Offering a wide range of employee benefits has become common practice for most small, medium, and large businesses in Canada. Group benefits, for example, offer employees much wider coverage than your provincial health care plans. For most employees, a better health and wellness plan can be the difference between moving to another company or staying in their current position.
These are just some of the ways a group benefits plan can impact the payroll department of any company. However, although it may amount to a little more work, the advantages that a group benefits plan offers to employees far surpass the cons of the extra time and paperwork.
Therefore, in this article, we will learn why group benefits are attractive lures for talented employees and what impacts these plans can have on a business’s hiring and retention.
What Is A Group Benefits Plan? What Does It Include?
Before we get into all the nitty gritty stuff, let’s first recap, what is a group benefits plan? In layman's terms, a group benefits plan is a type of insurance plan that offers a lot more flexibility and health care coverage as compared to provincial healthcare plans.
A group benefits plan comes with certain base benefits, as well as specialty benefits, that an employer can choose to add to make the plan even more attractive for employees.
Base Benefits Can Include:
- • The coverage of certain prescription drugs that are not covered by provincial health care plans.
- • Partial or full dental coverage. Dentists are extremely expensive in Canada and this benefit is often the one that attracts employees the most.
- • Disability programs can safeguard against instances of lost productivity, mental illness, and physical disabilities.
- • Life insurance
- • Critical Illness Insurance
- • Accidental Insurance
Specialty Benefits Can Include:
- • Out-of-country medical coverage and travel assistance
- • Health care spending accounts for expenses not included in their plan
- • Comprehensive health and dental coverage post-retirement
- • Paramedical and emergency services
Employers can also choose to add on a retirement savings plan to make their group benefits plan an even more alluring incentive for employees. This way employees not only have the best health and wellness coverage possible but are also working towards achieving their financial and retirement goals.
Why Are Group Benefit Plans Attractive For Employers & Employees
Any added incentive on top of a good salary is a morale booster for most employees. Having excellent health coverage, along with a retirement plan, can act as an extremely attractive incentive for hiring and retaining the most talented and skilled professionals.
For Employers
Offering a group benefits plan to all employees within the organization regardless of pay scale not only improves employee morale but also increases productivity.
Employees tend to be a lot more loyal to the organization and this way the company always has a competitive edge in the labor market.
However, this is just the start of the benefits for an employer. Choosing group benefits over pay increases also tends to be less expensive as the employer doesn’t have to pay for any increases in CPP, EI, or Worker’ Compensation.
Any premiums paid by the employer into a group benefits plan can also be written off as a business expense. This can help reduce the total amount of tax a company is liable to pay.
For Employees
Group benefit plans are also an attractive incentive for employees no matter what stage of life they might be in. These plans allow employees to have an insurance plan that offers a whole lot more than any personal plan and that too at a much-reduced cost.
Group benefits also offer peace of mind to employees. They help protect against unforeseen expenses that can lead to financial and mental stress. Most plans also include coverage for both the employee and their family.
In many cases, even if an employee is offered a higher salary somewhere else, the fact that their current company offers an excellent group benefits plan (while the other does not) can be sufficient reason for them not to make a move.
Impact Of Group Benefits On The Payroll Department
In the bigger scheme of things, the inclusion of a group benefits plan has little impact on the efficiency and effectiveness of your payroll department. Sure, the inclusion of a group benefits plan will come with some added responsibilities and changes.
Major decisions that the payroll department will have to make and implement are:
- • How to allocate the cost of premiums amongst employees
- • What portion of the cost if any is the company willing to pay
- • How these benefits are to be taxed (some benefits are taxable to the employee while others are taxable to the business)
- • Collaborate with the accounts department to create a comprehensive implementation plan
- • Ensure timely deductions of premium charges from employee paychecks
- • Ensure timely payment of premiums to the chosen insurance provider
- • Help answer inquiries, questions, and concerns from employees
Financial Advisory Services For Choosing The Right Group Benefits Plan For Your Canadian Business!
Group benefits come in many types and a plan can be customized to suit the needs, size, and budgets of any Canadian business. However, before deciding on a plan or choosing an insurance provider it is always best to consult with the experts to ensure that a group benefits plan is in fact in the best interest of your company.
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