Health insurance for small business owners

What will they ask about my business on a group health insurance application?

Applications for group health insurance are a little different from individual plans. With private health insurance, the insurance provider is concerned about the individual’s health history and age. With group insurance, they don’t do as much individual underwriting. Instead, they’ll want to know more about the general employee demographics.

Employees will notice that when they sign up for their group employee benefits, they won’t be asked as many health questions that normally come with individual insurance applications. Instead, the underwriting factors are more heavily weighted on your business’s claims history and industry claims history. If your employees claim a lot, the insurance company will price their premiums accordingly.

What is a pooled insurance plan?

The two biggest factors in determining the price of your group health insurance is your claims history and industry. But what if it’s your first time? Or what if your business is in a high-risk industry? If you don’t have any history, an insurance company might put you in a pooled insurance plan. They pool your business with others so that they can collect the premiums from everyone and use that to cover any claims. Pooling the risk like this allows the higher costs of the less healthy to be offset by the relatively lower costs of the healthy.

Once you have a few years of claims history under your belt, you may qualify for your own individual pricing. This is because the insurance underwriter has a better idea of how often they’ll be paying out for your employee’s claims.

Having health insurance means more than financial protection—it provides peace of mind. Your quality of life is directly linked to your health care. Having health insurance allows you to focus on your well-being without worrying about potential expenses. And that is priceless!

How much does a small business employee benefits package cost in Canada

The cost of a group insurance plan for a small business owner will really depend on their employee demographics, claims history, and plan details. In general, the larger the employee base, the cheaper the cost per employee. This is because the insurance company can spread the risk out—the employees that don’t claim a lot make up for the ones that do. For a small business, the price will be more contingent on industry type and claims history.

Who pays the group insurance premiums?

It depends on the company. Some companies will provide their health and dental plans to their employees completely free. This means the business owner will cover all the health insurance premiums. Other businesses will charge a small fee to their employees to participate—usually deducting this premium directly from the employee’s paycheck. Some small businesses will offer free participation for standard plans and if the employees want more comprehensive coverage, they can opt for additional deductions from their pay.

Are group benefits tax deductible in Canada?

Yes, group benefits provided by an employer are generally tax-deductible in Canada. Employers can deduct the cost of providing group benefits, such as health and dental insurance, from their business income when calculating their taxable income.

Get quotes for group health and dental insurance 

If you’re looking for an affordable group benefits plan for your small business, or business of any size for that matter, our licensed insurance experts at PolicyAdvisor are here to help. We’ll ask some questions about your business (like the ones listed above) and shop around to find you the best rate for health benefit plans for your employees.

Book a call with one of our friendly expert insurance advisors to chat about protecting your personal and financial health today!

Are employee benefits mandatory?

No. Employee benefits, such as health insurance, are not mandatory. However, providing insurance for your employees may provide that competitive edge your business needs to maintain employee retention. The premium costs may seem like another additional expense to take on, but ultimately having a healthy and consistent employee base will save you money in high turnover costs. Plus, insurance premiums can be claimed as tax-deductible business expenses.

What is the cheapest group health insurance for small businesses?

Some plans offer group benefits for as low as $25-75 per employee, but it depends on the plan. Cheap plans usually mean minimal coverage—just basic medical expenses with no dental, vision, and/or minimal paramedical expense coverage. However, cheaping out on benefits can leave your employees high and dry when they need the coverage the most. Having a healthy employee base means they’re able to work and having adequate coverage to pay for health expenses is an important aspect of this.

What is an HSA?

An HSA is short for “Health Spending Account.” This is an additional benefit sometimes included in group health insurance plans that a lot a certain dollar amount each year for an employee to spend on health-promotional or recreational products. For example, you might use your health spending account to pay for part of your gym membership, an exercise bike, or an Apple watch. It’s designed to offer flexible coverage for services and items that still promote healthy living but don’t necessarily fit.

How much do benefits cost per employee?

The cost of group benefits really depends on your group plan. Generally, it can range from $50-$300 per month per employee. Some employers will have their employees contribute a fraction of this premium to help cover the cost. Business owners can also count these premiums as a deductible business expense on their tax return.

Do certain small businesses get discounts depending on their industry?

It’s not a discount, per se. But industry type is one of the more weighted factors in determining the price of group insurance. If historically, that industry has more claims than others, businesses in that industry would have higher premiums for their group insurance.