Most established employers provide their employees with a range of benefits above and beyond the standard provincial health plan. These benefits are either insured by the benefits provider or an alternative funding arrangement, and some are deductible business expenses but not taxable to the employee. The following summarizes the variety of benefits typically provided.
Life Insurance
Most plans offers a Life Insurance benefit equal to multiples of the employees' annual wages. For example a plan can be one times earnings for hourly employees, two times earnings for salaried employees and possibly three times earnings for executives. Amounts might also vary by location or job function, or based on HR strategy developed in line with the company's goals, or based on the entire budget allocated for the benefits plan as a whole. Another factor is what typically is offered in the organizations market. Competitive data can help determine what plan is best for your firm.
Some plans are now reducing the amount of Life Insurance provided automatically, preferring to redirect premium dollars to benefits that give a higher level of employee satisfaction. This is because the cost of any Life Insurance benefit that is paid for by the employer is a taxable benefit to the employee, even though some employees may not need or want it. In place of the traditional amounts of Life Insurance each employee may also be given the opportunity of purchasing amounts of Optional Life Insurance paid for by payroll deduction. The cost is usually graded by age, gender and smoking status. Coverage is usually dependent on satisfactory evidence of good health.
Accidental Death & Dismemberment
Traditionally the amount of this benefit mirrors the Life Insurance benefit. It too, is now often offered on an optional basis.
Disability Protection
Disability protection offers some form of income in the event of disability from performing the employee's "own job" or "any job". Employers are granted with a reduction in EI premium if they show the existence of a Short-Term Disability Plan.
Older short tern disability benefits were usually called Weekly Indemnity. These plans typically paid a benefit equal to a specified percentage (usually 60% to 75%) of basic weekly wages beginning on the first day of an accident and the third, forth or eighth day of a sickness. In order to conform to Human Resources and Development Canada (HRDC) Employment Insurance standards, most plans pay benefits for a maximum of seventeen weeks. Some older plans, especially Union plans have maximum benefit periods of 26 or 52 weeks.
The term Weekly Indemnity or WI implies that the plan is insured or at least administered by an insurer. There is a trend in recent years to self-insure the Short Term plan, especially for salaried employees.
Long Term Disability, except for the very largest of employers is an insured benefit. Benefits are either taxable or nontaxable in the hands of a disabled employee. It depends on who pays the premiums. (This is true also of a Weekly Indemnity benefit.) If the employer pays any part of the premium, the benefit is fully taxable to the disabled employee. If the employee pays the premiums, the benefit is tax free to the disabled employee. Therefore, if there is to be any employee contribution to the benefit plan it should be directed first to the Long Term Disability and/or Life Insurance benefits.
Extended Health Care
This benefit is designed to at least partially cover medical expenses not covered by the various provincial Medicare plans. The details of the provincial plans are covered elsewhere on this site. The following are the main segments of most EHC plans:
Prescription Drugs account for most of the cost (typically 80% or higher) of the EHC benefit. Double-digit inflation on drugs year after year is the largest factor in driving up benefit costs. Most often now, drugs are handled through a Pay Direct Drug card. The card provider has an agreement with each pharmacy that limits the ingredient cost that will be allowed. Often, (varying be province) the plan design limits what the plan will pay towards the pharmacist's dispensing fee, with the cardholder being responsible for the balance of the cost. The other alternative is to require the cardholder to pay either a flat amount (e.g., $3 or $5 per prescription) or a percentage of the total cost of the prescription (rarely more that 20%). Other cost containment measures are available to help control the rising costs of drugs. New drugs available to treat conditions preciously untreatable, are very expensive and hitting plans hard. Wellness initiatives are commonly put in place to help employees become more educated on Health and Wellness, which may have a positive impact to the Drug, Medical and Disability programs.
Hospital Semiprivate (or Private) Accommodation provision pays the amount in excess of the cost of ward accommodation (provided by provincial Medicare). If included in the plan, this portion usually accounts for about 10% of the EHC cost. As a cost saving measure, some plans have eliminated or at least cut back on hospital coverage to compensate for the increasing costs of medical and drug plans. The reasoning is that the vast majority of hospital beds are configured as semiprivate. If an employee or dependent is admitted to hospital, chances are that the accommodation provided will be semiprivate whether the individual has coverage for the upgraded accommodation or not. The hospital is not permitted to charge the individual the semiprivate differential if there is no insurance in place or if the better accommodation has not been requested.
Out of Province (OOP) coverage is potentially one of the most important aspect of any EHC plan. This is particularly true when traveling or vacationing in the United States. Provincial Medicare plans have seriously cut back what they will pay outside the province of residence. Without OOP coverage a medical emergency in the U.S. could bankrupt an individual. Coverage under the usual EHC plan is limited to absences of not more that 60 or 90 days at a time, with no limit on the number of trips per year. There are no pre-existing conditions exclusions but anyone with a medical condition should check with his or her treating physician to get his or her agreement that traveling presents no problem. (We suggest that the physician be asked to make note of the conversation in the patient's file.) Coverage is for emergency treatment only. Some plans go on to define an emergency as a sudden and unexpected occurrence. For example, a pregnant female in the third trimester would almost certainly not be covered for the delivery of a child while traveling outside the province of residence. Most often the plan has an 800 number to be used to confirm coverage, guarantee payment, coordinate consultation with the individual's physician on whether evacuation is recommended and offer advice on the suitability of the emergency treating facility.
Paramedical, etc.: Physiotherapist, chiropractor, podiatrist, etc., can typically cover up to an annual maximum such as $500, or a combined maximum for all treating practitioners. Treatment by some parameds requires the prior recommendation of the treating physician. Some provincial medicare plans partially cover some parameds. In that case most private plans will not cover any expense for that paramed until the provincial coverage is exhausted. Medically necessary private duty nursing is also typically covered outside of a hospital to a maximum such as $10,000 in any 36-month period.
Miscellaneous: Most EHC plans also cover miscellaneous medical expenses such as ambulance, medical equipment (usually rental) such as crutches, wheelchair, hospital bed, etc., and diabetic and colostomy supplies. Most plans also cover accidental damage to teeth under the EHC plan (usually unlimited).
Vision Care: Although not included in all EHC plans the usual limit is typically between $150-$250 per person in any 24-month period. Many Healthcare Spending Accounts are also implemented to help pay for this type of benefit.
Dental
There are generally three levels of Dental benefits: Basic , including preventive, diagnostic, minor restorative, endodontics and periodontal procedures, Major Restorative, which includes crowns, bridges and dentures and Orthodontics.
Plans are limited by the amount specified in the Current Provincial Fee Guide (PFG), or the PFG one or two years old. Usually there is no annual deductible.
Basic expenses are reimbursed anywhere from 50% to 100% with an annual maximum usually in the range of $1,000 to $2,500 per person.
Major Restorative procedures are reimbursed from 50% to 80% with an annual maximum that may be shared with basic or may be in addition to the basic maximum.
Orthodontics are usually limited to children under 18 and usually reimbursed at 50% with a lifetime maximum of somewhere between $1,000 and $5,000 per child. Some plans do offer adult Ortho, but a very expensive benefit.