The Small & Medium-Sized Business Guide to Employee Benefits in Canada

Can you relate…? 

“Some of our best job candidates sign with our competitors because we don’t offer benefits and, in the long term, this will affect our company’s success. To attract and keep great employees – we need a competitive benefits package/program! Where do I start?”

The Statistic You MUST KNOW

EmployeeBenefitAdvisor.com recently reported that 80% of candidates will take a job with benefits over an identical job that paid 30% more without benefits.

And Bob Mathur, our Head of Benefits, actually heard a jobseeker describe a company with poor benefits as…

“not well settled and a little sketchy”

…when explaining why they didn’t take the job offer.

What Are “Employee Benefits”?

While remote working, flexible schedules and unlimited vacation time are great “job perks” and definitely benefit employees, that’s not what we’re talking about here.

The employee benefits we’re covering today fall into anyone of the following categories:

  • Health Insurance
  • Prescription Coverage
  • Disability Insurance
  • Health Spending Accounts, and more.

Unlike an employee’s wage, employees are not taxed for these non-monetary elements of compensation. Employers are able to deduct the expense of employee benefits as well, so everyone enjoys a tax break.

More importantly, insurance of this kind is more expensive for individuals to purchase alone. Group buying power factors into more affordable pricing for employee benefits.

The Value of Employee Benefits

We’ve always known that benefits matter to employees, whether they work for a publicly-held multinational or a privately-owned, small to mid-sized Canadian company.

Yet, almost eight million of the Canadians employed by Canada’s 1.1 million small businesses do not have coverage, according to the most recent statistics available.

But here’s the other side of that story…

Our customers tell us they want to pay for their employees’ benefits because they understand:

Taking care of your employees will mean that they’ll take care of your customers in return.

Why Don’t More Companies Offer a Benefits Package?

We’ve wondered, why as many as 78% of our customer base (consisting of small and mid-sized business owners) don’t offer employee benefits.

So, we did a survey to find out.

Here’s what we learned…

The biggest barrier stopping SMBs from offering Employee Benefits is NOT cost.

Surprising, right?

Instead, the two main reasons why our customers didn’t sign up for a benefits plan were:

  • “I don’t know where to buy benefits,” and
  • “Benefits applications are way too complicated.”

Beyond figuring out where to buy benefits, and then deciding what to buy, employers were also concerned about:

  • cost and the long-term commitment 
  • the time and expertise required to source and administer the benefits program
  • the need for benefits that are as flexible as today’s diverse workforce (age, family situations, health profiles, lifestyles)

After running the survey, we decided then that we’re going to make buying a benefits plan for small – midsized companies really simple.

Afterall, we were already providing payroll related products and services, so why not add benefits on top of that?

Payroll and benefits go hand in hand, our customers already know and trust us and on top of that, our senior leaders have decades of insurance, benefits and finance experience,” says Bob. 

“PaymentEvolution is here to lead and guide the business owners and entrepreneurs that want to offer benefits but can’t take too much time and focus away from running their companies.”

How We Help You Find the Right Benefits Plan for Your Company

Here’s how our benefits experts work with you to find the best employee benefits plan for your company:

  • We figure out what you and your employees would like included in a benefits plan (e.g. vision, dental, health)
  • We work with your budget to find the perfect plan your company will love
  • We’ll make sure your benefits plan is competitive compared to your competitors in order to increase employee retention

Our benefits programs make sense to employers who want to:

  • Attract
  • Retain
  • And, reward employees

One of our current payroll clients, Alan Tuback – co founder of Devos Software – found that, after implementing a benefits plan, he’s noticed there’s been a positive shift in his employees and also his customer satisfaction ratings.

Here’s what he had to say:

“Our employees are taking better care of themselves, for example, regular dentist, doctor and paramedical (chiropractic, massage etc) visits, since we introduced the employee benefits,” says Alan.

 “Employees also seem to be more engaged in the workplace, becoming more active in meetings, and more importantly, taking more responsibility for working with clients.”

Our Carriers

We’ve partnered with companies such as CanadaLife, ManuLife, and EmpireLife so that, when you come to us for help creating your perfect benefits plan, we can provide you insurance, health and dental coverage.

That means, we can cover any of the following for you and your employees:

  • Semi-private hospital room
  • Dental fillings
  • Prescription medication
  • Eyewear
  • Chiropractic
  • Massage
  • Mental wellness support
  • And more!

“Benefits show employees that the company’s owners and managers recognize their value and want to do right by them,” says Bob.

Different Types of Benefit Plans

As your benefits’ experts, we’re here to share some basic information about traditional and non-traditional benefits and what’s included:  

Traditional benefits: insurance, health and dental

Non-traditional benefits: healthcare spending account (HCSA), employee assistance program (EAP), mental health, insurance, health and dental

Health Care Spending Account

Here’s a quick definition of what an HCSA is.

Think of an HCSA as a piggy bank filled with money you give to your employees (in this case, it’s a card).

It can have $200 in it or $1000 in it – it’s really up to you as the employer.

Your employees can then go and spend that money on health care related expenses that aren’t covered by the Ontario Health Insurance Plan.

When they’re done paying for their expenses, you would then reimburse them the money through the HCSA.

The great thing about this is that employees can:

  • Spend the amount in the HCSA anytime they want
  • Carry unused balance forward

For example, we recently helped a café in Hamilton, Ontario set up an HCSA for its employees, typically young people in their late teens and early 20s.

They now have $200 a year available to them for dental, eyewear and other health and medical expenses.

“It’s an affordable option for employers and we’re seeing how much employees in the service, restaurant and hospitality industries appreciate the gesture and flexibility,” says Bob. 

Employee Assistance Program

Let’s say an employee of yours is going through some personal issues.

Drug abuse…

Mental health…

Family problems…

Figuring out retirement…

You see, when you purchase an Employee Assistance Program (which will only cost you $3 to $10 / month).

Your employees will be able to get the confidential, professional support they need.

“Confidential, free services that help employees face a wide range of personal and work-related issues have been particularly valuable with all of the uncertainty and family and financial challenges that have come up through the pandemic,” says Bob.

Insurance, health and dental – what it means and what’s included:

Here’s a quick look at what comes included underneath a health, insurance, and dental plan.

Insurance:

  • Basic life (e.g. death by natural causes such as disease, illness); employee identifies the beneficiary to be paid
  • Accidental death and dismemberment (car crash, falls etc); employee identifies the beneficiary to be paid in case of death; employee is paid if they lose a limb or are otherwise disabled
  • Dependent life (paid to surviving spouse and children)

Health:

  • Medications/drugs (full or with an employee-paid deductible)
  • Hospital coverage (full or with an employee-paid deductible for semi-private, private room)
  • Travel (covers medical expenses incurred outside Canada as a result of injury or illness)
  • Eye exam
  • Vision care (prescription eyewear lenses, contact lenses, frames) 
  • Para-medical (e.g. chiropractor, massage therapy, speech therapist, psychologists etc)

Dental:

  • Recall exams: regular checkups (annual)
  • Regular coverage: fillings (cavities), extractions
  • Major coverage: root canals, dental crowns/caps, periodontal, partials, dentures

How Much Does A Benefits Plan Cost?

On average, a benefits plan (insurance, health, dental) will cost $840 to $1,800 annually for a single employee and $1,800 to $4,800 for a family (whether it’s one adult with two children or two adults with eight children).

The cost is also dictated by a number of other factors:

  • Demographic of the individual (age, gender)
  • What’s included within each plan
  • What sorts of medications or devices are being expensed

“Whatever you pay, employees know you’re giving them something that provides peace-of-mind and reduces or eliminates their out-of-pocket expenses,” says Bob.

“It’s also worth reminding employees that the premiums paid for insurance are a taxable benefit, while health and dental coverage are tax-free.”

Flexible programs, such as an HCSA and EAP, are also recommended because they let employees select the options that meet their unique family and lifestyle needs.

100% or Partial Coverage?

Most traditional benefits programs include insurance, health and dental and we suggest employers cover 100% of the premiums whenever possible.

However, we also recognize that, if you can’t afford to pay 100% of the coverage, even 80 – 50% will do.

It’s better to offer some sort of benefits plan to your employees rather than nothing at all.

So, what’s next?

If you have any questions about benefits or are looking to find the perfect plan for your company, be sure to contact Bob, our Head of Benefits for more information.

Bob Mathur, Head of Benefits
Bob Mathur, Head of Benefits

Have any questions about employee benefits packages?
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