Top 10 Reasons Why Group Health Insurance Matters


Group health insurance is crucial for employees as it aids recruitment, productivity, and financial security. These plans offer comprehensive coverage at a lower cost and benefits like tax exemptions, affordable healthcare, critical illness plans, etc.


Imagine stepping into a workplace that isn’t just about the job—it’s about looking out for you, too. That’s where group health insurance comes in. Think of an employee benefits plan as a safety net that protects you, and shows you that you are valued. 

Group health insurance is offered by employers to their employees and includes medical services like prescription drugs, preventive care, dental, and vision benefits. Some employers also choose to offer mental health, maternity care, and additional wellness benefits through a group health plan.

If you’re wondering why group health insurance is a good idea, this article explains its benefits and why offering group health is important.

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Employers are always looking for ways to boost productivity and ensure their employees are well taken care of. Offering group health insurance helps achieve these goals.

By offering comprehensive health coverage, you’re showing your team that you value their health and well-being, which can go a long way in building loyalty and job satisfaction. So, when it comes to employee benefits, group health insurance policy is a win-win.

Here’s why group health insurance is important for you as an employer:

1 Enhances employee recruitment and retention

Group health insurance is a powerful recruitment and retention tool for businesses like yours. If you’re on the hunt for talented employees, the presence of comprehensive health benefits can significantly influence a job-seeker’s decision-making process. Similarly, an existing employee is more likely to remain loyal if you prioritize their health and well-being.

2 Helps boost productivity

Offering a group health plan to your employees will reduce their worries about the financial burden, and they can focus more on their work. Employees with access to healthcare will take fewer sick days and perform better on the job. Why? Well, when they know their group health plan covers preventive measures, like regular check-ups and screenings, they’re more likely to stay on top of their health. And when people feel good, they’re more productive.

3 Increases employee loyalty

Offering a group health plan increases your company’s appeal and makes employees more loyal towards your brand. This makes your employees feel valued and protected because they know their health is safeguarded. 

How does group health insurance benefit employees?

Whether you’re looking for a job or already clocking in, staying healthy is a top priority. And one solid way to ensure that is through group medical insurance in Canada. Wondering how such a plan can benefit you as an employee? Here’s how:

4 Ensures affordable healthcare

Group health insurance gives you access to affordable medical services. By joining forces with your employers, you can benefit from negotiated group rates, reducing premiums and out-of-pocket costs. This means healthcare doesn’t strain your budget and is always within your reach.

5 Offers comprehensive coverage

Group insurance covers a range of services, from prescriptions to dental and vision care. It ensures employees have access to essential healthcare beyond basic medical needs. 

6 Employees pay lower premiums compared to individual plans

Since the cost is shared between multiple employees, group plans often have far lower premiums than an individual policy. This makes the group plan more affordable and accessible to everyone.

7 Ensures financial stability

Group health insurance covers a significant portion of your medical expenses, like hospital stays and treatments, easing financial burden during tough times. With this security, you can focus on recovery without worrying about the bills.

8 Ensures equal access

Group health insurance ensures everyone has the same access to healthcare, regardless of health status or pre-existing conditions. While individual plans might differentiate, group benefits cover all eligible employees equally. 

9 Helps address severe ailments

Critical illness policies under a group health plan cover specific critical illnesses that employees may face. These policies offer extensive coverage for severe illnesses like cancer, heart disease, or organ transplants, among others. This relieves you from the financial burden that critical illnesses impose. So, when it comes to hospitalization costs and specialized treatments, a group health plan has everything covered!

10 Group benefits offer certain tax exemptions

In Canada, some group benefits are tax-exempt. You can claim exemptions on health benefits, covering medications, dental, vision, and paramedical services, as well as on short and long-term disability insurance premiums paid by employers. Contributions to group registered pension plans (GRPPs) and deferred profit-sharing plans (DPSPs) are also tax-exempt.

Are group benefits taxable in Canada?

We won’t make this confusing for you (we promise). Whether or not a group benefit is taxable in Canada depends on its type and funding source. Broadly, employer-paid premiums for group life insurance, critical illness insurance, and accident insurance are taxable benefits. So, as an employee, you have to pay income tax on the premium amount.

However, exceptions exist. Short-term and long-term disability insurance aren’t taxable benefits, even if the employer covers the cost. Similarly, employer-paid premiums for health and dental insurance aren’t taxable.

Here are the common group benefits and their taxability in Canada:

Type of Insurance Taxable Benefit for Employer-Paid Premiums
Group Life Insurance Yes
Critical Illness Insurance Yes
Accident Insurance Yes
Short-Term Disability No
Long-Term Disability No
Health Insurance No
Dental Insurance No

What are the non-taxable group benefits in Canada?

As we mentioned earlier, some group benefits in Canada aren’t taxable. Here are the ones you can claim tax exemptions on:

  • Health benefits: Employer-paid premiums for health benefits, covering prescription medications, dental care, vision care, and paramedical services, aren’t taxable
  • Disability insurance: Employer-paid premiums for short-term and long-term disability insurance aren’t taxable
  • Retirement benefits: Employer contributions to registered pension plans (RPPs) and deferred profit-sharing plans (DPSPs) aren’t taxable

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Why aren't these benefits taxable?

In Canada, typically, all forms of compensation received from your employer, such as salaries, wages, bonuses, and even perks like employer-provided parking, are subject to taxation. However, short-term and long-term disability insurance, as well as employer-paid premiums for health and dental insurance, are not taxable because the Canada Revenue Agency (CRA) considers these as non-taxable benefits. 

Why? The rationale behind this exemption is to support employees’ health and financial well-being without imposing additional tax burdens. By excluding these benefits from taxation, the government aims at employees fully accessing the insurance coverage provided by their employers.

Which are the best group insurance providers in Canada?

To decide the best group health insurance provider in Canada, different factors like coverage options, customer service, pricing, and reputation must be considered. 

Some top providers in our experts’ opinion include:

  • Manulife Financial
  • Sun Life Financial
  • Canada Life
  • Blue Cross Canada
  • Desjardins
  • Equitable Life of Canada

However, the best provider for a business will depend on its specific needs, budget, and preferences.

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Want to understand these benefits better? Speak to our experts!
Whether you’re an employer looking for the right group health plan for your employees or a hustler looking to understand group health benefits, at PolicyAdvisor, we’ve got you covered.

Connect with our experienced, licensed advisors to apply for group health benefits for your business! Our advisors will ask you simple questions about your business, employees, and the coverage amounts you’re seeking to find the best group coverage plan for you. and get you a great employee benefits quote!

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Frequently-asked questions

What is group coverage health insurance?

Group coverage health insurance is a type of insurance plan that provides coverage to a group of people, typically employees of a company or members of an organization. It offers benefits such as medical, dental, vision, and prescription drug coverage.

Will I be taxed on a group health policy?

In Canada, group health insurance benefits provided by employers are generally not considered taxable income for employees. However, certain exceptions may apply, so it’s essential to consult with a tax professional for specific guidance.

What factors can affect the cost of a group health policy?

The greater the number of features included in the insurance plans, the higher the premium you’ll need to pay. If the group healthcare plan is tailored and includes additional benefits like daycare treatment and outpatient expenses, the premium will increase accordingly.


  • Group health insurance helps attract and retain top talent in today's competitive job market
  • By providing access to affordable healthcare and comprehensive coverage, group health insurance offers employees financial security in times of need
  • Preventive care and peace of mind are essential components of group health insurance, promoting overall well-being and job satisfaction

By Jiten Puri
CEO & Founder, Insurance Advisor, LLQP
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