Group Benefits Life & Health


Why Group Life & Health is good:

Group life and health programs are a fantastic addition to any business. They are an incentive to prospective employees in making their decision to join your company. Existing employees will appreciate their company’s efforts to assist in health matters. Employees also have access to benefits that would not normally be available on an individual basis and/or be too expensive. Along with our help, insurance companies can provide a vast amount of support dealing with death, disability, health and dental issues. Having an elderly parent, disabled child or your own stress management issues are hard enough to deal with. We can find an Employee Assistance Program to help you with the research and putting you in touch with the right people, right away.

It is understood that any exchange of information by any participant in this project will be kept in the strictest confidence so as to comply with all aspects of “PIPEDA” legislation. Personal employee information shall be utilized only for the purposes of this project and later destroyed. Only those requested to work with the information shall have access to it and they shall be equally bound to its confidentiality.

Information we need for a quote:

  • Agent of Record letter transposed onto company’s letterhead giving authority
  • Employee data:  names, dates of birth, dates of employment, marital status, salaries, level of benefit, i.e. single, family
  • Plan Design:  copy of existing design, or one can be developed taking into consideration company’s culture and wishes
  • If an existing plan is involved, three years of experience would be required
  • Again, if an existing plan is involved, three years of rates
  • Information concerning any employee who is not active, i.e. date of inactivity, prognosis

Pooled Benefits

Un-Pooled Benefits

Health Life
Dental Dependant Life
Stop Loss LTD
  AD&D
  Weekly Indemnity

Health

Not considered insurance, these benefits are priced on the assumption that everyone will use them to some degree at some point in their working life. The whole group supports those who must claim. In theory everyone winds up supporting everyone else. While often costly, this program is most highly visible next to dental. There could be a deductible (per year). Reimbursement could be at 100% or at some other level with internal maximums put in place to avoid abuse or over utilization. Specific benefits included in this “package” are drugs, semiprivate hospital, out-of-country coverage, ambulance services, paramedical doctors, medical equipment as well as prosthetics. The list goes on, but the idea is that the program tries to cover most, if not all, of those things that are not covered by O.H.I.P. As O.H.I.P is cutting back to an ever-greater extent, these plans are expected to become more encompassing and costly.

Dental

Again, as in the case of Health, this program is not considered insurance. As the most visible of all benefits, it is the most used and therefore the most expensive. Usually a deductible and reimbursement components are designed into the plan to give some cost control in the early stages of the program’s development. The current fee guide for the Ontario Dental Association is most often used to base the payment of claims. Rates are established on a per”single” and per “married” employee.

You could consider this benefit as having several “building blocks” on which to develop a long-term incentive program for your employees. Basic and minor procedures are the first level while dentures, plates, and crowns are the next level. Lastly and most often left out is the Orthodontia program for kids (braces).

Stop Loss

Stop loss is a protection put into place to keep your company from paying astronomical premiums should your group claims be increased suddenly. Insurance companies will place a stop loss limit into your policy for example of $7,500 / individual insured. If one of your employees has over the $7,500 limit on their claims alone, the amount of excess will be tossed away to prevent your claims experience from climbing to an alarming level.

Life

The life insurance coverage provided under a group program is “one year” renewable term insurance (without cash values). In the event of disability exceeding six months, the premiums could be waived by the carrier, but the insurance remains in force.

The benefit is designed to be a flat amount ($50,000 etc.) or at a percentage of the employees annual earnings (base wage, overtime, bonuses, commissions etc.) such as one , two , or three times their earnings. Coverage continues to age 65 with a reduction of coverage, often 50% through until age 70. The waiver of premium is discontinued at age 65.

Rates are established solely on the age, sex and wage distribution of the employee group with a factor attributed to the occupation of each employee.

Dependant Life

This is another relatively inexpensive program. This insurance is paid out in the event of a spouse or child dying. The amounts are small ($5,000 spouse and $2,500 child) but act as lump sum payments to assist with final expense costs.

LTD

Not unlike the Weekly Indemnity program, this benefit kicks in when the short-term program has been completed and the employee finds himself/herself still disabled. The payout is based on the monthly income from this point on. It is paid through to age 65, recovery or death (whichever occurs first) on either a taxable or non-taxable basis. If the employer pays even one penny of the premium toward this benefit then 100% of the claim is taxable. Needless to say, I encourage the program to be paid by the employee.

The benefit design is again, not unlike the weekly indemnity program. A percentage of monthly income is paid to age 65, to a maximum monthly amount. There are offsets for C.P.P., Workers compensation and other coverage so that the employee will never receive more than 85% of their pre disability income.

The definition of disability can often be designed into the plan as either “any occupation” (the more stringent) or a “2 year own occupation” definition. We can explain the finer points of these two definitions when we meet.

This benefit is designed to equal the life insurance. Should death occur by “accidental” means, then the employee’s beneficiary actually gets additional death benefit.

Example: Life Insurance equals $50,000
  Accidental Death equals $50,000
  Total Death Benefit equals $100,000

This benefit also includes a dismemberment clause wherein a lump sum cash settlement is made for the loss of use of fingers, legs, arms, sight etc. Pretty ghoulish stuff but considered by many to be instrumental in helping a person rehabilitate themselves in the event of such an occurrence.

The benefit is the least expensive of all programs because it is seldom claimed against.

Weekly Indemnity

This program is available as an alternative to employment insurance benefits (EI). By placing one of those plans in force that is equal to or better than the E.I. benefit, you can receive a premium rate reduction on your monthly premium payments to E.I. The plan provides for a percentage of an employee’s weekly income to be paid out in the event of short term disability. Notably a percentage of 60%, 67% or 70% are most common. The benefit is paid on the first day due to accident or hospitalization, on the eight day of sickness (waiting period 7 days) and is paid for a period of seventeen weeks or twenty-six weeks (your choice). The benefit normally has a maximum payout per week equal to E.I.’s program or some higher amount. The benefit is taxable.

Employees Age 65 & Over

In today’s environment more and more employees are making the decision to continue to work after their 65th birthday. Although most group plans do continue benefits past that age, the one benefit that has not been included in a standard group plan is Long Term Disability (LTD).

Mitchell Sandham has now aligned itself with suppliers who have replacement coverage. Please contact us for this information.

Terminated Employees

When an employee leaves an employer, it can be a life changing experience. The employer wants to make this experience as smooth as possible for the individual and offer the employee as many options as possible to fill in the holes created by the lost employment.

In considering the terms of the termination, Provincial Employment Standards come into play along with any additional extensions of salary and benefits the company wishes to consider. Any extension of benefits beyond those required by Employment Standards Act must be pre-approved by the carrier supplying the current coverage.

When these extensions have been terminated the x-employee has the following options:

  • Application to Trillium – government health benefit program for catastrophic health care – income based coverage
  • Individual Health & Dental coverage – by third party suppliers
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