Group health insurance for Canadian restaurant employees: A guide

In Canada’s fast-paced restaurant industry, group health insurance for restaurant employees isn’t just a perk; it’s a powerful tool for retention and operational stability. According to a report by Restaurants Canada, 62% of restaurants are operating at a loss or barely breaking even. As Canadian restaurants are facing such an enormous staffing crisis, offering employee benefits can set restaurants apart.

High turnover in restaurants creates multiple challenges, including: 

• Disrupted customer service quality
• Increased recruitment and training costs
• Decreased team morale and cohesion
• Lost institutional knowledge

Health insurance for Canadian restaurant employees helps address these issues by boosting employee satisfaction, reducing churn, and supporting physical and mental well-being. This guide breaks down how Canadian restaurant owners can build a loyal workforce with the right health insurance and employee benefits strategy.

What are the key aspects of group health insurance for restaurant employees?

Group health insurance is one of the most effective small business benefits packages that Canadian restaurant owners can use to attract and retain staff in a competitive labour market. Group policies often cost less than individual plans and provide more consistent coverage across employees.

Here are the key aspects restaurant owners should consider when selecting a group medical insurance plan for their teams.

Coverage 

A typical group medical insurance plan covers the extensive healthcare needs of employees, including routine and medical emergencies. Some of the main coverage options include:

• hospital stays
• prescription drugs
• emergency care
• paramedical services like physiotherapy
• mental health support

Some employee health insurance companies also offer optional add-ons such as dental, vision, and travel insurance, depending on the insurer and employer preferences.

Cost

Group health insurance plans typically cost less than individual plans due to risk pooling.

For small businesses with 10-50 employees, group health insurance can typically cost between $250 and $350 per employee per month. Employers can choose to cover the full premium or share the cost with employees.

Eligibility

Individuals are eligible for health insurance after a probationary period. To be eligible, employees must meet one of the following criteria: 

• 30 to 90 days of permanent employment
• Minimum weekly hour requirement of 20+ hours per week

Full-time employees are generally included, but some insurers offer flexibility for part-time or seasonal staff, which is especially relevant for restaurants with fluctuating staffing needs.

Family coverage

Most health insurance plans allow employees to add dependents, including spouses and children, for an additional premium. Offering family coverage can increase employee loyalty, particularly among older or long-term staff members.

Claim settlement

Insurers typically settle claims digitally through apps or online portals. Insurers typically provide direct billing for pharmacies and dental services, reducing upfront costs for employees and making the claims settlement process seamless.

Waiting periods

Insurers may impose waiting periods ranging from 3 to 12 months for certain healthcare benefits, including dental, vision, or maternity coverage. Employers should clarify these timelines with insurers to manage employee expectations.

Why does health insurance matter for restaurant employees in Canada?

Canada’s restaurant industry is quite competitive, with annual staff turnover often exceeding 70%. Business owners can choose to offer restaurant employee benefits in Canada, like small business health insurance, making it a game-changer in terms of recruitment and retention.

Restaurant jobs come with distinct health risks, such as:

• Physical demands and potential for injuries
• Limited or non-existent paid sick leave
• High-stress environment affecting mental health
• Irregular hours impacting sleep and wellness

Providing health insurance for restaurant employees shows your team they’re valued. It helps attract talent, boosts morale, reduces absenteeism, and supports a healthier, more stable workforce.

In a high-turnover industry, offering employee insurance is more than a perk—it’s a smart strategy for long-term employee retention and success.

What are the benefits of offering health insurance for Canadian restaurant employees?

In an industry known for high turnover and burnout, offering employee insurance helps create a more stable, motivated, and loyal team. It also strengthens your restaurant’s reputation as a responsible and attractive employer, especially as job seekers increasingly prioritize benefits alongside pay.

• Reduced turnover and training costs: Staff retention is one of the biggest challenges in the hospitality sector. Small business health insurance can be a major factor in convincing employees to stay longer, reducing the need for constant recruitment and onboarding
• Improved employee morale and loyalty: When employers value their employees and their health, it fosters a sense of trust and commitment. This can lead to a more engaged and positive work environment, where team members go the extra mile
• Competitive advantage in restaurant hiring: In a crowded job market, especially in cities with staffing shortages, offering a health plan can give your restaurant the edge over others that don’t provide benefits
• Enhanced restaurant reputation and workplace culture: Offering health coverage signals that you’re a supportive employer. It boosts your brand image, not just with current and prospective employees, but also with customers who appreciate socially responsible businesses
• Reduced absenteeism and presenteeism: Employees with access to healthcare are more likely to address issues early and stay healthier overall. This leads to fewer sick days and better performance when on the job

What challenges do Canadian restaurants face with employee health insurance?

Canadian restaurants operate on tight margins, and implementing a small business health insurance plan can feel financially out of reach, especially for small or independent establishments. On top of that, fluctuating staff hours, seasonal employment, and high turnover make it hard to offer consistent, long-term benefits.

Some of the key challenges of investing in restaurant insurance in Canada may include:

• Limited budgets make it difficult to afford comprehensive plans
• Irregular or part-time schedules that complicate eligibility and plan stability
• High employee turnover reduces the long-term value of benefits for employers
• Complexity in navigating options to find affordable, relevant coverage
• A young, temporary workforce that often doesn’t recognize the value of benefits

As a result, many restaurant workers in Canada still go without health insurance. However, this is starting to change. More employers are realizing that offering employee health benefits can reduce turnover, improve morale, and support a more reliable, productive team.

What are the health insurance options for Canadian restaurant employees?

Finding the right employee benefits for your restaurant staff can feel overwhelming, especially with tight budgets, part-time roles, and fluctuating hours. Fortunately, there are several affordable health insurance solutions for restaurants in Canada that can fit your business size, budget, and staffing model.

• Traditional group health insurance plans: These are comprehensive employer-sponsored plans that cover a wide range of medical, dental, and vision expenses. While ideal for larger teams, they may be cost-prohibitive for smaller restaurants without volume discounts
• Health Spending Accounts (HSAs): A flexible, tax-efficient solution where employers allocate a set dollar amount for employees to spend on eligible health expenses. HSAs work well for both full-time and part-time staff, with less administrative burden
• Association health plans: Many restaurant owners are joining industry associations that offer pooled group health insurance in Canada. These plans help small businesses access better rates and coverage through collective buying power
• Wellness stipends and flexible benefits: Restaurant employees can use these fixed monthly amounts on wellness-related expenses, such as gym memberships, therapy, or insurance premiums. It’s an easy way to support staff health without committing to a full group plan
• Flexible benefits for part-time and full-time staff: Consider offering tiered or voluntary participation benefits, where part-time staff can opt in. This boosts accessibility without overextending your budget

What is the cost of group health insurance for restaurant employees?

The cost of group health insurance for restaurant employees in Canada typically ranges from $150 to $350 per employee per month, depending on the level of coverage, number of employees, and how much the employer contributes. 

For small restaurants with fewer than 10 staff, a basic plan covering essentials like prescription drugs, dental care, and paramedical services may cost on the lower end. More comprehensive plans that include vision, mental health support, and employee assistance programs (EAPs) can push costs toward the higher end.

Group health insurance for 1-10 employees

Estimated monthly cost per employee: $150 – $350

Small businesses often face the highest per-employee costs because of limited risk pooling and lower bargaining power. They also tend to choose simpler plans without extensive add-ons to keep costs manageable. These plans usually include basic health, dental, vision, and paramedical services.

Group health insurance for 11-50 employees

Estimated monthly cost per employee: $250 – $350

As the number of employees increases, insurance companies can spread risk across a wider base, resulting in slightly lower average costs per employee. Businesses in this range often begin to customize plans with additional mental health support, drug coverage, or health spending accounts.

Group health insurance for 51-100 employees

Estimated monthly cost per employee: $200 – $300

At this level, employers typically qualify for more comprehensive group benefits plans with improved pricing. Many businesses begin offering tiered plans to accommodate different employee needs and roles.

What are the alternative employee benefits options for restaurant employees? 

Not every restaurant can afford a full health insurance plan, but that doesn’t mean you can’t support your staff in meaningful ways. Many restaurants in Canada are turning to creative, low-cost alternatives that still improve employee well-being, loyalty, and performance.

• Wellness programmes for food service workers: Offer access to fitness classes, stress management workshops, or wellness stipends to support physical and mental health
• Employee Assistance Programs (EAPs): EAPs are confidential services that give employees access to counselling, financial planning, and mental health support, often at a low cost to employers
• Flexible scheduling as a supplementary benefit: Predictable hours, time-off flexibility, and schedule input can greatly improve work-life balance and job satisfaction in a demanding industry
• Education and career development benefits: Providing training, certifications, or tuition support not only enhances employee skills but also increases retention and loyalty
• Discounted or free meals: Including staff meals in your benefits package is a practical and appreciated perk that can improve morale and reduce daily expenses for employees

How to choose the right health insurance plan for your restaurant?

Selecting the best health insurance for restaurant employees means balancing cost, coverage, and flexibility. With so many options on the market, it’s important to evaluate what fits your team’s needs and your budget. 

Key factors include your team size and eligibility requirements, the types of coverage offered, flexibility for part-time staff, and strategies for cost control and tax advantages.

• Team size and eligibility requirements: Some plans have minimum employee thresholds, while others require full-time status. Consider how many staff will qualify and whether your team is mostly full-time, part-time, or seasonal
• Coverage types: Look for plans that include core benefits your employees need most, such as:
  • Medical services (prescriptions, hospital care, paramedical)
  • Dental care (preventive, major, orthodontics)
  • Vision (eye exams, glasses, contact lenses)
  • Mental health support (therapy, counselling)
    
• Flexibility for part-time and full-time staff:  Employers can offer tiered or voluntary plans to allow more employees to participate, especially in an industry where part-time work is common. Employers can also offer Health Spending Accounts (HSAs) or wellness stipends as flexible add-ons
• Cost control and tax advantages: Understand your contribution options and how they impact your taxes. You can typically deduct employer-paid health benefits from your taxes, and options like HSAs can help you manage costs while still offering meaningful support

How can I get the best small business group health insurance rates in Canada?

Getting the best small business group health insurance rates in Canada isn’t just about finding the cheapest options; it’s about securing the most value for your investment while meeting the real needs of your team. To do this effectively, you need access to multiple providers, transparent comparisons, and expert guidance. That’s where PolicyAdvisor comes in.

At PolicyAdvisor, we work with 30+ leading insurance companies in Canada, giving you a wide range of group health plans to choose from. Instead of approaching each insurer individually, we simplify the process by helping you compare quotes side-by-side. 

Our team of licensed advisors takes the time to understand your business size, employee demographics, budget, and goals. Whether you’re a small restaurant with just two staff members or a growing business with a mixed team of part-time and full-time workers, we help you build the perfect benefits plan that offers real value. Schedule a call with us today!