The best small business group health plan in Canada? Health benefit premiums stay the same, and better health benefits for employees, up to double the value.
Small business in Canada as getting fed up with 10% to 20% premium increases dictated by their insurance company for their group health benefit premiums. How can premium costs which comprise approximately 5% of the wage burden, increase year after year much greater than all your other costs?
The reason is that with a traditional insured health benefit Plan, your small business has made promises of benefits to your employees which cannot be controlled and cannot be predicted one year from now, let alone far into the future. The very sustainability of group health benefits for your employees are rapidly being lost.
Insurers have saddled small business in Canada with a defined benefit model. This means that your small business has promised in their contract of insurance to employees, that they can have benefits today and into the future, with no ability to control costs.
Recently in the News, we've been learning about defined-benefit pensions and the stress that they're putting on company profitability and Plan sustainability. The answer for defined-benefit pensions is changing over for new employees to a defined contribution model.
In this model, Small business promises a specific contribution of money into their employees pension plan with with risk limited to the contribution for that year. Gone are the days when promises 20 or 30 years in the future are made. Gone are the days when companies struggle under the burden of these promises to make good for their employees when they reach retirement age.
The same problem is happening with traditional insured health benefit plans which used to defined-benefit model.
Many small businesses in Canada are switching to a defined contribution model before it's too late.
In this model, small business allocates a specific amount each year to each employees Health care spending account. The amount can be increased or decreased in the following year. The risk is limited to the annual contribution. Affordability then can be estimated and predicted as a fixed budgetary item.
Employees who have significant illness or hospitalization to be protected by a high deductible insured plan associated with the defined co
GIVE EMPLOYEES CONTROL OVER CHOOSING THE GROUP HEALTH BENEFITS THEY NEED
With a traditional insured group health benefit plan, the plan dictates to employees what benefits are payable and at what rate.
Health plans dictate co-payments and deductibles which require employees to pay disposable after-tax dollars for health benefits that could be 100% tax-free.
Health plans exclude many items such as dental braces and dental implants which families need and want.
Health plans are characterized by partial payments such as $150-$200 benefit required for a $500 prescription eye glass purchase. This means that employees must dig into their pockets for after-tax disposable income of hundreds of dollars for a benefit that should be 100% tax-free.
Giving employees choice over the benefits they need and want help direct cane and attract the best employees. This is particularly true of younger employees with high expertise and skills in the high-tech area.
But individual health spending account has many other advantages for employees such as combining with theirs posters traditional Health benefit plan to create almost double the benefits. Gone are the days for most employees when they need to step after-tax disposable income for partial payments of benefits should be tax-free.
However, it is necessary for employees to budget their healthcare expenditures wisely he's here in order to stay within the limit of healthcare compensation dollars allocated to their individual account.
CONTROL AND CHOICE IS A WIN-WIN
A defined contribution how spending account with associated high deductible Insurance coverage for serious illnesses is the way to go for small business in Canada in the future.
Business gains control over Health benefit premium contributions as well as choice in the type of Group health benefit plan offered to the employees.
Employees in control and choice over the benefits they need and want as well as receiving up to the double the health benefits when for each premium dollar now spent on traditional plants.