The Ins and Outs of Group Insurance

Author Rishi Published March 31, 2017

What is Group Insurance?

Group insurance is a benefits package offered by a union, professional association, alumni association or employer to its members/employees. Since the organization is purchasing insurance for a large number of people using a wholesale approach, the cost of the policy per person is lower than an individual policy.

Policyholders can contribute to the insurance premium through payroll deductions. Employees or organization members who elect to receive coverage will be given a certificate. In the event that a person leaves the company or organization, they can convert to an individual policy or cancel their coverage.

What is Covered?

Depending on the policy chosen by the company or organization, the following components will be covered in a benefits package:

  • Life insurance
    • Non-taxable amount given to a named beneficiary if the employee passes away
  • Healthcare benefits
    • Prescription drug coverage, access to practitioners and therapists, eye exams, hearing aids, orthopedic shoes, and out-of-province/country emergency health benefits
  • Dental plans
    • Services such as recall exams, fillings, scaling, x-rays, inlays, dentures and crowns
  • Disability insurance
    • Accidental death and dismemberment insurance
    • Financial compensation if an accident results in death or disability such as loss of limb, blindness, hearing loss, speech impairment or paralysis

*For a complete list of services included in a policy, consult your company, organization or insurer.

Some group policies include additional perks like programs that give policyholders and their dependents access to some of the world’s best physicians. Another benefit offered by some insurance companies is the employee assistance program, which helps plan members dealing with personal and work-related stress.

Some insurance companies offer exclusive add-on services that are especially useful for businesses. One example is human resource support for small businesses, where the insurer provides companies with access to tools and resources that will lower costs and increase the efficiency of administrative tasks. Another useful add-on is access to industry-specific reports with information on trends and competition within a sector.

Group insurance members can also benefit from policies that come with discount plans for shopping and travel. There are no additional costs associated with this.

Why Offer Group Insurance?

Employees are not the only people who benefit from group insurance. Employers do too, and there are a number of reasons why businesses should consider signing up for a benefits package. Employees form the foundation of every company, so protecting these assets is a priority. The result is not just a boost in productivity, but workplace loyalty and long-lasting employer-employee relations.

Adequate protection for employees is the number one reason why businesses need to offer staff group insurance. Although the national healthcare program is exemplary, there are gaps in coverage that only health and dental insurance can fill. Healthy employees are key drivers of success in the workplace and group insurance allows employers to protect their investments.

Furthermore, employers will be able to recruit the most qualified people for the job and retain these individuals on a long-term basis. The company will become more competitive and productivity will increase.

There are also tax benefits. Without group insurance, healthcare expenses come out of your employees’ net (after tax) income. A benefits package, however, will enable staff to use their gross (before-tax) salary, which allows them to save more. A satisfied workforce means greater productivity for employers. Knowing they are supported by a company that cares, will always boost morale among your employees.

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