Work Made Better.
It’s almost 2020 and the workforce has changed dramatically. Businesses must offer compensation strategies including extended health benefits, competitive wages, room for growth and self-improvement. The three main types of benefits are: pooled, experience rated and spending accounts. Custom plans are designed based on company culture, goals and growth.
When a plan is experience rated, it means that some portion of previous claims is taken into consideration when setting future rates. Insurance companies closely monitor the claims and losses that come from the policies that they support to evaluate whether certain policyholders are more prone to claims, making them more risky to insure. It is easier for an insurance company to determine the risk associated with an entire class of policyholders, but harder to determine how risky and individual policyholder is. The benefit plans themselves are not static either, with changing maximums, waiting periods, and co-insurances all having an effect on the groups overall experience.
Not enough employers are aware when purchasing employee benefit plans about the option of “pooled benefits” and how it can often be the better option. Pooled benefits are a group of companies supporting each other during high and low claiming years to keep premiums stable and affordable because not everybody has high claims at the same time.
Administrative Services Only (ASO) is an arrangement by which an organization funds its own employee benefit plan, but hires an outside firm to perform specific administrative services. An ASO arrangement contrasts with the circumstance where a company buys health insurance for their employees from and external provider. ASO arrangements are common in Canadian health plans and the specifics of these plans will vary depending on the agreement a company establishes with their insurance company. ASO plans typically cover short-term disability, health, and dental care benefits and occasionally they will cover long-term disability for larger employers. Particularly larger employers and interested in ASO plans as they may allow them employer to take greater control of benefit costs to meet the organization’s needs.
Spending Accounts are creative benefit plans for incorporated businesses.
Health Spending Account’s are a Canada Revenue Agency approved method to provide medical, dental and vision benefits in a tax efficient manner. Every business owner who has an incorporated company should have one as it is the most tax effective way to run health, dental, and vision expenses through the corporation. If an employer wishes to offer benefits to their employees,
they can create a custom plan for their employees. The employer has complete control over which employees are covered under the plan, what amount they are given to spend, and if/when their plan is terminated. The employees are “classed” at the start of the benefit term and the limits of coverage are set based on the criteria designed by you and your broker.
Wellness Spending Account’s are a taxable spending account provided by employers to promote healthier lifestyles and employee satisfaction. They are extremely flexible due to being taxable. A WSA typically encompasses what they company believes are items that reward their staff. Some examples include daycare, gym memberships, vitamins, personal
training, etc. The employer has complete control over eligible items in the program, which allows them to be as creative as possible when building the plan. Studies have shown wellness programs provide increased levels of physical activity, and lower levels of absences and risky health behaviours.
Flexible Spending Accounts are often made up of an HSA and WSA with other options like RRSP or TFSA contribution tracking. Although the system does not actually facilitate an RRSP contribution, it does provide real-time tracking to allow
the plan administration to know exactly who made contributions to these accounts and how much to contribute on their behalf.
Employees make contributions to the group RRSP directly from their paycheque and the tax savings from the contribution can be applied to each paycheque immediately, instead of at the end of the year. Employees can define how much they want to contribute to the group plan either as a fixed dollar amount or as a percentage of income. Employers have the option of matching employee contributions, although it is not required.
Setting up a group TFSA offers your plan members a tax-free investment option to help grow their savings, with no tax on withdrawals. Plan members can use it to save for big expenses, like a new vehicle, vacations, and home improvements, as well as supplementing retirement savings or whatever else they may be planning.
Counselling is available in person, by phone, by video, or online. Offices are local and appointments are made quickly, with your convenience in mind. All information shared is confidential.
You can access support on your phone, tablet, or desktop. Create an individual profile, receive personalized content recommendations, and access many helpful resources.
The long-term benefits of an Employee and Family Assistance Program can have a significant impact on your bottom line. They result in improved employee physical and mental health, which in turn boosts productivity, shortens or prevents disability claims, and reduces absences.
Each month, you can receive email newsletters. Giving helpful information on a variety of topics throughout the program year.