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].

With 90% of insurance accessed in Canada is through Group insurance, employers recognize the value that comes with health and dental plans for companies. 

But while the advantages of obtaining group health benefits plans for small businesses are well known, deciding on a plan for your small business can be challenging. 

You have to consider several factors, such as your budget, the number of employees in your group health, the needs and requirements of your employees and what would you like to provide your employees. 

Even then, it can be challenging to narrow down which health and dental plan is best. With so many options around, it can be overwhelming to choose one that works for your small business. Listed below are some of the most common options available. 

The Different Options For Health & Dental Plans For Small Businesses In Canada 

Basic Insurance 

Basic insurance, also known as traditional health insurance, is the most basic of all plans. For small businesses, the option is very familiar. You pay a monthly premium to an insurance company in exchange for the basics of your insurance, including life insurance, health insurance, as well as accidental death and dismemberment. Depending on who your insurance provider is, your coverage will vary. 

Flex Plans 

Also known as “cafeteria plans”, a flex plan allows employees to select the benefits that will be most useful to them. They can choose from more expensive policies or sign up for the most basic coverage. This allows each employee to select their own type of medical coverage, as they will most likely use the benefits they have assigned for themselves. 

For business owners, a flexible benefits plan helps by creating options within an employer-defined budget. You begin by setting a budget that fits your business. Employees then choose only the benefits they desire, with employers not paying for the benefits they don’t use or want. During the benefits selection process, employees will see the total cost for their benefits, which drives increased appreciation for your business’ contribution.

The only downside to flex plans is that they are difficult to administer and to communicate with the team. It also requires extra work and can usually lead to higher premiums, especially if employees select more expensive plans or services.  

Dental Insurance

Modular Flex Plans 

Modular flex plans are one of the most popular options these days for smaller businesses. Similar to traditional health coverage options, modular flex plans provide coverage for specific benefits, such as vision, disability, and dental insurance in Canada

The significant advantage with modular flex plans is that it is made up of a package of several different benefit bundles that can be used by employees to select a benefit-pack of their choice. 

With modular flex plan options, you can also get health spending accounts, wellness accounts, or even RRSP contributions.

Health Spending Account (HSA)

According to Sanofi, employees that have access to wellness programs (63%) and health-care spending accounts (60%) are more likely to be satisfied with their health benefits plan compared to those without those benefits. This statistic highlights the demand for employers to include these services to their policies. But what are the differences between Wellness Spending and Health Spending Accounts

Health Spending Accounts (HSA) cover medical services that impact the health of employees. It is why their HSAs include dental insurance, prescription drugs, physiotherapy, and vision. Significantly, an HSA is a tax-free allowance. All expenses are 100% tax-deductible for businesses, and employees do not pay tax on their purchases. 

A Wellness Spending Account (WSA) covers services that are only concerned with wellness and health services, as opposed to medical services. They include more health-related services, such as gym memberships, nutrition advice, over-the-counter supplements, personal development, courses and textbooks, mental health and therapy. A WSA is added to an employee’s taxable salary, as opposed to an HSA, which is tax-free dollars. When the reimbursement of the WSA takes place, the expense will be added to the employee’s total taxable income. 

Wellness Spending and Health Spending Accounts can be included in modular flex plans or separately on their own. It varies from policy to policy. 

Find The Group Health Plan That Work For Your Small Business 

Finding a plan that works for your employees can be complicated, but not if you get help. It would help if you spoke to an insurance provider for more information on obtaining a group health insurance and a dental plan for your small business. 

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].