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GROUP INSURANCE BENEFITS AVAILABLE - A WORLD OF OPTIONS FROM
WHICH TO TAILOR A PLAN TO MEET YOUR NEEDS
1. Life Insurance
2. Dependant Life
3. AD&D
4. Weekly Indemnity
5. Long Term Disability
6. Extended Health Care
a. Semi Private/Private Hospital Coverage
b. Prescription Drugs
c. Vision Care
d. Major Services
e. Out of Province
f. Travel Insurance
7. Dental Care Insurance
a. Basic Service
b. Major Restorative
c. Orthodontics
8. Critical Illness
9. Cost Plus
GROUP LIFE INSURANCE
-provides basic life insurance to eligible employees
-benefit ranges usually from $10,000 - $500,000
-certain amounts are provided on a non-medical basis
-formula is generally a nominal flat amount or an amount linked
to salary (i.e. 2x salary)
-most carriers decrease the life insurance by 50% for employees
reaching age 65
-life insurance terminates at age 71 or when leaves employer
unless employee has selected a conversion option at time was no
longer eligible
-employees can apply for additional life insurance at a preferred
group rate that they would pay for on a personal basis
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DEPENDANT LIFE BENEFITS
-provides nominal life insurance to spouse and children of employee
-Spouse Amount generally between $5000 to $25000
-Child Amount is usually 1/s of spouse's amount and typically
starts from the 15th day following a live birth
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ACCIDENTAL DEATH & DISMEMBERMENT BENEFITS
-provides a portion of the overall coverage amount in the event
an eligible employee suffers a loss specified in the policy due
to accidental injuries
-benefit paid is usually a percentage of the AD&D benefit
based on type of injury
-can select an amount that matches life insurance or is a lesser
amount
-minimum is usually $25,000
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WEEKLY INDEMNITY
-provides short term disability coverage for an illness or injury
that occurs while an eligible employee
-protection while on or off the job
-can select different waiting periods before benefit becomes payable
generally options are:
Accident = 0, 7, 14, consecutive calendar days
Sickness = 3, 7, 14 consecutive calendar days
-benefits can be payable for 15, 17 or 26 weeks
-Formula for determining benefit amount is usually:
-either 55% or 66.75% of earnings if the benefit is taxable
-either 60-66.7% of earnings + graded formulas if benefit is to
be non-taxable
-first day hospital protection can be selected
-for occupational coverage this benefit will be supplementary
to Workers Compensation benefits
-there is an EI premium reduction for employers who offer this
benefit through a group insurance program
-now WI provides a maternity sickness benefit consisting of 6
weeks for normal birth and 8 weeks for caesarian section
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LONG TERM DISABILITY BENEFITS
-provides disability protection for employees who are off work
for longer periods of time with a disease or injury
-for most groups will be able to apply up to a certain level
without providing any medical information
-waiting period options of 90, 120, 180 or 365 days
-disability definition can be based on own job at first and then
any job after a certain period of time
-taxable benefit formula = 66.67-75% of earnings
-non taxable 60-66.67 of earnings + graded formulas
-can select benefit periods from 2 years, 5 years or to age 65
-can include cost of living adjustments to protect benefit from
being eroded by inflation
-usually include a conversion privilege
-may have a pre-existing condition exclusion for a limited period
(usually 90 days)
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EXTENDED HEALTH
-cover eligible medical expenses that are not reimbursed by provincial
health care program
-generally provided on a co-insurance basis where the employee
pays a certain predetermined percentage of the cost or benefits
are payable at 100% after the employee has first paid a deductible
-semi private or private hospital can be selected
-most plans will cover either all or a portion of the following
benefits
-ambulance
-acute/convalescent care
-private duty nursing (annual maximum selected during design)
-medical supplies
-hearing aids
-orthopedic shoes
-Paramedical practitioners: chiropractors, naturopaths, osteopaths,
speech therapists, dieticians, acupuncturists, massage therapist,
chiropractors, physiotherapists, psychologist, social workers
-out of country coverage usually included and covered at 100%
- select a vision benefit that will provide $100, $150, $200
or $250 every 24 months per person
- select prescription drug coverage with either manual reimbursement
or drug card
for either generic or brand name drug coverage, can also select
unlimited prescriptions or an annual drug limit
-for drug coverage can have a deductible, co-insurance, or have
employee pay a certain amount per prescription
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DENTAL COVERAGE
-depending on size of group may be able to select between basic,
major and orthodontic benefits
-BASIC: typically covers oral exams, x-rays, fluoride, sealant,
fillings, extraction, endodontics, periodontics, oral surgery,
injections and anaesthesia
-MAJOR: typically covers crowns, onlays, dentures, bridgework
and denture related surgery
-ORTHODONTICS: usually covers diagnostic orthodontic services
and orthodontic appliances for children under 18, in some circumstances
may be able to add adult orthodontic
-usually institute an annual maximum of $1000, $1500, $2000,
$2500 per person per year
-recall can usually select between every 6, 9 or 12 months for
routine dental recall
-usually institute a deductible and various co-insurance levels
for the different types of dental coverage
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CRITICAL ILLNESS INSURANCE
-can offer a basic lump sum benefit, usually a percentage of
life insurance or AD&D benefit
-will pay a lump sum within a certain period after a person has
been diagnosed when a critical illness
-covered conditions usually include: heart attack, stroke, life
threatening cancer, kidney failure, Alzheimer's disease, blindness,
coma, coronary artery bypass surgery, deafness, loss of speech,
major burns, multiple sclerosis, muscular dystrophy, organ transplant,
paralysis, Parkinson's disease
-the payment can be used by the insured in any manner they wish,
for instance they can use the money to alter their home, seek
special medical treatment or pay off debts
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COST PLUS BENEFIT
-a tax effective way to top up your group insurance coverage
for employees or certain key employees using pre-tax business
dollars
-most group insurance programs either offer this benefit automatically
on their contracts or the employer can request it to be added
with no additional charge
-there is no additional monthly cost added to the group insurance
premium for this benefit instead there is an administration charged
by the company at the time of claim submission and this charge
is a tax deductible expense to the client
-the employer can offer this benefit to all employees or to specific
classes of employees such as senior staff
-this benefit once instituted will also extend to the eligible
dependants of a person covered for Cost Plus
-expenses reimbursed via Cost Plus must meet the definition of
eligible medical expenses (Please see Revenue Canada document)
and not be reimbursed through another means
-can also use this benefit for the portion of an expense that
is not covered through the group insurance program, for instance
an item that is only covered at 50% you can Cost Plus the 50%
that was not reimbursed
-the benefit that the employee receives is not taxable
-the total benefit amount, including the administration fee and
associated taxes is tax deductible as business expense
Note: before implementing a Cost Plus plan you should discuss
your eligibility with your independent tax advisor to confirm
that it is appropriate for your situation
This material is for information purposes only and should
not be construed as legal or tax advice. Every effort has been
made to ensure its accuracy, but errors and omissions are possible.
Individual circumstances may vary and specific legal and tax advice
is recommended.
This strategy is based on current tax legislation. Future
tax changes and market conditions may affect this program.
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