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- Most insurance providers allow companies with at least two employees, including the owner, to apply for group health insurance in Canada
- In order to be eligible candidates, employees must be a permanent part of the workforce, work for 20 to 30 hours per week, reside in Canada, and often complete a waiting period
- Through group health insurance, employers get tax deductions, and employees benefit from lower premiums, simplified enrollment, and enhanced coverage options
- What is group health insurance and why does it matter?
- Minimum number of employees required to avail group health insurance
- Can sole proprietors get group health insurance?
- Which employees are eligible for group health insurance?
- Tips for small businesses to get a group health insurance plan
- How to get the best group health insurance quote in Canada?
- Frequently asked questions
Group health insurance is one of the best ways to attract and retain talented employees. If you run a small business in Canada, you might be wondering: How many employees do you really need to qualify for group health insurance? In most cases, you need at least two employees meeting the minimum hours requirement to be eligible for a group plan. But this number can vary depending on the insurance provider.
Today, many insurers offer flexible group insurance plans to fit the needs of small businesses. In this blog, we’ll break down the basic eligibility rules, who counts as an employee, and how you can qualify for a plan.
Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.
What is group health insurance and why does it matter?
Group health insurance is a type of employee benefits coverage that a business or organization offers to its employees. Instead of each employee purchasing their own plan, the employer arranges coverage through an insurance provider for the entire group of employees, often at a lower cost per person due to group pricing.
Benefits for employers
- Tax deductions: Premiums paid by the employer are typically considered a business expense and are tax-deductible
- Attract and retain talent: Health benefits are a top priority for job seekers. Offering group health coverage can make your business more appealing and help attract top talent, and improve employee satisfaction
- Enhanced team productivity: When employees feel secure about their health coverage, they’re more likely to stay focused and engaged at work, which improves productivity
Benefits for employees
- Lower premiums: Group rates are usually more affordable than individual plans, which can be beneficial for employees
- Better coverage options: Group plans often offer comprehensive benefits, including dental, vision, and prescription drugs
- Simplified enrollment: Employees can join the plan through their employer, often with minimal paperwork and without any administrative hassle
Minimum number of employees required to avail group health insurance
In Canada, most group health insurance providers require a minimum of two eligible employees to set up a plan. This generally includes the business owner plus at least one other employee. Family members and spouses of the business owner often do not count toward the minimum employee count unless they are on payroll as full-time staff.
To qualify for group health insurance, employees must usually work at the organization for at least 20 to 30 hours per week on a regular basis. Some insurers may offer flexibility for part-time workers or contract employees, but standard group plans are built for businesses with a consistent team of full-time staff.
If you have fewer than two qualifying employees, your best option may be an individual health plan or a health spending account (HSA) tailored to small business owners.
Can sole proprietors get group health insurance?
In Canada, sole proprietors or one-person businesses usually don’t qualify for group health insurance plans. Group plans are designed for companies with at least two enrolled employees. So if you’re the only one on payroll, insurers won’t issue a policy under a group structure.
However, if you operate solo, you still have several practical alternatives, including individual health insurance plans, health spending accounts and personalized benefits packages.
- Individual health insurance plans: These offer similar benefits to group plans and can be customized based on your needs and budget
- Health Spending Accounts (HSAs): You can use a health spending account (HSA) to pay for a wide range of medical expenses in a tax-free way, making it a flexible and cost-effective alternative
- Personalized benefits packages: Some providers offer plans specifically for freelancers, contractors, or microbusinesses with just one or two people
Which employees are eligible for group health insurance?
In Canada, eligible employees for group health insurance are typically those who meet specific criteria set by the insurance provider and the employer. Eligible employees may include full-time staff, individuals who are actively at work, Canadian citizens, on a company payroll, etc.
Here’s who usually qualifies:
- Full-time employees: Most insurers require employees to work at least 20 to 30 hours per week on a permanent basis
- Actively at work: The employee must be actively working (not on leave or laid off) at the time of enrollment
- On payroll: The employee must receive a regular T4 slip (proof of employment income in Canada)
- Canadian citizens: The employee must be a permanent resident of Canada to be eligible for group health insurance
- Completed waiting period: Some employers apply a waiting period (e.g., 3 months) before new hires become eligible for the benefit`
Employees on probation may become eligible for group health insurance after the probation period ends. While part-time staff or contractors are typically excluded, some insurance plans may offer limited coverage to such employees if the employer chooses to include them.
Tips for small businesses to get a group health insurance plan
When you are getting started with group health insurance as a small business owner in Canada, make sure to understand the eligibility criteria, set a realistic budget, choose the right plan type, understand the benefits packages, and work with an insurance broker for the best outcome.
- Understand the eligibility criteria: Ensure you meet the minimum requirement of having at least two eligible employees. Confirm that your team is on payroll, has provincial health coverage and are not made up solely of contractors
- Set a realistic budget: Decide how much your business can contribute monthly. Many small businesses cover 50% to 100% of employee premiums. A clear budget helps narrow down the most suitable plans according to your budget
- Choose the right plan type: Consider traditional health and dental plans or explore additional riders for better customization and extended coverage
- Review annually: Group health insurance needs can change as your team grows. Review your plan annually to ensure it still meets your employees’ needs and fits your budget
- Work with an insurance broker or an advisor: It is best to partner with a licensed group benefits advisor who understands the small business market. Companies like PolicyAdvisor have a team of dedicated experts who can help you compare quotes and find the best group health insurance for your needs
- Mandatory participation: For most small businesses, all eligible employees must participate in the group benefits plan if one is offered, unless they have comparable coverage through a spouse or partner’s plan (in which case, they may opt out of health and dental benefits only, but not other core benefits like life insurance)
How to get the best group health insurance quote in Canada?
To get the best group health insurance quote in Canada, it’s important to compare options across multiple providers—not just in terms of price, but also flexibility, coverage levels, and long-term value. That’s where PolicyAdvisor can help.
At PolicyAdvisor, we work with Canada’s top insurance providers to give small businesses access to a wide range of customized group health plans. Whether you’re a startup with just two employees or a growing team with evolving needs, we help you build a benefits package that fits your budget and goals.
Our licensed advisors guide you through every step of the process, from initial purchase to after-sales support. Schedule a call with us today to get the best group health insurance rates in Canada today!
Frequently asked questions
Can I offer separate benefits to different groups of employees within the same plan?
Yes, but with limitations. Most insurers allow you to create employee classes (e.g., management vs. staff) with customizable levels of coverage. However, you must apply consistent rules within each class to avoid discrimination and maintain plan compliance. A licensed advisor can help you structure your plan fairly and legally.
What happens to the group health insurance plan if an employee leaves the company?
When an employee leaves, their coverage under the group plan ends, typically on their last day of employment or at the end of the month, depending on the policy. Many insurers offer conversion options that allow the former employee to switch to an individual health plan without medical underwriting, as long as they apply within a set timeframe. Make sure to inform your insurance company of any personnel changes to ensure your premiums reflect the updates to your staff.
Can my business write off group health insurance premiums as a tax expense?
Yes, group health insurance premiums are generally considered a tax-deductible business expense. This means your business can reduce its taxable income while offering valuable benefits to employees. Additionally, employees typically receive these benefits tax-free, making group insurance a win-win from a tax perspective.
What if my business is seasonal or has high staff turnover?
If your workforce fluctuates, you can still offer group insurance, but you’ll need to work with a flexible provider. Choose a plan that allows easy onboarding and removal of employees throughout the year. It’s also important to clearly define eligibility and waiting periods to avoid administrative headaches during busy or off-peak seasons.
In Canada, most businesses need at least two full-time employees, including the owner, to qualify for group health insurance. These employees must typically work at least 20 to 30 hours weekly and be on payroll. Sole proprietors usually don’t qualify, but can consider individual health plans or Health Spending Accounts (HSAs). Eligible employees for group health insurance must be actively at work, have a Canadian residence permit, and often complete a waiting period. While some insurance providers may offer plans for part-time workers, top insurers mainly target consistent full-time teams for group health insurance. Employers benefit from tax deductions, while employees enjoy lower premiums and better coverage.
Canadian Life and Health Insurance Association. 2023 CLHIA Fact Book. Toronto: CLHIA, 2023.
