Frequently Asked Questions


Group Insurance Employee Benefits
Q: How much is it going to cost?
Q: What benefits are mandatory?
Q: My premiums keep going up every year, what can I do about it?
Q: What should I do if our group has a Life Insurance, Disability, or Critical Illness Claim?
Q: What is the largest/smallest group you can work with?
Q: Will switching insurance companies save me money?
Q: Why do I only receive $10 back when I go to the Chiropractor/physiotherapist/masseuse/etc?
Q: Coordination of Benefits
Q: Taxation of Benefits
Q: Waiving benefits
Q: Refusal of benefits
Q: Do I need to have a medical exam to get group insurance?
Q: What is a No-Evidence Maximum
Q: I am over 65 and still working, do I still receive benefits?
Q: We are a non-Profit/Charitable organization; can we have a benefits plan?
Q: Can part time employees receive benefits?
Q: My Questions wasn’t answered, what should I do

Group Insurance FAQ


 

Q: How much is it going to cost?

A: The cost of a benefits plan depends on many factors including the ages and demographics of your group, as well as the benefit levels you select. A general rule of thumb is that a benefits plan will cost between 3-5% of your annual payroll.

 

Q: What benefits are mandatory?

A: In most cases a minimum amount of Life Insurance ($10,000) is mandatory, plus one additional major benefit including: Health Care, Dental Care or Long Term Disability.

 

Q: My premiums keep going up every year, what can I do about it?

A: This is the most difficult question to answer, every group is different but the main thing you can do is modify your plan design to take advantage of cost saving features. Consider switching from Brand Name Drugs to Generic Equivalents, annual maximums for Dental Plans or using conditional drug formulates. Please see our suggested plan designs to help reduce and control costs with a minimum impact on plan members

recommended plan design options.doc

 

Q: What should I do if our group has a Life Insurance, Disability, or Critical Illness Claim?

A: Contact our office ASAP, we will help guide you through the claim process by hand.

 

Q: What is the largest/smallest group you can work with?

A: We provide benefits to organizations of all sizes. For individuals we can set up personal health and dental insurance, as well as Health and Welfare Trusts which allow Disability and Critical Illness Insurance to be non-taxable. For Large groups we can administrate groups with hundreds or even thousands of members.

 

Q: Will switching insurance companies save me money?

A: Possibly, the “big three” Great West Life, Sun Life and Manulife are all very similar in terms of rates and products. Switching between these carriers usually only saves money in the form of a New Business discount, which eventually gets clawed back into the rates. Changing carriers is only recommended if you are current experiencing problems with an existing carrier, if administration becomes easier, or if a product of service is only available elsewhere. Shifting to a more efficient carrier with lower overhead may save you several percentage points on your premium, but it may reduce the level of service received. We like to focus more on plan design changes, and member education to save money.

 

Q: Why do I only receive $10 back when I go to the Chiropractor/physiotherapist/masseuse/etc?

A: Several years ago the provincial health care plan provided coverage for Paramedical Practitioners such as those listed above. The province reimbursed 100% of the cost, less a $10 user fee. At the time Insurance companies only needed to reimburse the $10 user fee. When the province removed coverage for Paramedical Practitioners, not all insurance contracts changed their benefits due to the cost it would incur. Many contracts still only reimburse the old $10 user fee, or sometimes only 80% of the user fee ($8).

 

 Q: Coordination of Benefits

A: Coordination of Benefits is when two spouses have coverage through two different plans; there are well defined rules which determine which plan pays which expenses first, or second. Please see Manulife's explanation of Coordination of Benefits.

 

Q: Taxation of Benefits

A: Generally speaking, Health and Dental expenses are deductible and non-taxable to employees. For this reason the employer should contribute to these benefits. Conversely, Life Insurance and Disability Insurance are taxable benefits to employees. If the employer pays any portion of a Disability premium, that benefit becomes taxable to the employee at time of claim. For this reason employee contributions should be directed to pay the Disability and Life Insurance premiums.

More Information: Taxation of your employee benefits plan

 

Q: Waiving benefits

A: You may only waive benefits if you have coverage elsewhere such as a spousal plan. You may only waive Extended Health and/or Dental coverage. You must still participate in all other benefits such as Life Insurance and Disability Insurance. Typically you will choose the plan which provides the best benefits or the plan where the employer pays the majority of the costs. You may waive coverage from the other plan by completing a waiver form available from your employer

 

Q: Refusal of benefits

A: If your benefits plan is 100% employer paid you may not refuse benefits. If your plan involves employer/employee cost sharing you "may" be able to refuse benefits if your plan does not require mandatory participation (rare). If you refuse benefits, you must sign a Refusal of Benefits form, waiving your right to participate in the plan. If you wish to rejoin the plan you will be required to complete an Evidence of Insurability Declaration, your application will be reviewed by underwriting, and may be declined. If your application is approved you will have a dental limit of approximately $200 for the first 12 months. WE HIGHLY RECOMMEND NOT REFUSING BENEFITS FOR ANY REASON.

 

Q: Do I need to have a medical exam to get group insurance?

A: No, unlike individual policies, you do not need a medical exam to receive benefits. It is assumed that if you are healthy enough to work full time, you are healthy enough to insure. For large amounts of Life, Critical Illness or Disability Insurance, you may be required to answer a few medical questions; however, you are always entitled to a guaranteed minimum amount of insurance, called a No-Evidence Maximum.

 

Q: What is a No-Evidence Maximum?

A: A No-Evidence Maximum or NEM is the maximum amount of insurance a carrier is willing to provide an employee without any medical information. For example, a Long Term Disability plan has a No-Evidence Maximum of $2000/month. John qualifies for $2500/ month in benefit. John will automatically receive the $2000/month NEM benefit without ever providing any medical information. However, if John wants to receive his full benefit of $2500, he will have to complete a short medical questionnaire. John will either be approved for the additional insurance or declined, based on his health. Even if John is declined he still receives his $2000/month benefit guaranteed.

 

Q: I am over 65 and still working, do I still receive benefits?

A: BC recently abolished the mandatory retirement age of 65. You are now entitled to work as long as you wish. Insurance companies have started to modify their policies to reflect this change, however, progress is slow. Each policy will be different, however, in most cases Life and Disability Insurance will reduce or terminate at age 65, while Health and Dental benefits should continue unchanged.

 

Q: We are a non-Profit/Charitable organization; can we have a benefits plan?

A: Yes, we have numerous non-profit or charitable clients. The benefits that are available are somewhat determined by the sources of funding your organization receives. If more than 50% of your funding comes from government sources, you may not be able to receive Long Term Disability benefits. All other benefits are still available.

 

Q: Can part time employees receive benefits?

A: Usually yes, as long as the employee works at least 25 hours a week, and is a permanent employee.

 

Q: My Questions wasn’t answered, what should I do

A: Contact our office by email or phone and we will be happy to provide you with a detailed answer.

 

 
 

HMR Employee Benefits Ltd. 206-2187 Oak Bay Avenue - Victoria , BC V8R 1G1 PHONE: (250) 592-4614 - TOLL FREE: 1-888-592-4614 Fax: (250) 592-4953 - EMAIL:
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