The benefits of setting up a group insurance plan often overlookedBy Rosemary McCracken | April 10 2015 09:00AM
Businesses that hire employees will need to consider whether to offer group life and health benefits as a part of their employees’ compensation.John Carinci, Toronto-based head of group and business markets at RBC Insurance, cited a 2011 Sanofi-Aventis Healthcare Survey that found that 60% of Canadian employees in a wide range of industries would prefer an employer-funded benefits package to a $10,000 increase in annual salary. However, a recent study by Carinci’s own team at RBC Insurance found that only 50% of business owners are aware that employees feel this way, and up to 75% do not provide group benefit plans.
“Employees value and want life and health coverage,” Carinci said. “And there are a variety of options for employers to look at. What’s important is to identify the business’s objectives. Is it to attract and retain top talent, or to cover the basics?”
Coverage can be completely employer funded, or there could be a level of co-pay, he added. “Fifty per cent is usually the maximum the employee has to contribute.”
With drug costs soaring, group life and health coverage are now table stakes for attracting and retaining employees, added Heather Clarke, Winnipeg-based vice-president of IG Insurance Services Inc. “And insurance companies are coming up with innovative ways to address higher drug costs such as giving employers discounts for offering alternative suppliers and making generic drugs mandatory.”