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- With 49.3% of Canadian businesses citing talent retention as a wage driver in 2024, comprehensive group insurance benefits are now essential for attracting and retaining skilled employees
- Modern Canadian workers prioritize extended health coverage, mental health support, disability insurance, and flexible benefits that can be customized to different life stages
- Different sectors require tailored approaches, for example, tech companies need flexible remote work coverage and enhanced mental health tools, while manufacturing requires injury rehabilitation benefits and shift worker customization to meet unique workforce needs
- Small businesses can access group insurance through shared premium models, association buying pools, and minimum participation thresholds, while larger enterprises benefit from self-funded plans, experience-rated pricing, and multi-location policy harmonization
- What top talent expects from employee benefits packages
- Core group insurance benefits that attract top candidates
- Group insurance features that help retain top talent
- Industry-specific group insurance strategies in Canada
- Which providers offer group insurance in Canada?
- Cost-effective group insurance implementation for Canadian employers
- Future trends in group insurance and talent management
- Frequently asked questions
Canada faces a tightening labour market. In late 2024, 28.3 percent of businesses reported recruiting skilled employees as a major obstacle. Nearly 19.3 percent expected retaining skilled staff would remain a challenge, and 19.1 percent anticipated a general labour shortage.
In addition, 49.3 percent of employers increased wages to help retain talent in 2024. Job seekers now place greater value on comprehensive employee benefits packages, often weighing them equally or more than salary. As a result, group insurance in Canada is no longer a perk, it is a strategic necessity.
From extended health coverage to wellness programs and disability benefits, group insurance can serve as a powerful tool for both attracting top talent and improving employee retention. This guide explores how Canadian employers can use workplace benefits to build a more resilient and engaged workforce.
How much does Group Insurance cost?
The Canadian talent retention crisis: Why benefits matter now
Employers report increasing challenges in recruiting and retaining employees. Over one-third predict labour-related obstacles in the coming months. Retention now costs companies 1.5 to 2.5 times the annual salary of departing employees.
Replacing staff disrupts continuity, impacts productivity and increases hiring costs. Therefore, offering a strong group benefits package can reduce turnover, improve morale and lower recruiting costs over time.
What top talent expects from employee benefits packages
Canadian job seekers increasingly seek out comprehensive group health insurance packages that address both financial protection and wellness. Priorities often include:
- Extended health and dental care: Core expectations for most employees, especially in provinces where public plans do not cover prescription drugs, vision, or dental services
- Mental health benefits in Canada: Increasingly essential as awareness grows; younger workers often prioritize virtual therapy, EAPs, and mental wellness apps as must-have benefits
- Disability coverage: Short- and long-term disability insurance offers vital income protection, especially for roles without paid sick leave or those in high-stress or physically demanding fields
- Retirement and savings plans: Group RRSPs, DPSPs, or pension matching contribute to long-term financial wellness and are valued by older workers planning for retirement
- Flexibility and customization: Modular or cafeteria-style benefits allow employees to choose what fits their life stage—this adaptability is key for multigenerational teams and remote or hybrid workforces
Younger workers, especially Millennials and Gen Z, tend to value mental health resources and workplace wellness programs, while Gen X and Boomers may prioritize long-term disability and retirement planning.
Core group insurance benefits that attract top candidates
Employers can make group insurance plans stand out with valuable and relevant coverage. The most impactful features include:
| Feature | Description | Employee appeal |
| Prescription Drug Coverage | Covers medications not included in provincial plans, including brand-name and generics | Essential for families managing chronic conditions and older employees who need ongoing prescriptions |
| Vision Care & Dental Benefits | Covers routine exams, corrective lenses, and dental procedures (cleanings, fillings, orthodontics) | Popular with families, employees with dependents, and professionals in public-facing roles |
| Paramedical Services | Includes chiropractic, massage therapy, physiotherapy, naturopathy, and acupuncture | Appeals to active employees, wellness-focused staff, and those recovering from injuries |
| Mental Health Support | Employee Assistance Programs (EAPs), virtual therapy, counselling, and wellness apps | High demand among Millennials and Gen Z; valued by employees in high-stress roles |
| Group Life Insurance | Provides lump-sum benefit to beneficiaries in the event of employee death | Important for employees with dependents or mortgage obligations |
| Disability Insurance | Short- and long-term income protection if illness or injury prevents working | Critical for high-risk or physically demanding jobs, and sole income earners |
| Critical Illness Insurance | Lump-sum payment upon diagnosis of covered serious illness | Appeals to mid-career employees concerned about financial stability during recovery |
| Optional Spousal & Dependent Life Insurance | Extends life coverage to family members | Valued by employees with dependents seeking additional security |
| Flexible Spending Accounts (FSA) | Employer-funded allowance that can be used for various health, wellness, or personal expenses | Appeals to a diverse workforce with varying priorities |
| Health Spending Accounts (HSA) | Tax-free reimbursement for eligible medical expenses not covered by other plans | Popular for dental, vision, mental health, and paramedical claims among all age groups |
Group insurance features that help retain top talent
Employers competing for top talent in today’s labour market must go beyond standard health and dental plans. Advanced group health insurance plans, particularly those that promote wellness, support dependents, and foster financial security play a critical role in long-term employee retention. When thoughtfully designed, these features reinforce a company’s commitment to employee wellbeing and career longevity.
Wellness programs and preventive care
An effective benefits strategy supports not just physical health, but mental and emotional wellbeing. Integrating wellness into group insurance increases engagement and reduces long-term absenteeism.
- Employee Assistance Programs (EAPs): Confidential counselling and crisis support services help employees manage stress, family issues, or financial challenges
- Wellness Spending Accounts (WSAs): These provide flexible reimbursement for fitness, mindfulness, or personal wellness expenses not typically covered by traditional plans
- On-site or virtual mental health support: Direct access to therapists, psychologists, or wellness coaches boosts mental health outcomes, especially in remote or high-pressure roles
- Preventive care and health screening: Coverage for screenings (e.g., heart, diabetes, cancer) and vaccinations helps identify health issues early and reduce future claims
Family coverage and dependent benefits
Support for employees’ families has become a competitive differentiator in benefits planning. These features improve employee loyalty, especially among those balancing caregiving responsibilities.
- Extended coverage for spouses and children: Helps reduce out-of-pocket healthcare costs for the household
- Parental leave top-ups: Offering additional paid time-off encourages retention during life transitions
- Fertility treatment support: Coverage for IVF, IUI, or adoption-related expenses appeals to younger employees and signals inclusivity
- Dependent Care Spending Accounts: Allow employees to offset daycare or eldercare costs using pre-tax dollars
Retirement and financial planning benefits
Long-term financial security is a major factor in employee retention—particularly for Gen X and Boomers approaching retirement.
- Group RRSPs with employer matching: Encourages disciplined savings while offering a tax-effective compensation tool
- Defined contribution or defined benefit pension plans: Provide predictable retirement income, highly valued in stable industries
- Stock purchase plans (ESPPs): Promote a sense of ownership and align employee performance with business success
- Financial education and advisory tools: Access to financial literacy resources, budget apps, or advisor consultations supports overall financial wellbeing
Industry-specific group insurance strategies in Canada
Each industry presents unique risks and employee expectations. Customizing benefits to meet sector-specific needs enhances program effectiveness and relevance.
Employee benefits for the technology sector
- Flexible work health coverage: Plans that adapt to hybrid or fully remote work environments
- Enhanced mental health tools: Apps, coaching, and digital platforms tailored to high-stress, screen-heavy roles
- Virtual care access: Essential for distributed teams who may lack in-person provider access
- Learning and development credits: Support career growth through certification reimbursement or course funding
Employee benefits for healthcare and professional services
- Continuing education coverage: Keeps employees up-to-date with licensing or professional development requirements
- Professional liability insurance: Protects employees in regulated roles, especially clinicians and advisors
- Enhanced disability plans: Tailored to the high burnout risks and physical demands of frontline work
- Sabbatical or mental health leave: Encourages long-term retention and mitigates burnout
Employee benefits for manufacturing and trade
- Enhanced injury and rehabilitation benefits: Crucial for employees in physically demanding roles or hazardous environments
- Shift worker benefit customization: Supports workers with irregular hours through flexible scheduling and claim support
- Occupational health support: On-site clinics, ergonomic assessments, and return-to-work programs lower lost time and improve safety culture
- Union-standard compliance: Aligns benefits with negotiated contracts and helps maintain labour relations
Which providers offer group insurance in Canada?
Top group insurance providers in Canada include Sun Life, Canada Life, Manulife, Green Shield Canada, Desjardins, Empire Life, and Equitable Life.
Top companies offering group benefits plans in Canada
| Provider | What they offer | Employee retention value | Best for |
| Sun Life | Extended health, dental, vision, life & AD&D; short- & long-term disability; HSAs; mental‑health and paramedical; virtual care (Lumino Health); Teladoc Medical support | Nearly 24/7 care access, wellness supports, plus powerful digital tools and app; flexible plan design boosts engagement | Any-sized business needing best‑in‑class digital claims & broad coverage |
| Canada Life | Traditional health/dental/vision; life & disability; EAP; wide provider network; customizable benefits | Broad choice increases satisfaction and work‑life flexibility; telemedicine and EAP add convenience | Employers requiring strong network access and tailored benefits |
| Manulife | Scalable plans; core health/dental; life, disability & critical illness; wellness programs; financial education; Vitality wellness platform | Financial wellness and health incentives support holistic retention and engagement | Companies seeking integrated health & financial wellness support |
| Desjardins Insurance | Health, dental, wellness, disability, life insurance; paramedical coverage; retirement savings integration with Group RRSP/DPSP | Combines health + financial security for long‑term loyalty; retirement features signal long‑term commitment | Employers targeting retention via future‑oriented benefits |
| Green Shield Canada | Not‑for‑profit health/dental/vision plans; HSAs; focus on preventive care and evidence‑based coverage; quick “off‑the‑shelf” plan setup | Affordable, flexible basic coverage with fast onboarding; appeals to smaller teams or start‑ups | Small businesses wanting rapid, flexible benefits setup |
| Empire Life | Standardized group insurance plans; health & life through advisors; stable pricing | Price consistency helps budgeting and trust; appeals to firms wanting predictable benefits costs | Businesses prioritizing stability and value over bells & whistles |
| Equitable Life | Simplified plan designs; health, dental, life insurance targeted at small to mid‑sized groups | Streamlined administration lowers friction for employers and employees | SMEs wanting simple and consistent coverage |
At PolicyAdvisor, we help businesses compare plans across these providers and customize benefits for their workforce needs.
Cost-effective group insurance implementation for Canadian employers
Offering employee benefits is no longer limited to large corporations. With the right design and provider, Canadian employers of all sizes can implement cost-effective group insurance strategies that meet both budget constraints and employee expectations.
Small business group insurance options
Small businesses often assume group insurance is out of reach, but several structures can make it more accessible:
- Shared premium cost models: Employers can split premium costs with employees, with upto 50% cost of premiums contributed by employees
- Association or provincial buying pools: Small businesses can access better rates and plan flexibility through industry associations or pooled small business plans available in some provinces
These strategies help small employers offer competitive benefits while managing their bottom line.
Medium to large enterprise solutions
Larger employers benefit from greater flexibility and cost control. Strategies include:
- Self-funded or ASO plans: Employers take on the risk of claims but only pay for actual usage, with administrative help from insurers
- Multi-location policy harmonization: Companies operating across provinces can streamline administration while meeting different regional requirements
- Premiums based on usage: Insurers may base premiums on the organization’s claims history, rewarding lower usage with reduced costs
- Benefit tiering by job class: Employers can tailor benefits for different roles or departments, improving relevance and perceived value
These advanced options allow mid-sized and large firms to better align group insurance with workforce diversity and retention goals.
Tax implications and employer deductions
In Canada, group insurance programs come with specific tax treatment for both employers and employees:
- Employer deductions: Premiums paid by employers for health, dental, and disability benefits are generally tax-deductible as a business expense
- Taxable benefits: While health and dental benefits are usually non-taxable for employees, life and disability insurance premiums paid by the employer can result in taxable benefits
- Provincial premium taxes: These vary by province, typically between 2% and 3%, and should be factored into total benefit plan costs
Future trends in group insurance and talent management
As the workplace continues to evolve, so too must the design and delivery of group insurance plans in Canada. Employers looking to stay competitive in recruitment and retention will need to align their benefit strategies with several emerging trends.
- Rising demand for mental health coverage: Employers are expanding access to counselling, virtual therapy, and integrated wellness tools to meet growing mental health needs, especially among younger workers
- Extended group insurance for remote workers: Plan designs are evolving to include remote and hybrid employees, with insurers offering coverage that works across provinces and accommodates virtual care
- Flexible and modular benefit plans: More organizations are adopting customizable group benefit structures, allowing employees to choose coverage based on age, lifestyle, and family needs
- AI-powered wellness and EAP platforms: Artificial intelligence is enhancing wellness program engagement through personalized insights, digital health tracking, and automated access to employee assistance programs
- National pharmacare and prescription coverage changes: Proposed federal pharmacare legislation could affect how group drug benefits are structured, especially in coordination with provincial drug plans
- New employee privacy and digital health rules: Employers must stay compliant with evolving privacy laws affecting virtual care platforms, EAPs, and digital health monitoring tools in group plans
Ready to build a competitive benefits package?
PolicyAdvisor helps Canadian businesses compare group insurance plans from top providers—all at no cost to you. Speak with a licensed advisor and get tailored recommendations for your team.
Frequently asked questions
How does group insurance help attract top talent in Canada?
Group insurance provides prospective employees with valuable health, dental, disability, and life coverage that enhances their total compensation package. Competitive benefits signal that a company values employee well-being, which can improve job offer acceptance rates.
Why is group insurance important for employee retention?
Employees are more likely to stay with employers who offer comprehensive and stable benefits. Group insurance creates long-term value through financial security, wellness support, and access to care—especially for families or employees with ongoing health needs.
What are the most valued benefits in a group insurance plan?
Canadian employees commonly prioritize prescription drug coverage, dental and vision benefits, mental health support, and disability insurance. Flexible Health Spending Accounts (HSAs) and Employee Assistance Programs (EAPs) are also increasingly in demand.
Can small businesses in Canada afford group insurance?
Yes. Small business group plans are available through pooled risk arrangements, association plans, or cost-sharing models. Options like Victor Insurance and association-sponsored plans make it possible to offer group benefits on a modest budget.
Which providers offer group insurance in Canada?
Top group insurance providers in Canada include Sun Life, Canada Life, Manulife, Green Shield Canada, and Desjardins. PolicyAdvisor helps businesses compare plans across these providers and customize benefits for their workforce needs.
Canada’s labour market continues to tighten, with 49.3% of businesses reporting talent retention as a driver for increased wages in 2024, according to Statistics Canada. A further 35.0% of employers anticipate difficulty recruiting skilled staff, while 27.6% expect retaining talent to remain a significant obstacle.
Amid this competitive hiring landscape, employee expectations have evolved. Job seekers now place greater value on comprehensive employee benefits packages often weighing them equally or more than salary. As a result, group insurance in Canada is no longer a perk, it is a strategic necessity.
From extended health coverage to wellness programs and disability benefits, group insurance can serve as a powerful tool for both attracting top talent and improving employee retention. This guide explores how Canadian employers can use workplace benefits to build a more resilient and engaged workforce.
Statistics Canada. 2024. Almost Half of Canadian Businesses Cite Talent Retention in Wage Decisions. Labour Shortage Analysis: Q4 2024. Ottawa: Government of Canada. Last accessed July 30, 2025.
C.D. Howe Institute. 2024. 2024 Labour Market Review: Challenges, Trends, and Policy Solutions for Canada. Toronto: C.D. Howe Institute. Last accessed July 30, 2025.
Employment and Social Development Canada. 2024. Canadian Occupational Projection System (COPS) 2024–2033. Ottawa: Government of Canada. Last accessed July 30, 2025.
Statistics Canada. 2024. Employment Insurance, November 2024. The Daily, December 2024. Ottawa: Government of Canada. Last accessed July 30, 2025.
