Frequently Asked Questions:
Over the years we’ve been asked many different questions on group benefit plans, group RRSP/DPSP programs and Registered Pension Plans (RPP’s). Some of the following are questions we hear on a regular basis and perhaps they are the same questions you have.
Q: How many employees do I need to have in order to have a group benefit plan?
A: Currently the minimum number of staff in order to have an employee benefit plan is two. The number of carriers willing to quote on a plan with only two employes is limited, but it is available.
Q: How much does a group benefit plan cost?
A: This is a difficult question to answer. This is no different than asking what the cost is of a new house. The answer is highly variable depending on the number of square feet, the amenties, location etc. The same is true of an employee benefit plan. Depending on the number of employees, the type of coverage you are looking for etc. the cost can range from as little as $50 per month per employee to as much as $1000 per month per employee. Generally speaking, the cost of a group benefit plan will be less than an individual plan for the same coverage.
Q: Does the company/employer have to pay some of the cost? How much?
A: Yes. All insurance carriers require that employers pay at least 50% of the cost of the benefit plan. This is because technically the contract is between the insurance carrier and the company/employer. In order for the employer to have an insurable interest in the contract they must be paying at least 50% of the cost.
Q: Some of my staff are not interested in a benefit plan. Do all my employees have to participate?
A: There is some flexibility in terms of plan structure so that not all employees neccessarily have to participate. But all employees within the same classification of labor must either participate or not participate. For example, you could have three classifications of staff; Executives, Managers and All Other Employees. You could structure a plan so that Executives and All Other Employees have the benefits but Managers are excluded. But you could not have some executives participate and others not participating. This is anti-selective.
Q: I have some employees who do not want to participate because they have coverage through their spouse’s plan. Do they still have to participate?
A: The short answer is yes. But this question needs some clarification. An employee who waives their health and/or dental coverage because they are covered through a spouse is still considered to be participating in the benefit plan. They are simply waiving benefits for which they already have coverage. Employees with health and/or dental coverage through their spouse would still be required to particpate in the life, AD&D, disability or any other coverage not provided through their spouse’s plan.