health of the group can affect the premium. If there are employees with specific pre-existing conditions, it can affect the cost of the coverage – or in some cases, seeing the employee being denied. It is, therefore, vital to know how your employees’ overall health might impact your premiums. 


Plan Usage 

All those visits to a doctor can add up over time. More claims from your employees translate to higher premiums. If your employees use your health insurance plan heavily, the cost will increase. On the other hand, if there are fewer claims made, the price will decrease. 


However, don’t be threatened if your employees are using your plan more than expected. A higher plan means your employees like your plan and are getting value out of it. 


Group Health Insurance Canada


Type of Occupation

Different lines of work carry different levels of risk. If you are providing coverage for employees in the gas or oil industry, you might have to pay more because the risks of working in such as industry are higher. 


If your employees work in an office, the premiums might be lower as there are fewer accidents in an office environment. Your insurance provider may adjust your rates depending on the general occupation of your workers. 

The Group Health Insurance Plan You Choose

With so many different types of group health insurance plans, business owners can choose what will suit their employees, and business, best. The cost, though, can vary significantly based on the benefits you decide to include in your plan and the amount of coverage you choose to provide.


Basic insurance can include the likes of prescription drugs and supplemental healthcare expenses. In contrast, mid-and-top-tier plans can consist of emergency travel medical, dental insurance across Canada, and even Health Spending Accounts. The more services you include, the more comprehensive the coverage, the more you can expect to pay for your group health insurance policy. 


However, there are many flexible options available, such as modular flex plans, which help businesses adjust their policies when they gain or lose employees, as well as if they want to customize their coverage. 


 Your Employees’ Contributions

Remember that businesses don’t need to pay for 100 percent of the premiums. Many plans include employees contributing to medical expenses, which helps lower the cost of your premiums. For example, the policy can cover 50% of the service or even 75%. 


Sharing costs with employees is acceptable because it helps them get the health insurance they might not otherwise be able to get. Paying a portion of the costs of a benefits plan is better than not having any benefits. 


The Cost Of Group Health Insurance In Canada


According to a study by the Conference Board of Canada, the average cost of providing benefits for employees was $8,330 per full-time worker. At the same time, AGA says that “the average annual premium for a group insurance plan normally ranges between $1,500 and $4,000 per employee“. 


The differences in fees further highlight that group health insurance plans vary significantly from one company to the next, as well as the costs. 


All these above factors can contribute to the overall cost of a group health insurance plan in Canada. Only by assessing the status of your business can you create a group health insurance plan that benefits your employees and fits into your budget. 


It is advisable that you speak to an insurance provider for more information on obtaining a valuable group health insurance plan in Canada.


Perlinger Group Benefits has been offering exceptional group benefit plans since 1992. Our goal is to provide the best group health insurance plans to meet your business’ needs, regardless of the size of your business. We make it affordable and easy to get access to comprehensive benefits plans. Contact us today: Direct Line 403-217-5560 | Toll-Free 1-877-217-7829 | Email [email protected].