What are Employee Benefits?
You get offered a job with benefits. But what does that mean exactly? To many people, the main concern is the insurance benefits available. In a series of posts, we are going to explore some of the common insurance benefits provided to employees. Of course, these vary from job to job and are not available to everyone.
Extended Health Services
This is usually the big one that many people, especially families, think of and want when they’re looking at jobs.
– These cover common medical and para-medical services that are not covered by OHIP or other government insurance programs.
– Examples of services possibly provided:
o Prescription Drugs
o Prescription glasses
o Semi or Private Hospital rooms
o Travel insurance
o Massage Therapy
o Dental Care
Most plans will have a limit for these services. The limit can be per service – i.e. $500.00 in physiotherapy per year. Or for all of them “all physio, chiro, massage, etc. max of $1,000.00”.
None of these benefits are “free”. Someone, pays the premium to the insurance company. It can either be all, part or none by the employer or the employee. You can ask and you will see on your pay stub what is deducted. Who pays the premiums for the benefits can also impact the tax status of certain benefits.
Depending on the policy, there will usually be a deductible or “co-pay” for each benefit. As an example, you get a massage for $200.00. The insurance company will pay 180.00 and you pay 20.00 out of pocket. Note: if your family has a 2nd insurance company, it is possible the other company will pay for that $20.00. In other words, it’s free for you. This is called “co-ordination of benefits”.
The order of the payment depends on a few factors including who is getting the service. Sometimes it is as simple as whose birthday comes first in the year. I.e. Mom born in January and Dad in December, so kids submit to her insurance first.
Some very large organizations may be self insured- that means the company itself will pay for these benefits. Not an insurance company.
Employees should be aware that if they keep maxing out the benefits, this could impact the premium cost for the whole group and make it more expensive (they even might lose their insurance or certain types of benefits because it’s too expensive). Very few people talk about this part until its too late. As an example: assume your company is paying for premiums. If the insurer collects $1000.00 in premiums per employee per year but everyone uses $1,500.00 in benefits. The insurance company loses money and won’t offer the service or will increase the premiums to make up its losses. It may also increase the premium further to estimate future claims. This is the counter argument to the popular saying “you have the benefits, just use it up before the year ends”.
It is important to remember that every policy is different. The fine print often matters. Ask your benefits provider or your employer to explain anything you have questions about.
If you have a dispute about an insurance issue, we are always happy to discuss.
Ari J. Singer