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Posted by Simon Pagé, Group Insurance and Group Annuity Plans Advisor, March 25 2021
Health Insurance
Why Offer Group Insurance to your Employees?

group-insurance-ramq

The group insurance plan is now a key component of employee benefits. Such insurance is very important because it safeguards the financial security of employees and their families, along with providing easier access to a range of healthcare services.

As an entrepreneur, are you unsure about offering such a plan to your employees? Do you tell yourself that they already have government coverage? This article explains why a group plan is so valuable for your business and your employees.

Coverage Provided

For Quebec residents, the public drug insurance plan (RAMQ) only covers prescription drugs. The level of reimbursements has been steadily declining since its implementation in 1997. As of January 1st, 2021, the public plan reimburses 65% of the price of medications, subject to a monthly deductible of $22.25.

Group insurance plans are much more comprehensive, and they generally include the following coverage:

  • Life insurance for employees and their dependents
  • Accidental death and dismemberment (ADD) and critical illness insurance
  • Short- and/or long-term disability
  • Health care insurance (prescription drugs, paramedical care, vision care, etc.)
  • Travel insurance
  • Dental care insurance
  • Employee and Family Assistance Program (EFAP)
  • Telemedicine

The reimbursement level for medications is selected by the employer, but it must be at least as generous as the public plan. The reimbursement level of most group plans is higher than the RAMQ minimum.

Advantages of a Group Plan

Group insurance provides a much broader coverage than government programs, which means that the physical, mental and financial health of members and their families are better protected. Below are some advantages of such plans vs. RAMQ:

For Employees

  • Coverage in the event of death and disability without evidence of insurability
  • Coverage of specialists and a wide range of medical expenses
  • Cost sharing with the employer
  • Potentially more generous drug insurance coverage than RAMQ in Quebec

For The Employer

  • Protect your investment in your employees
  • Maintain productivity
  • Foster the retention and attraction of employees
  • Maximize after-tax compensation

How Much Does It Cost?

Remember that if you are not currently offering a group insurance to your employees and if they are not covered under their spouse’s group insurance plan, they must register with RAMQ and pay an annual premium of $662 ($1,324 for a family) effective January 1st, 2021. This premium is paid at the end of the year when employees file their tax returns.

The average annual cost of a group insurance plan usually ranges from $1,500 to $4,000 per employee. However, as the cost is shared between employer and employee, the employee ends up paying somewhere between $750 and $2,000, which is closer to the RAMQ premium.

Several factors specific to the employer, the members and the plan impact the cost of group insurance (demographics, salary, industry, coverage offered, plan utilization, etc.).

The Final Decision

Ultimately, it all comes down to coverage. If you want to offer your employees comprehensive coverage that is much broader than RAMQ, a group insurance plan is the best choice.

To implement a group insurance plan that is both competitive and attractive for your employees, it is important to consult with experts. At AGA Benefit Solutions, our consultants will guide you in making the right choice for your business.

Would You Like to Get a Quote For a Group Insurance Plan?

Contact us promptly to get a free quote!

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Group Insurance and Group Annuity Plans Advisor | Holding a Bachelor of Actuarial Science degree, and Associate of the Canadian Institute of Actuaries, Simon Pagé worked as group annuity plans advisor for large consultants and actuarial firms. With his 15 years’ experience, he has developed a renowned expertise, notably in the selection, development and implementation of annuity plans. In addition, Simon holds a permit in group insurance adding to his expertise and bringing a global vision in benefits related issues for his clients.
Simon Pagé, Group Insurance and Group Annuity Plans Advisor