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A Guide to Employer Provided Insurance Benefits

Employer provided “group” insurance plans are considered a nice job perk and highly valued by most people. For this reason, a well designed group plan will help an employer attract and retain quality, long term employees.

A typical group insurance policy is comprised of life and accidental death insurance equal to a flat amount or a multiple of earnings. It may also include short and long term disability benefits that pay a percentage of earnings in the event the employee cannot work due to serious accident or illness. Most policies also include a comprehensive health insurance plan intended to cover expenses that go beyond provincial medical benefits, as well as dental benefits.

An employer may choose to pay the entire cost of this insurance or share a portion with the employee. Most benefits are received by the employee on a tax-free basis. However, current tax rules state that Long Term Disability benefits are only received tax-free if the employee has paid 100% of the premium for this benefit.