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- Small businesses can reduce group insurance premiums by 20-40% through proven strategies like customizing the plan design based on usage, lowering the coinsurance, and sharing premium costs with employees
- Off-the-shelf group insurance plans often include underutilized benefits that inflate costs. Customizing coverage based on actual employee usage patterns such as limiting paramedical visits or excluding major dental procedures can reduce premiums by approximately 15-30% while maintaining employee-valued benefits
- Small businesses in Canada typically pay between $80 and $200 per employee per month for basic group health insurance. Enhanced group health insurance plans can cost between $150 and $350 per month per employee
Group insurance for small businesses in Canada offers a cost-effective way to provide health benefits by pooling risk across employees, making employee benefits far more affordable than individual health plans.
With over 27 million Canadians now covered by health insurance, mostly through workplace plans, offering group benefits has become a powerful tool for small businesses to attract and retain talent.
In this guide, we’ll show you how small businesses in Canada can get affordable group insurance plans while getting the most value from every dollar spent.
Why does offering affordable group health insurance matter?
Group insurance spreads risk across multiple employees, significantly reducing individual costs while providing access to vital health benefits. In 2024, Canada’s life and health insurers paid out $135 billion in benefits, averaging $370 million per day. This includes $50.2 billion for supplementary health, disability, and accident coverage, a 14% increase from 2023.
By investing in group health insurance, small businesses also contribute to a larger system that employs over 170,000 Canadians and provides coverage to over 100 million people worldwide. Group insurance is not just a benefit, it’s a proven strategy for fostering productivity, loyalty, and long-term business growth.
What is the average cost of group health insurance for small businesses?
Small businesses in Canada typically pay between $80 and $200 per employee per month for basic group health insurance. Enhanced group health insurance plans can cost between $150 and $350 per month per employee.
How much does group insurance cost?
How to make a group health insurance policy affordable?
At PolicyAdvisor, our experienced group benefits advisors help small businesses choose affordable group insurance plans that strike the right balance between employee coverage and budget.
If you’re looking for cheap group health insurance for small businesses, here are proven strategies that our advisors recommend to help lower your premium costs while protecting your team.
| Strategy | Impact on Savings | Impact on Employee Satisfaction | How it Helps |
| Offer HSA and reduce traditional benefits | High | Moderate | Shifts some costs to employees tax-free, gives flexibility to those who need more coverage |
| Annual review / claims audit | Moderate to High | Moderate | Identifies overuse and plan abuse. Adjusts benefits annually based on utilization data |
| Promote telemedicine, prevention, and wellness programs | Moderate | High | Prevents costly claims over time, encourages early intervention and healthy habits |
| Opt for pooled plans | High (long-term) | High | Reduces risk of large premium hikes from high claims in a single year |
| Lower coinsurance percentage (e.g., 100% → 70%) | High | Moderate | Increases employee cost-sharing to discourage overuse and reduce plan liability |
| Limit prescription drug coverage to essential drugs | High | Moderate to High | Focuses on cost-effective and necessary treatment while avoiding excessive drug costs. |
| Require generic substitution | Moderate | Moderate | Encourages use of lower-cost alternatives without compromising treatment quality |
| Cap per-visit reimbursement & usage (e.g., massage, physio) | Moderate | Moderate | Reduces overutilization of high-frequency, lower-urgency services |
| Set a maximum on dispensing fees | Moderate | Moderate | Controls costs through preferred pharmacy networks and fee caps |
| Exclude major dental procedures (e.g., crowns, bridges) | High | High | Keeps plans focused on essential health and routine dental needs |
| Increase deductibles | Moderate to High | Moderate | Lowers premiums and encourages employee accountability. Can be offset with an HSA |
| Reduce annual maximums for select benefits (e.g., vision) | Moderate | Moderate | Manages costs for underused or lower-priority services |
| Implement minimum eligibility requirements (e.g., 3-month waiting period) | Moderate | Moderate | Prevents short-term hires from increasing claims unnecessarily |
| Share premium costs with employees | High | Moderate | Encourages employees to value and responsibly use benefits |
| Customize plan to employee needs | Variable | High | Reduces waste and enhances perceived value of coverage |
Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.
Which insurance companies in Canada offer affordable group health insurance plans?
Leading Canadian Insurance companies like Sun Life, Canada Life, Manulife, Desjardins, Green Shield Canada, Medavie Blue Cross, Empire Life, Equitable Life, and offer customized solutions that meet the needs of small businesses, growing startups, and mid-sized enterprises alike.
Affordable group health companies in Canada
| Insurance Provider | Key Features | Best For |
| Sun Life | Tiered group benefit options, industry-leading digital tools, wellness integration, extensive provider network | Mid to large businesses looking for reliable service, advanced digital tools, and a strong national reputation. Ideal for employers scaling or managing large, diverse teams |
| Canada Life | Highly customizable plans, wide provider access, broad optional add-ons, strong national reach | Small to mid-sized organizations needing plan flexibility to support diverse employee needs, including multilingual support and national or remote workforces |
| Manulife | Competitive pricing, robust virtual care and mental health services, flexible product mix | Businesses prioritizing employee wellness through mental health and virtual care offerings, while still managing overall plan affordability |
| Desjardins | Preventive care focus, value-based plan levels, regional strength in Quebec | Health-conscious SMEs, especially in Quebec, that value proactive care and want cost-effective options with high perceived value |
| Green Shield Canada (GSC) | Non-profit model, strong drug and dental plans, off-the-shelf plans, transparent pricing | Cost-sensitive businesses looking to reduce plan waste and focus spending on core needs through a sustainable, member-focused model |
| Blue Cross | Streamlined administration, flexible pricing, and off the shelf plans | Smaller teams seeking affordable, tailored plans with trusted brand recognition |
| Empire Life | Simple plan design, quick implementation, efficient onboarding | Startups and early-stage companies wanting to offer basic benefits quickly without administrative complexity |
| Equitable Life | Pooled group plans, strong advisor support, personalized service | Growing small to medium businesses looking for customizable coverage and dedicated plan support as they expand and evolve |
Sun Life Group Benefits
- Best for: Medium to large businesses looking for comprehensive digital tools and wellness integration
- Why PolicyAdvisor recommends:
- Digital tools for administration: Offers a user-friendly digital enrollment and management platform to streamline employee onboarding, benefits management, reports, and billing
- Lumino Health Virtual Care: Provides access to physical and mental health resources, including consultations with specialists via virtual platforms
- My Sun Life mobile app: Enables employees to submit extended health care (EHC) claims and receive payments within 24–48 hours
- Diversity, equity, and inclusion (DE&I) coverage: Includes unique offerings like gender affirmation coverage to support diverse employee needs
- Comprehensive coverage options: Includes health, dental, vision, paramedical services, and emergency travel coverage, with flexible plans ranging from basic to enhanced
- Travel insurance integration: Standard and enhanced plans include travel insurance coverage for up to 60 days, ideal for employees who travel frequently
- Sustainability focus: Incorporates sustainable practices, such as investments in green assets, aligning with broader environmental and social goals
Canada Life Group Benefits
- Best for: Small to mid-sized businesses needing flexible plan design and strong provider networks
- Why PolicyAdvisor recommends:
- Extensive provider network: Offers access to a nationwide network of healthcare providers for direct billing and care access
- Digital admin tools: Provides online enrollment, management, and billing tools for efficient plan administration
- Drugsolutions® program: Focuses on affordable medication coverage, balancing cost and care for employees
- Expat and newcomer plans: Tailored health coverage options for international employees or those new to Canada
- Comprehensive benefits: Includes health, dental, life, and disability insurance, with customizable options to suit diverse workforces
- Wellness programs: Emphasizes employee well-being with resources for mental and physical health
Manulife Group Benefits
Best for: Employers investing in employee health and retention through wellness and virtual care
Why PolicyAdvisor recommends:
- Workplace Advisor: An employee assistance program for small businesses with 2 to 50 members and provides unlimited access to various forms of short-term counselling for employees and eligible dependents. Additional features include:
- Diverse offerings: Toll-free access to manager coaching, online human resource library, online courses for leaders and plan members, eldercare and childcare search resources, and trauma response services
- Health eLinks®: An online knowledge center promoting health and wellness that includes an online health risk assessment (HRA) for plan members. It helps participants track health results, provides access to valuable resources and action plans, and encourages proactive health management
- Health Service Navigator®: This serves as a one-stop access point for integrated health tips and medical condition information. It provides resources to navigate the Canadian healthcare system and offers access to world-class doctors for second opinions on serious illnesses
- Resilience® Program: This program is available for groups with a minimum of 25 members. This offers confidential counselling and health management services. This program also enhances wellness offerings, fostering a supportive environment for employee health and well-being
Medavie Blue Cross Group Benefits
Best for: Atlantic Canadian and Quebec businesses needing regional expertise and competitive rates
Why PolicyAdvisor recommends:
- Connected care platform: Provides access to leading health providers with preferred pricing via the Medavie Mobile app or online portal
- Online doctors benefit: Offers year-round access to Canadian-licensed physicians for virtual care, enhancing employee health access
- Cost plus option: Enhances plans with up to 100% coverage for key employees
- Flexible dependent coverage: Extends coverage to non-traditional dependents (e.g., parents or grandparents) if eligible under CRA guidelines
- Group assured access: Ensures employees and families have access to affordable personal health plans with no exclusions for pre-existing conditions, available in Atlantic Canada
- Wellness and health management: Emphasizes member well-being with wellness programs and extensive online self-service options
Empire Life Group Benefits
Best for: Startups and smaller teams that want fast, no-fuss onboarding and affordable rates
Why PolicyAdvisor recommends:
- Flexible group benefits: Offers customizable health, dental, life, disability, and critical illness plans tailored to employee and family well-being
- Competitive pricing: Provides cost-effective plans with innovative offerings for small to medium-sized businesses
- Wellness programs: Includes resources to support employee health and productivity
- Health Spending Accounts: Offers options for employees to cover additional health-related expenses
Equitable Life Group Benefits
Best for: Growing businesses wanting scalable plans and reliable advisor support
Why PolicyAdvisor recommends:
- EZBenefits plan: This is a pooled plan that small businesses (3–35 employees) can select to access basic plan options. Since it is pooled, it comes with less risk, and fewer premiums increase over time. EZBenefits offers four tiers of coverage (Bronze, Silver, Gold, and Platinum) without deductibles, allowing small businesses to select benefits that suit their needs and budgets
- Digital tools: The EZBenefits plan includes digital tools like the EZClaim Mobile app for submitting claims and accessing benefits
- Health Spending Account (HCSA): Reimburses non-traditional expenses like cosmetic surgery or prescribed over-the-counter medication
- Taxable Spending Account (TSA): Offers flexible spending options with balance carry-forward or use-it-or-lose-it models
- Ezclaim system: Enables quick claim submissions via a secure web portal or mobile app
- Long-term price stability: Provides predictable pricing for health and dental benefits, ideal for budgeting
- Healthconnector solutions: Supports employees with severe illness or mental health issues, improving productivity and reducing absences
Frequently asked questions
What is the average cost of group health insurance for small businesses in Canada?
On average, small businesses in Canada pay between $80–$200 per employee per month for basic group health coverage, translating to $960–$2,400 annually. More comprehensive plans with extended drug, dental, and paramedical coverage range from $150–$350 per month. Rates depend on factors such as employee age, location, coverage type, and the insurance provider.
How can small businesses reduce group insurance premiums in Canada?
Businesses can lower premiums by adjusting plan design such as reducing coinsurance from 100% to 80%, requiring generic drug substitution, setting annual maximums on benefits, or cost-sharing premiums with employees. Customizing plans to remove rarely used benefits can also help. These changes typically save 20–40% without eliminating essential coverage.
What are waiting periods in group insurance and how do they affect costs?
A waiting period is the time an employee must wait before accessing benefits. Basic coverage usually starts after 30–90 days, while major dental or orthodontics may have a 6–12 month wait. Pre-existing conditions may be excluded for up to 2–3 years. Longer waiting periods can reduce premiums by 5–15%, but may lower perceived value among employees.
Can small businesses customize group insurance plans in Canada?
Yes. Most insurers offer flexible plan design, allowing you to adjust coverage levels, choose optional benefits, modify co-pays, and set waiting periods. Custom plans help control costs while meeting the unique needs of your workforce. An experienced broker can help design a solution that fits your business.
What happens if an employee leaves the company with group insurance?
Group coverage typically ends immediately or at month-end, depending on the plan. Many insurers offer conversion options, allowing employees to continue coverage individually—though at higher costs. Some plans may include portability features, which allow certain benefits to continue without medical underwriting.
How do Health Spending Accounts (HSAs) work with group insurance?
HSAs are employer-funded accounts that provide tax-free reimbursement for medical expenses not covered by traditional insurance. They give employees flexibility to cover costs like vision, dental, or paramedical services. HSAs can be offered alongside or in place of traditional plans to help control costs and boost satisfaction.
Small businesses in Canada can secure affordable group health insurance by understanding key cost-saving strategies and comparing leading providers. With over 27 million Canadians now covered by health insurance, mostly through workplace plans, workplace group insurance has become essential for attracting and retaining talent. This comprehensive guide reveals how to reduce group insurance premiums through strategic plan design, including flexible benefits selection, coinsurance adjustments, implementing generic drug substitution, and splitting premium costs with employees. Small businesses typically invest $80-$350 per employee monthly, but smart cost-containment measures can significantly reduce these expenses. Top Canadian group insurance providers such as Sun Life, Canada Life, Manulife, Desjardins, Green Shield Canada, Medavie Blue Cross, Empire Life, and Equitable Life offer affordable group plans for different business sizes.
Canadian Life and Health Insurance Association. Canadian Life & Health Insurance Facts, 2023 Edition. Toronto: CLHIA, September 26, 2023.
