Employee Benefits Canada

Summary

In this engaging video, benefits advisor Shannon Hughes and host Andrea Adams dive into the intricacies of employer-sponsored benefit plans. They explore essential components like life insurance, accidental death and dismemberment, critical illness coverage, and disability benefits. The discussion also covers health and dental plans, paramedical benefits, and the flexibility of health spending accounts. Shannon highlights key considerations for employers when offering these benefits, emphasizing the importance of educating employees about their coverage. The episode also touches on the value of employee assistance programs and the growing role of mental health support in workplace benefits.

Takeaways

• 😀 Life insurance is a mandatory component of employee benefit plans, but it doesn't fully cover an individual's needs due to varying requirements across a diverse workforce.
• 😀 Accidental Death and Dismemberment (AD&D) insurance is paired with life insurance and provides additional coverage in the event of an accidental death or dismemberment (e.g., loss of limbs or paralysis).
• 😀 Critical illness insurance provides a lump sum payment to employees after surviving a qualifying illness (e.g., heart attack, stroke, cancer) and can be used for any medical-related expenses.
• 😀 Disability insurance, both short-term and long-term, is crucial for income replacement in case of illness or injury, with short-term disability typically lasting up to four months.
• 😀 Long-term disability can cover income replacement until the age of 65, and can be tailored to different benefit periods, which impact the cost of the plan.
• 😀 Health benefits (e.g., prescription drugs, medical services) and dental coverage are common components of employer-sponsored plans, providing support for everyday health needs.
• 😀 Health plans often include emergency out-of-country coverage for medical expenses incurred while traveling, which many employees are unaware of.
• 😀 Vision care, while valuable, is costly to add to a benefits plan and is only used by about 50% of employees who require glasses or vision correction.
• 😀 Paramedical benefits (e.g., physiotherapy, chiropractic care, massage therapy) are important for proactive health care, but can be a significant cost driver in a benefits plan.
• 😀 Employee Education is key to ensuring that employees understand and value their benefits. Tools like 'Benefits at a Glance' documents and educational sessions can help raise awareness.
• 😀 Health Spending Accounts (HSAs) offer employees flexibility to use tax-free money for medical expenses not covered by traditional health plans, while Wellness Accounts provide a taxable alternative.

Q & A

What is the main goal of this video?

The goal of the video is to explore the different types of benefits that an employer can offer through insurance companies, providing an insightful breakdown of each benefit and its value to employees.

What is the role of life insurance in employee benefits, and why is it important?

Life insurance is a mandatory component of most employee benefit plans, designed to provide financial protection to employees' beneficiaries in case of the employee's death. However, it typically does not cover all the diverse needs of individuals in a company, as coverage amounts can vary based on earnings or a flat amount.

How does accidental death and dismemberment (AD&D) insurance work?

AD&D insurance complements life insurance by paying out if an employee's death is accidental, often doubling the life insurance payout. It also covers cases of dismemberment, such as the loss of limbs or paralysis, based on a specific payout schedule.

What is critical illness insurance, and how does it benefit employees?

Critical illness insurance provides a lump sum, tax-free benefit to employees who survive a certain period after being diagnosed with covered conditions like heart attacks, strokes, or cancer. The benefit helps cover additional costs associated with illness, such as home modifications or family support during hospitalization.

Why is disability insurance essential, and how is it structured?

Disability insurance replaces a portion of an employee’s income if they are unable to work due to illness or injury. Short-term disability typically covers up to four months, while long-term disability can provide coverage up to age 65, depending on the plan. Employees often pay for this benefit to avoid taxation on premiums.

What are the differences between short-term and long-term disability insurance?

Short-term disability insurance provides coverage for a temporary period, usually up to four months, and is designed to replace a percentage of weekly earnings. Long-term disability insurance, on the other hand, provides ongoing income replacement for longer periods, potentially up to age 65, and often comes with a higher level of coverage.

How can employers educate employees about their benefit plans?

Employers can use clear, jargon-free communication and educational tools like a 'Benefits at a Glance' document, and conduct employee education sessions to ensure workers understand their benefits. A drip approach to providing information gradually can also help employees become more familiar with the offerings.

What are health spending accounts, and how do they work?

Health spending accounts (HSAs) are tax-free accounts provided by employers, where employees can access funds to cover medical or dental expenses not fully paid by the primary benefits plan. These accounts offer flexibility in how employees use the funds, and they can be used for a wide range of health-related expenses.

What is the difference between a health spending account and a wellness account?

A health spending account (HSA) is non-taxable and can be used for a variety of medical and dental expenses, while a wellness account is taxable and typically covers non-medical wellness-related items, like gym memberships or other health-related activities. The claims through wellness accounts are added to an employee's taxable income.

What is the Employee and Family Assistance Program (EFAP), and why is it valuable?

The EFAP provides confidential counseling services to employees and their families, often focused on short-term solutions for mental health and personal challenges. Despite being an underutilized benefit, EFAPs are crucial for promoting employee well-being and productivity, especially during stressful times like a pandemic.

Are EFAPs expensive, and how do they benefit organizations?

No, EFAPs are relatively affordable, typically costing between $3 and $7 per employee per month. They provide valuable support for mental health, helping improve employee engagement, reduce absenteeism, and enhance overall productivity at a low cost to employers.