GPS Employee Benefits & Insurance Solutions Inc.
Faq
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01. What does group insurance (also known as group benefits) cover?
Group Insurance covers many eligible supplies and services such as Drugs, Dental, Vision Care, Health Care, Hospital Coverage, Long & Short-Term Disability, Life & Accident Insurance, Critical Illness Insurance and Emergency Travel Medical Insurance.
02. What is the minimum number of employees to qualify for a group
insurance/benefits plan?
Most insurance companies require a minimum of three employees but some allow minimum of two.
03. As the own the business but I am not an employee (don’t draw a salary), am I eligible?
Owner/shareholder is eligible as long as you actively work in the business, usually minimum 15 – 20 hours per week depending on the insurance company.
04. As the own of a business without any employees, am I eligible?
You are not eligible for a group insurance plan but you can use a Health Spending Account that allows the business’ pre-tax money to pay for your eligible medical expenses so you don’t have to paid with your after-tax money. This way, you get much further with the money (before tax) and the expense is tax-deductible for the business (write-off).
5. Are part-time employees eligible to participate in the group insurance/benefits plan?
Usually, temporary or seasonal employees are not eligible; however, most insurance companies consider permanent employees working at least 15 – 20 hours per week eligible.
6. Are contractors eligible to participate in the group insurance/benefits plan?
Contractors are usually not eligible (there are exceptions for specific industries); however, some insurance companies allow contractors if they work exclusively for your company.
7. Can the group insurance plan cover just the employees and not their families?
Most insurance companies require the employee’s spouse and dependent children be covered unless they are covered by another group insurance.
8. What if the employee’s spouse has a group insurance already?
If the employee’s spouse has group coverage already that also covers the employee, one or both can waive coverage for extended health and dental coverage but the employee must participate in group life insurance (usually very low cost). Of course, both can choose to have dual coverage (two insurance plans) for even more complete coverage if it makes financial sense.
9. If both parents have group insurance, what is the claiming process?
The respective employee claims with their own plan first then the balance of the eligible expenses under the spouse’s plan. The children claim under the parent who celebrates birthday earlier during the calendar year first then balance under the other parent’s plan. This is called coordination of benefits per CLHIA guidelines.
10. Are the insurance rates (premium) guaranteed?
In most cases, the rates are guaranteed for the initial contract term of 12 to 16 months unless you are offered a longer initial rate guaranteed (usually more costly). The rates are renewed every 12 months after that.
11. Is the employer locked into a fixed term contract?
In most cases, there is no penalty to cancel a group insurance plan. Just give minimum 30 days notice and make sure your employees are aware.
12. Does the employee have to be covered by a provincial medical plan?
Yes, an employee must be covered by the provincial medical plan to be eligible because extended health is supplementary (e.g., over and above the provincial plan).
13. Can the employer split cost with the employees to pay some of the monthly insurance premium?
Yes, but the employer must contribute at least 50%.
14. Can the employer pay 100% of the monthly insurance premium?
Yes, the employer can contribute between 50% and 100%.
15. Are insurance premiums paid by the employer taxable benefits to the employees?
Extended health and dental premiums are not taxable benefits but the life and other premiums are.
16. Are insurance premiums paid by employer tax-deductible expenses (write off)?
Yes, they are tax-deductible expenses to the employer.
17. Can some employees choose not to participate in the group insurance plan?
All eligible employees must participate unless they already covered by another group insurance. That being the case, they can choose to waive extended health and dental coverage.
18. Is there a waiting period before an employee is eligible?
Waiting period is determined by the employer for any new hires that is usually 3 months. For a brand-new group plan, all employees are eligible on the effective date even if the employer chooses a waiting period for new hires who join the plan later.
19. Can employees have different benefits?
Given the group is of sufficient size (typically 10 or more), you can have different benefits for each class of employees. All employees in the same class must have the same benefits as they are not individually customizable.
20. Are long-term disability insurance benefits received by the employee income taxable?
It depends on whether the employer paid any part of the long-term disability insurance premium for the employee. If the employee pays 100% of the premium, the benefits are not income taxable.
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