Offering group insurance has become an essential part of attracting and retaining talent, even for small businesses in Canada. However, every team is different, with unique needs when it comes to insurance. Small businesses can customize their group insurance plans by selecting flexible coverage options, adjusting contribution strategies, and including benefits that reflect their employees’ diverse needs.

In this blog, we’ll explore the key ways small businesses can customize their group insurance plans, the advantages of doing so, and the best ways to get started with a plan that works for both the employer and their employees.

What is group health insurance in Canada?

In Canada, group health insurance provides extended health coverage that employers offer as part of an employee benefits package. Both employers and employees usually share the cost, making it more affordable than buying individual plans.

According to the Canadian Life and Health Insurance Association (CLHIA), over 26 million Canadians receive extended health benefits through group insurance. For small businesses, a customized plan offers a smart way to attract and keep talent while meeting specific team needs.

While government healthcare covers essential medical services, group health insurance helps pay for extras. These include dental care, vision, prescription drugs, paramedical services like physiotherapy, and mental health support.

Why is customizing group insurance important for small businesses?

Customizing group insurance helps small businesses offer meaningful benefits while staying cost-effective. It also helps boost employee satisfaction, improve retention rates, and provide tax advantages.

Standard insurance packages often include unnecessary features that do not align with the employee’s requirements. With customization, businesses can cut out the unnecessary features and focus on what their team actually values, like dental, mental health, vision care or more.

Here are the key benefits of customizing group insurance:

• Cost control: Businesses can set clear budgets by adjusting coverage levels, percentage of benefits paid, and the shared cost between employee and employer
• Improved employee satisfaction: Employees feel valued when they receive benefits that matter to them
• Higher retention and recruitment: Competitive, tailored benefits help attract and retain quality staff
• Scalability: Plans can evolve as the business grows or as employee needs change
• Tax advantages: Group health benefits are often tax-deductible for employers and tax-free for employees
• Support for diverse workforces: Custom options allow coverage for part-time, contract, or remote staff
• Enhanced productivity: Better health coverage can lead to healthier, more engaged employees

What types of benefits can be included in a customizable group insurance plan?

There are different types of customizable group insurance plans in Canada that offer a variety of benefits such as health, dental, vision coverage, accidental death and dismemberment (AD&D), mental health support, and more to meet the specific needs of a business and its employees. These plans allow businesses to choose the most appropriate coverage while staying within budget. 

• Core health coverage
• Prescription drug coverage
• Dental care (e.g., check-ups, cleanings, fillings, orthodontics)
• Vision care (e.g., eye exams, glasses, contact lenses)
• Life insurance (basic or enhanced)
• Accidental death and dismemberment (AD&D)
• Mental health support (e.g., therapy, counseling, stress management)
• Wellness programs (e.g., gym memberships, health screenings, smoking cessation)
• Critical illness insurance (optional add-on)
• Short-term and long-term disability insurance (optional add-on)
• Travel insurance (e.g., emergency medical, trip cancellation)
• Employee assistance programs (EAP)
• Health spending accounts (HSA) or wellness spending accounts (WSA)
• Employee & family assistance programs (EFAP)
• Chronic disease management programs
• Health and lifestyle coaching (e.g., nutrition counseling, fitness coaching)

Can a small business offer different plans to different employees?

Yes, a small business can offer different group insurance plans to different employees. Employers often create plan variations, or “classes”, based on employment categories, such as full-time vs. part-time, management vs. non-management, or permanent vs. contract staff. 

This approach is legal in Canada, as long as the plan differences are based on objective job-related criteria and not discriminatory under the Canadian Human Rights Act. For example, offering enhanced coverage to executives or long-term employees is a common practice and helps attract and retain top talent.

However, employers should document their plan structure clearly and communicate it transparently. Unequal treatment without a valid reason can create dissatisfaction or legal risk.

Is it mandatory for small businesses in Canada to offer group health insurance?

In Canada, small businesses are not legally required to offer group health insurance to their employees. While employers are obligated to provide statutory benefits, such as Employment Insurance (EI), the Canada Pension Plan (CPP), and workers’ compensation, providing health, dental, and life insurance is optional. 

However, many small businesses choose to offer group insurance as a competitive benefit to attract and retain employees. Providing these benefits can improve employee satisfaction, promote wellness, and even offer tax advantages, making it a valuable option for growing businesses.

Where can I get the best group insurance quotes in Canada?

Finding the right group insurance plan for your small business starts with comparing quotes from multiple trusted providers. With so many options available in the Canadian market, it helps to have expert guidance and access to a wide range of plans—all in one place.

At PolicyAdvisor, we partner with 30+ top insurance providers across Canada to bring you competitive group insurance quotes tailored to your needs. Our licensed insurance experts take the time to understand your business, your budget, and your team’s needs. 

We will guide you through available options, explain the details, and help you choose the best-fit plan—whether it’s basic health coverage or a fully customized package with wellness and mental health support.

Retirement planning is one of the most important financial decisions Canadians will face. Whether you’re early in your career or thinking about life after work, choosing the best way to save for retirement can significantly impact your future.

Two of the most common workplace retirement savings options are pension plans and Group Registered Retirement Savings Plans (Group RRSPs). Both of these options offer tax advantages and potential employer contributions, but they work differently and serve different needs.

In this article, we’ll help you understand the key differences, advantages, and potential drawbacks of each retirement savings plan so you can make an informed decision based on your financial goals.

Understanding Pension plans and Group RRSPs

If your employer offers both a pension plan and a Group RRSP, it’s important to understand how each works before deciding where to contribute. While both provide tax advantages and may include employer contributions, they differ significantly in structure, flexibility, and long-term benefits.

What is a pension plan?

A Registered Pension Plan (RPP) is an employer-sponsored retirement savings program designed to provide long-term income after retirement. In Canada, RPPs are formal plans regulated by federal or provincial pension legislation, ensuring strong oversight and protection for members.

There are two main types of RPPs in Canada:

• Defined Benefit (DB) Pension Plan: This offers a guaranteed retirement income plan based on salary and years of service. The employer typically handles investments and assumes the risk
• Defined Contribution (DC) Pension Plan: In this plan, contributions from the employers and employees are fixed, but the eventual retirement income depends on investment returns

What is a Group RRSP?

A Group RRSP is a retirement savings plan sponsored by an employer, but structured like a personal RRSP. Employees contribute through automatic payroll deductions, often with employer matching contributions to boost the retirement savings fund.

How do employer matching contributions impact the overall savings in a group RRSP?

Employer matching contributions significantly boost the total retirement savings within a Group RRSP. These contributions are added on top of the employee’s regular payroll deductions, essentially increasing the amount saved without additional effort from the employee. 

Over time, this compounding effect, especially when invested wisely, can result in a substantially larger retirement fund, making employer matching one of the most valuable features of a Group RRSP.

How can employers improve Group RRSP participation?

Employers can improve Group RRSP participation by implementing a well-designed plan combined with ongoing education and monitoring.

Key strategies include automatic enrollment to increase initial sign-ups, employer matching to incentivize contributions, providing digital tools to educate and motivate employees, and regularly reviewing participation data to fine-tune the program. 

Here’s what employers should do:

• Automatic enrollment: Automatically enroll employees with an opt-out option
• Employer matching: Offer matching contributions to encourage saving
• Education tools: Provide simple tools that show how savings grow over time
• Regular reviews: Monitor participation and improve the plan as needed

A well-executed Group RRSP strengthens your benefits offering and helps employees take confident steps toward a financially secure retirement.

Which are the top Group RRSP companies in Canada?

Canada’s Group RRSP market is dominated by several leading financial institutions such as Manulife, Desjardins, Sun Life, Canada Life, RBC, and BMO. Each of these insurers offer unique features to meet employees’ retirement savings needs.

• Manulife Group RRSP: A top choice for employers seeking a digitally advanced solution, Manulife’s plans benefit from the firm’s investment management strength and user-friendly digital platforms
• Desjardins Group RRSP: Known for strong client support and deep market penetration in Quebec, Desjardins offers diverse investment options, seamless plan administration, and educational tools to help employees understand their savings strategy
• Sun Life, Canada Life, RBC, and BMO: Sun Life, Canada Life, RBC, and BMO offer reliable Group RRSP programs, each varying in fee structure, fund lineup, administrative support, and financial literacy tools. Their extensive national networks and employer resources make them competitive options

How to choose the right retirement plan for your employees?

Choosing between a pension plan and a Group RRSP requires you to align with your workforce needs and long-term organizational goals. Here are some questions to consider:

• What are the demographics of your workforce?

Younger, mobile employees often prefer the flexibility of Group RRSPs, while older, long-tenured employees may value the stability of a pension

• How competitive is your benefits strategy?

In industries where talent competition is high, offering modern retirement solutions like Group RRSPs with matching employer contributions can boost recruitment and retention

• What is your budget and administrative capacity?

Group RRSPs are often easier and less expensive to administer than traditional defined benefit pension plans, making them ideal for small businesses and startups

Ultimately, Group RRSPs are well-suited for organizations seeking flexibility, lower liability, and simplified management without compromising employee value.

Should employees prioritize a Group RRSP or a pension plan?

For employees, choosing the right retirement savings tool depends on their financial goals, risk tolerance, and career plans. Here’s how you can decide between pension plans and Group RRSPs:

• When is a pension better?

If you value guaranteed retirement income and plan to stay with one employer long term, a defined benefit pension may provide more security.

• When is a Group RRSP better?

If you prefer investment control, want portability, or may change jobs often, a Group RRSP offers more flexibility and autonomy.

Many Canadians benefit from a combined approach, participating in an employer-sponsored plan while also contributing to a personal RRSP or TFSA. This strategy spreads risk and enhances long-term retirement security.

A Group Registered Retirement Savings Plan (Group RRSP) is a workplace savings program in Canada that is offered through employers and helps employees build their retirement fund. Many Canadians may wonder how a group RRSP really works, and if this benefit is the right fit for their financial goals, especially after retirement.

In this blog, we’ll break down the ins and outs of group RRSPs, explore their benefits and limitations, and help you decide whether joining a group RRSP makes sense for your financial future.

What is a group RRSP?

A Group Registered Retirement Savings Plan (Group RRSP) is a retirement savings plan set up by an employer for their employees. It works a lot like a regular RRSP, but with a few added benefits that come from being part of a group.

Your employer partners with a financial institution to offer the plan. As an employee, you choose to join the group RRSP, and once you’re in, a portion of your paycheque is automatically deducted and deposited into your Group RRSP account. These contributions are tax-deductible, which means your taxable income will be lower.

Is a Group RRSP better than an individual RRSP?

Both group retirement savings plans and individual RRSPs serve the same core purpose of helping Canadians save enough money for their retirement in a tax-advantaged way. However, they differ in how they’re set up, managed, and accessed. 

A group RRSP is arranged through your employer and often includes helpful features like payroll deductions and matching contributions. An individual RRSP, on the other hand, gives you full control but requires more initiative.

Difference between a group RRSP and an individual RRSP

How does a group registered retirement savings plan work?

If an employer is looking to start a group RRSP for employees, they should start by setting up a plan from a reliable provider. Next, the employees need to enroll themselves in the plan, choose their contribution amount, and set up automatic deductions. 

Employers may even opt for matching parts or all of the contributions that have been chosen by the employee to give them added cash value growth. Lastly, the funds are invested and the savings is monitored by the provider until an employee decides to withdraw their funds upon retirement.

• Employer sets up the plan: An employer partners with a financial institution to offer the group RRSP
• Employees enroll and choose a contribution amount: Employees can decide how much of their salary to contribute. This is usually a fixed percentage of the salary, deducted on a monthly basis
• Automatic payroll deductions: The contributions are deducted directly from the employee’s gross pay before tax is applied
• Employer may match contributions: Some employers match part of what their employees contribute, usually up to a certain limit
• Funds are invested: The contribution is then invested in the investment option of your choice, available within the plan (e.g., mutual funds), enabling tax-deferred growth until retirement

What happens to my group RRSP if I change jobs?

When you leave your job, you don’t lose the money you’ve contributed to your group RRSP. However, any employer contributions may be subject to a vesting period—the minimum period of time that an employee must be employed at a company to completely own the employer’s contribution towards their retirement. 

In Canada, most companies offering retirement benefits have a vesting period of a maximum of two years, meaning you must be employed with your existing employer for at least two years to avail their contribution to your RRSP account.

Once you’ve left your existing job after completing the vesting period, you usually have a few options:

• Transfer the funds to a personal registered retirement savings plan or another registered account to maintain the tax-deferred status. Transferring is typically the smartest choice if you want to avoid unnecessary taxes
• Leave the funds in the group registered retirement savings plan if the provider allows it. However, in this case, you won’t get new contributions as you’ve already changed jobs
• Withdraw the funds, which will be taxed as income

What are the tax advantages of participating in a group registered retirement savings plan in Canada?

One of the biggest advantages of participating in a group retirement plan is the group RRSP tax deduction. This benefit lowers your taxable income right away, giving you upfront financial relief. Here are some of the tax benefits of group RRSPs:

• Immediate tax savings: Contributions are taken from your pay before taxes are calculated, reducing your income tax automatically
• Group RRSP tax deduction: Every dollar you contribute lowers your annual taxable income, helping you keep more of your earnings for yourself
• Tax-deferred investment growth: Interest, dividends, and capital gains within the plan grow without being taxed, helping you build a substantial retirement fund
• Lower taxes in retirement: You’ll likely be in a lower tax bracket when you retire, so your withdrawals could be taxed at a reduced rate

Can I withdraw money from a group retirement savings plan before retirement?

Yes, you can generally withdraw money from a group retirement savings plan, especially if it’s a group RRSP, but there are a few important things to consider. 

A group RRSP allows early withdrawals, but any amount you take out will be subject to withholding tax and must be reported as income on your tax return. This could bump you into a higher tax bracket depending on how much you withdraw.

Withdrawing early from your group RRSP will reduce your retirement savings. Also, the contribution room —the maximum amount an employee is allowed to contribute to their RRSP in a given tax year without facing penalties —is not re-added. 

This means once you contribute a certain amount to your RRSP, you use up that portion of your lifetime RRSP limit, and even if you withdraw the money later, you cannot contribute it again. Hence, it’s best to consider withdrawing early from your group RRSP as a last resort.

How to get maximum benefits from a group registered retirement plan?

If you are looking to make the most out of your group retirement plan, make sure to contribute regularly and set up automatic deductions to never miss a payment. You should also increase your contributions annually to maximize cash value growth. Utilize the low fee structure of a group RRSP and continue to monitor your plan from time to time to ensure that your savings plan is up to date.

• Contribute regularly: Set up automatic payroll deductions to ensure consistent contributions. This will ensure that you are able to accumulate your desired amount into the savings plan
• Increase contributions over time: As your income grows, consider increasing your contributions to maximize your retirement savings
• Review the plan annually: Regularly assess your group retirement plan and make adjustments as needed to stay on track with your retirement goals
• Take advantage of low fees: Group RRSPs often have lower management fees than individual RRSPs, helping your investments grow more efficiently over time
• Review contribution room and limits: Monitor your annual RRSP contribution limit to avoid over-contribution penalties. Group RRSP contributions count toward your total RRSP room, so it is essential to monitor your limits regularly.

A Group Retirement Savings Plan (GRSP) is an employer-sponsored retirement savings program that helps employees build their retirement funds in a savings account through regular payroll contributions. Some plans, such as DB or DC pensions, require mandatory contributions by the employer. However, plans like Group RRSP leave room for employers to decide whether they want to provide matching contributions to their employees.

A group retirement savings plan is a powerful employer benefits tool that employers can utilize to attract top talent, improve employee loyalty, and offer tax-deferred cash growth for employees. In this blog, we’ll talk about the different types of group retirement plans available in Canada and why they could be a game-changer for your organization.

What are the different types of group retirement savings plans offered in Canada?

In Canada, employers can offer several types of group retirement plans to help employees save for the future, including group registered retirement savings plan (Group RRSP), deferred profit sharing plans (DPSP), defined contribution (DC) pension plans, defined benefit (DB) pension plans, pooled registered pension plans (PRPP), tax-free savings accounts (TFSA) and Voluntary Retirement Savings Plans (VRSP).

Group Registered Retirement Savings Plan (Group RRSP)

A Group RRSP is an employer-sponsored workplace retirement savings plan. Employees contribute to a retirement savings account through payroll deductions, and contributions are tax-deductible and grow tax-deferred. 

Some employers may choose to offer matching contributions into their employees’ savings accounts to maximize retirement cash value growth. Group RRSPs are easy to administer and flexible for employers and employees. Also, the funds in a Group RRSP are not locked in, meaning employees can withdraw money from their Group RRSP account at any time, though withdrawals are taxed.

Deferred Profit Sharing Plan (DPSP)

In a DPSP, only the employer contributes, and it is usually based on company profits. Contributions are tax-deferred, designed just to reward employees for company success. Employees can’t contribute to the DPSP funds. 

Also, the funds are subject to vesting rules, meaning the employee may need to work for a certain period before gaining full ownership of the funds.

Defined Contribution (DC) pension plan

In a DC plan, both the employer and the employee contribute a fixed percentage of the employee’s salary into a pension plan. 

The contribution from both parties can then be used to purchase a variety of investment options such as stocks, bonds, or mutual funds. The final cash value available to the employee at retirement depends on the total investment returns accumulated over time. 

Defined Benefit (DB) pension plan

This traditional plan promises a specific retirement income based on an employee’s salary and years of service. The employer is responsible for managing the investments and ensuring there’s enough to pay out the promised benefit. It offers stability for employees, but it is usually complex for employers.

Pooled Registered Pension Plan (PRPP)

The PRPP is designed primarily for small businesses, self-employed individuals, and workers without access to a traditional workplace plan. It is managed by a licensed financial institution, not the employer. 

The contributions in a PRPP are pooled by multiple employers and employees from different companies. This helps to reduce admin and investment costs, which is especially beneficial for small businesses and startups etc.

Both the employer and the employee can contribute to a PRPP, and the funds are locked in until retirement. PRPPs are also portable, meaning you can take your plan with you if you change jobs.

Group Tax-Free Savings Account (TFSA)

A group TFSA is often offered alongside a group RRSP, as a bundled benefits package. Employees contribute with after-tax dollars, but any investment growth and withdrawals are completely tax-free. It’s a flexible savings tool that can complement more structured retirement plans.

Voluntary Retirement Savings Plans (VRSP)

VRSPs are mandatory in Quebec for organizations that do not offer a group retirement savings plan and have a minimum of five or more working employees. VRSPs are low-cost, government-regulated plans designed to encourage retirement savings for employees in Quebec.

The employees are automatically enrolled in VRSPs, but they can always prefer to opt out of this retirement savings plan. The employers must facilitate the plan, but they are not required to mandatorily contribute to the plan.

Comparing different types of group retirement savings plans

Which companies are the top group retirement savings providers in Canada?

In Canada, some of the top group retirement plan providers include Manulife, Desjardins, Sun Life, Canada Life, RBC, and BMO. These companies offer a variety of retirement plans that employers can choose from, along with added benefits and ease of access.

Manulife

• Offers Group RRSPs, DC pension plans, DPSPs, and TFSAs
• Strong digital tools and a mobile app for easy access
• Excellent financial education and retirement planning support

Desjardins

• Offers RRSPs, TFSAs, DPSPs, and VRSPs (in Quebec)
• Known for bilingual support and personalized service
• Offers socially responsible investment options

Sun Life

• Provides full-spectrum plans including DB/DC pensions, RRSPs, and TFSAs
• Advanced analytics and employee engagement tools
• Mobile-friendly platform with personalized retirement tracking

Canada Life

• Offers RRSPs, DPSPs, DC pensions, and TFSAs
• Known for flexibility in plan design and advisor-driven support
• User-friendly digital tools for employees and plan sponsors

RBC

• Specializes in Group RRSPs, TFSAs, and DPSPs for small/mid-sized businesses
• Integrated banking and payroll services
• Simple setup process with strong customer service

BMO

• Offers Group RRSPs, TFSAs, and DPSPs with flexible contribution options
• Ideal for cost-effective plans for SMEs
• Features MyBMOPlan portal for easy plan management

Are contributions to a group retirement savings plan tax-deductible?

Yes, contributions to a group retirement savings plan are usually tax-deductible. The employee contributions for GRSPs are typically taken directly from their payroll, resulting in immediate tax savings. 

Also, both the employer and employee contributions to the group retirement plans continue to grow tax-deferred until withdrawal. This makes GRSPs a tax-efficient and preferred workplace benefit for employees.

Who is eligible to participate in a group retirement savings plan?

Full-time and part-time employees are eligible for a group retirement savings plan in Canada, usually after serving a probationary period. The employee must also be a Canadian resident and above the age of 18 to avail group retirement benefits.

• Full-time employees are most commonly eligible, usually after a probationary period (e.g., 3–6 months)
• Part-time or contract employees may be eligible, depending on the employer’s policy
• Must be a Canadian resident for tax purposes to benefit from the tax advantages
• Typically requires a minimum age of 18 to participate
• Some employers may set minimum hours worked per week as a requirement

What is the contribution limit for a group retirement plan?

A Group retirement savings plan (GRSP) shares the same contribution limits as an individual RRSP. For the 2025 tax year, the maximum contribution is up to 18% of the earned income from 2024, to a maximum of $32,490, whichever is less. ​ 

Contributions to both GRSPs and individual RRSPs are combined when assessing the annual contribution limit of an individual.​ Any contributions made by the employer to the employee’s GRSP also count toward their personal RRSP contribution room.​

It’s crucial to monitor all contributions to avoid exceeding the contribution limit. Overcontributions beyond a $2,000 buffer may incur a penalty of 1% per month on the excess amount.

Can employees withdraw funds from a GRSP before retirement?

Yes, employees can withdraw money from a GRSP account before retirement, but it comes with some downsides. 

Any money that is taken out of the group retirement savings account will be taxed as income. After the withdrawal, the employee will also need to report the full amount on their tax return. Unlike a TFSA, once a specific amount is taken out of a GRSP, the contribution room is not re-added — meaning the employee will lose some of the future tax benefits and growth potential.

Some employers may also have their own rules about when and how their employees can withdraw from the plan, so it’s always a good idea to check with the HR department or the plan provider before making any withdrawal.

A Health Spending Account (HSA) or a Health Care Spending Account (HCSA), is a Canada Revenue Agency (CRA)-approved personal healthcare fund offered by employers for their employees and eligible dependents. An increasing number of employees highlight the importance of workplace benefits. A Health Spending Account ensures that group plans move beyond a one-size-fits-all approach to give employees flexible ways to pay for healthcare. 

If you’re a small business looking for ways to make healthcare more affordable and accessible for your team, an HSA might just be the answer you’ve been looking for.

What is a Health Spending Account (HSA)?

A Health Spending Account (HSA) or a Health Care Spending Account (HCSA), is a benefit offered by employers to employees. It acts as a personal healthcare fund for employees and can be used to pay for any health, dental, or paramedical expenses. Health Spending Accounts can be set up for individual business owners, as a standalone plan, or an add-on to a group benefits plan.

The coverage limit of the HSA is set by the employer and contributions can be made according to the employees needs and budget, up to the fixed amount. 

How does a Health Spending Account work in Canada?

Employers add a pre-set annual deposit in the HSA fund that each employee can use for health expenses. Employers can offer different funds for different employee classes. For example, $10,000 for Senior Managers, $8,000 for Managers, and $5,000 for others. 

When the need arises, employees pay for eligible health services out of their own pockets. To get a reimbursement, employees submit their claim online on the insurance company’s platform where it is reviewed and repaid by the insurer. 

The insurer bills the employer, who pays an admin charge, usually 10%, plus any claim or account fees.

What are the benefits of a Health Spending Account (HSA)?

Offering an HCSA can provide several benefits for both employers and employees:

HSA benefits for employees

• Tax advantages: Contributions to HSAs are tax-deductible for employers, reducing the overall tax burden
• Cost control: HSAs can be paired with high-deductible health plans (HDHPs), which often have lower premiums than traditional health plans, potentially reducing the company’s healthcare costs
• Reduced administrative costs: Compared to more complex health benefits plans, HSAs might have lower administrative costs

HSA benefits for employers

• Tax benefits: Contributions to an HSA are tax-deductible, and withdrawals for qualified medical expenses are tax-free
• Savings for future healthcare costs: HSAs can be a savings tool for future medical expenses, including those in retirement. This can be especially useful for high-deductible plans with higher out-of-pocket costs
• Portability: The account belongs to the employee, so it remains with them if they change jobs

Which expenses are eligible in an HSA?

A Healthcare Spending Account covers a wide range of medical expenses including vision, dental, prescription medication, hospital charges, ambulance, registered medical practitioners, and more. These medical expenses are usually not covered, or are partially covered, under other traditional plans including group benefits, provincial healthcare, and private health insurance.

The list of eligible expenses are based on the specific plan and a complete list of eligible HSA expenses can be found on the CRA website. 

Can I use HSA for gym membership?

No, you cannot use an HSA for a gym membership. The Canada Revenue Agency does not recognize a gym membership as an eligible medical expense. However, under certain circumstances, if a registered medical professional prescribes a certain type of gym exercise as part of a treatment plan, some insurers may let you claim a reimbursement for the same. You will need a prescription or a letter of medical necessity in this case. 

Can I use HSA for dental?

Yes, an HSA can be used for dental expenses such as dentures, braces, dental surgery, and other orthodontic work. 

Can HSA be used for spouses?

Yes, your spouse can be covered under your HSA if you have added them as a dependent. Dependents also include your common law partner, parents, children, siblings, and grandchildren. 

How much does it cost to include an HSA in a group plan?

A Health Spending Account in an employee benefits plan is priced depending on the number of employees you want to cover, the amount you want to contribute per employee, and your provider’s pricing structure. 

The employer can select the overall coverage limit and also set different amounts for different employee categories such as owners, managers (Class A), and all other staff (Class B).

The cost of HSA account typically includes:

• Admin fee: approximately 8-10% of allotment amount
• Claim fee: approximately $3.95/claim submission
• Annual account fee: typically $100/year

Some companies may only change an admin percentage fee and no annual fee, this can vary with different insurance companies.

Is there an administration fee for HSA?

Administration fees for HCSA usually apply and vary based on the plan and provider. A common way to charge HCSA administration fees is as a percentage of the claims processed. For instance, certain plans might charge an administration fee of 10% of the total number of claims that employees file.

Health Care Spending Account: Setup and coverage

Who can set up an HSA?

To be eligible for HSA, the business has to be incorporated and the employees getting the HSA should be receiving T-4s. Small businesses with two or more employees can also set up an HSA.

Self employed proprietors who are not incorporated as a business would not be eligible to set up an HSA.

Who does an HSA cover?

An HSA covers both employees and their dependents. The eligible dependents covered in HSA are broader than a traditional group plan which only covers spouses and children as dependents.

Eligible dependents for HSA are generally defined as (this may vary depending on the insurance provider):

• Children, grandchildren, parents, grandparents, siblings, uncles, aunts, nieces, or nephews of the plan member or their spouse/common-law partner
• Dependent on the plan member for support at some point during the year
• Residents of Canada at some point during the year

How are HSA benefits taxed?

Health Spending Accounts (HSAs) are taxed differently for employees and employers. 

HSA taxation for employers: Contributions to HSAs are generally tax-deductible for employers. Employers can deduct contributions made to employees’ HSAs as business expenses.

HSA taxation for employees: Reimbursements from HSAs for eligible medical expenses are typically 100% tax-free. However, in Quebec, HSAs are considered taxable benefits for provincial income tax purposes.

To ensure non-taxable health benefits, employers must set up a Private Health Services Plan (PHSP) according to Canada Revenue Agency (CRA) guidelines. There are two types of HSA options in Canada:

Stand-alone HCSA (Private Health Services Plan/PHSP): A stand-alone HCSA functions independently of traditional health insurance plans. The employer fully funds the account, determining the amount available for each employee or class of employees. This funding is tax-deductible for the employer, and benefits received by employees are tax-free.

HCSA as part of a group benefits plan: Integrated into a group benefits plan, this option supplements existing health and dental coverage. Employees typically submit claims through their standard group benefits plan first, and any remaining eligible expenses can then be claimed through the HCSA. 

How long is an HSA deposit available?

An HSA deposit can cover expenses during the plan year and any applicable carryover period that an employer decides. There are two carryover types: credit and claims. An HSA can have either one type or none at all

Credit carryover: At the end of the benefit year, if a plan member has unused funds in their HCSA, they can carry over this balance to the following year. This transferred balance remains available for use for 365 days after the end of the plan year

Claims carryover: If a plan member has expenses that couldn’t be covered under the current HCSA due to insufficient funds or a zero balance, they can submit these claims to be covered by the deposit made into the HCSA for the following year

No carryover: Some plans don’t permit any carryover of funds or claims to the next benefit year. In such cases, any unused funds in the HCSA at the end of the benefit year are forfeited, and claims must be covered within the same year they occur

Does HSA expire?

Yes, HSAs do expire and usually require an annual renewal by the employer. In case an employee is terminated or resigns, their HSAs end on their last day of employment. Employees usually have 30-60 days to submit any expenses that they want to claim on their HSA. 

What happens to HSA money if you don’t spend it?

Unused HSA funds can be carried forward at the employer’s discretion. If they are not used in 24 months, the funds will expire. 

Can’t decide which insurer to go with? Our experts will help you pick the best group health plan!

At PolicyAdvisor, we have a team of licensed insurance experts who will guide and help you find the best group plan. With our expertise, we’ll make sure you get the most out of your HSA and are able to offer your employees comprehensive coverage and maximum benefits.

A comprehensive group benefits plan typically covers not just an employee but also their dependents. In families with two or more working adults, it is common to have more than one group health and dental insurance plan. So when a claim has to be made, which plan pays first and how are the benefits calculated? Coordination of benefits is a process that helps you understand how multiple coverages work. 

This guide explains what coordination of benefits is, how it works in Canada, and what are its advantages and challenges.

How does coordination of benefits work?

Coordination of Benefits (COB) begins with an understanding of the claim submission rules. Your first claim will be to the primary plan and any remaining amount will be covered by the secondary plan. Once your claim submission is done in the right order as laid down by your insurer, your reimbursement will be processes

Here’s how coordination of benefits work in Canada:

• Submit a claim: When you have multiple insurance plans, start by submitting your claim to your primary insurance provider
• Primary coverage: Your primary insurance provider processes the claim and pays according to your coverage and benefits
• Explanation of Benefits (EOB): Once processed, you’ll receive an Explanation of Benefits (EOB) statement detailing what was covered and what wasn’t
• Check for remaining amounts: If there are any expenses left that your primary insurance didn’t cover, you can then submit a claim to your secondary insurance provider
• Secondary coverage: Your secondary insurance provider reviews the claim and pays out based on their coverage, taking into account what your primary insurance already covered
• Reimbursement: You’ll receive reimbursement from your secondary insurance for any eligible remaining amounts, ensuring that you’re not overpaid for your expenses

What is an EOB statement?

An EOB, or Explanation of Benefits, is a document from your insurance company that explains how they handled a claim you made for medical services. It tells you what they paid for and what you might still owe.

How to calculate coordination of benefits claims?

The plan that is supposed to pay first calculates benefits without considering duplicate coverage. This means your claim will be processed like any other claim. The second paying plan calculates benefits for each item on the claim, based on the lowest of two amounts:

• The amount it would pay if it were the first plan, or
• 100% of the eligible expenses minus what the first plan already paid

Let’s consider a situation where you have $200 in eligible expenses covered under both of your plans. The first plan imposes a $25 deductible, while the second plan has no deductible. Both plans offer an 80% reimbursement rate. Here is how the reimbursement calculations play out:

Things to remember:

• Total payments from all plans can’t exceed 100% of the eligible medical or dental expenses
• Sometimes, the combined payments from all plans might be less than what you paid out of pocket
• Some plans limit visits to a health/dental practitioner per year (e.g., once every nine months), and some have an annual maximum dollar limit
• When a plan pays any benefit for a visit, it counts as a visit and contributes to any maximums under both plans

Advantages of coordination of benefits

A streamlined coordination of benefits process ensures maximum coverage with minimum out-of-pocket expenses. With effective coordination of benefits, you can get almost 100% of your claims reimbursed for eligible medical expenses. 

For instance, if you need an MRI and your primary plan covers 60% of the cost, your secondary plan will most likely cover the rest. This significantly reduces your out-of-pocket costs for medical expenses. 

A clear coordination of benefits process also helps in settling claims faster, benefitting both employees and employers. 

Challenges with coordination of benefits in Canada

Coordination of benefits in Canada can be administratively challenging, especially if the guidelines are not understood clearly. 

• Administrative and implementation challenges: The rules that multiple insurers lay down for coordinating benefits can be hard to understand. Incomplete or inaccurate information during the claims process can lead to delays, especially if the documentation is submitted in an incorrect order
• Provincial variation in COB rules: Some provinces such as Quebec have different coordination of benefits rules. For instance, if your child is covered under a work plan, a student plan, and your plan, insurers in Quebec will consider the work plan as the primary coverage, and yours as secondary. This is unlike the rest of Canada where the student plan is the primary coverage

At PolicyAdvisor, our after-sales service includes supporting you and your employees to make claims in a way that maximizes the chances of approval. Speak to one of our experts today and get an affordable group benefits plan for your organization.

How to coordinate benefits with my spouse?

To effectively coordinate benefits with your spouse, you will have to determine the primary and secondary plans that you are covered under along with the birthday rule. Here are a few key things to remember when coordinating benefits with your spouse:

• The plan your employer offers is always going to be the primary plan and will pay first 
• Any excess expense that your plan does not cover, can be covered by your spouse’s plan
• For your dependent children, the primary plan will be of the parent whose birthday falls first in a calendar year
• If you and your spouse share a birthday, the alphabetical order of your names will determine the primary and secondary plan

How can employers streamline coordination of benefits rules for their employees?

Employers can communicate coordination of benefits rules to their employees on a regular basis, ensure claims are handled efficiently with the insurer, and simplify documentation processes. 

• Effective communication: Ensure your employees have clear and accessible information on how coordination of benefits work within your organization
• Claims management: Work with your insurer to streamline the claims process
• Simplify documentation: Find an insurer that uses digital tools and processes that help employees submit and track claims 

Maximizing value in group benefits coordination

Employers can ensure their employees get maximum value by effectively coordinating their benefits with that of their common law partners or spouses. Identifying an insurer that offers group benefits with a streamlined coordination process is the first step towards achieving this goal. 

At PolicyAdvisor, we work with top Canadian insurers offering group benefits with advanced tools and streamlined processes that make claims submissions easy for employees. Our AI calculator can help you identify an affordable employee benefits package from over 30 of Canada’s insurance providers. Compare prices and make a choice in just a few minutes! 

Want personalized help? Book a no-obligation call with one of our licensed group health insurance experts today!

Some group health plans may cover Ozempic for weight loss, but it depends on your insurer, your employer’s group plan, and whether certain conditions are met.

While Ozempic is mostly used for treating Type 2 diabetes, some group insurance plans may offer coverage for weight loss purposes if medically required. In such cases, most insurers require pre-authorization for the use of Ozempic.

Wondering if your group health plan covers Ozempic for weight loss? In this blog, we explore whether group health plans in Canada cover Ozempic for weight loss, the costs involved, and what factors affect coverage eligibility. 

What is Ozempic?

Ozempic is a prescription medication primarily used to treat Type 2 diabetes. It contains semaglutide, which works by stimulating insulin production and reducing blood sugar levels. 

Recently, Ozempic has gained popularity for its secondary use: promoting weight loss. Due to its effectiveness in appetite suppression and weight management, it has become a sought-after option for people seeking to lose weight under medical supervision.

While Ozempic is not specifically approved for weight loss in Canada, many healthcare providers may prescribe it off-label for patients who could benefit from its weight management effects. Its popularity has raised questions about whether group health insurance plans cover Ozempic when it is prescribed for weight loss.

Does health insurance in Canada cover Ozempic?

Health insurance may cover Ozempic, but mostly for diabetes rather than weight loss. In Canada, insurance coverage for Ozempic varies based on the insurer, intended purpose, and specific plan. Ozempic is generally covered for diabetes management, but when prescribed solely for weight loss, coverage becomes less likely due to strict guidelines and the need for prior authorization.

If weight loss is your goal, meeting BMI criteria or demonstrating obesity-related health risks may improve your chances of approval. In most cases, prior authorization is needed, requiring healthcare documentation and a review by the insurance provider.

How much does Ozempic cost in Canada? 

Ozempic in Canada costs between $200 and $400 for approximately 4 doses. A one-month Ozempic supply costs approximately $935.77, but these costs may vary depending on the province you reside in or the pharmacy you’re sourcing your medication from.

For example, here’s how much Ozempic costs in various pharmacies for a 0.5 mg pen, as listed on SingleCare:

Factors affecting coverage for Ozempic and weight loss medications in Canada

Coverage for Ozempic under employee insurance often depends on medical necessity, plan design, and whether Ozempic is included in the insurer’s drug formulary.

• Requirements for medical necessity and prior authorization: Most group health insurance plans will require that Ozempic be deemed medically necessary to qualify for coverage. Prior authorization is also common, meaning the insurer must approve the prescription before it is covered
• Employer preferences and group plan customization: Employers have some say in the customization of their group health insurance offerings. This means that coverage for certain medications, including Ozempic for weight loss, might be included or excluded based on the employer’s decisions
• Inclusion in drug formularies and approval criteria: The insurance company’s drug formulary is a list of medications covered under the group health plan. If Ozempic is included, the insurer may cover it under specific conditions

How much is a 3-month prescription of Ozempic?

A 3-month prescription of Ozempic typically costs around $450, while a 2-month supply is priced at approximately $300. 

If you have group insurance, you may qualify for savings programs that can reduce your out-of-pocket expenses. If you’re eligible, the Ozempic Savings Card can reduce costs to as low as $25 for a 3-month prescription, depending on your coverage.

What is an Ozempic Savings Card?

Ozempic Savings Card is a coupon card offered by Novo Nordisk, Ozempic’s manufacturer, to help buyers reduce the cost of their prescription. To qualify for the Ozempic Savings Card in Canada, you must have private health insurance, be prescribed Ozempic for the treatment of type 2 diabetes, and receive prior authorization from your healthcare provider.

Which insurance companies offer coverage for Ozempic in Canada?

Insurers such as Manulife, Blue Cross, and Canada Life may offer coverage for Ozempic in Canada. Coverage for Ozempic and other weight loss medications depends largely on the insurer and the specific group health plan an employer selects. Some top Canadian insurers that may offer coverage include:

• Manulife: Manulife offers group benefit plans that may include coverage for specialty medications like Ozempic. Employees may need to complete a prior authorization form to determine eligibility
• Blue Cross: Blue Cross also provides coverage for specialty drugs under some group plans. Coverage details, including any conditions that must be met, depend on the group plan’s specifics
• Canada Life: Similar to other insurers, Canada Life requires a completed authorization form for specialty medications. Group plans can be customized, which means Ozempic might be covered under certain conditions

Does Manulife cover Ozempic for weight loss?

No, Manulife does not cover Ozempic for weight loss, except under the Manulife Guaranteed Issue Enhanced Plan. Ozempic is only covered for individuals with Type 2 diabetes and solely when prescribed for managing that condition. Manulife adheres to Health Canada’s guidelines, which do not approve Ozempic for obesity treatment.

Employee benefits play an important role to ensure financial stability and job security in Canada’s workforce. Group benefits are categorized into mandatory benefits (those required by law) and optional/supplementary benefits, which employers may choose to offer voluntarily to enhance employee well-being.

In this article, we’ll take you through the mandatory employee benefits in Canada that employers must provide to comply with federal and provincial laws.

What are the statutory holidays in Canada? 

Paid public holidays are mandatory across Canada to ensure that employees receive a day off with pay. While statutory holidays may vary by province, common mandatory holidays include:

What are the rules for vacation pay in Canada?

In Canada, vacation benefits vary based on employment standards set by each province and territory. The following table gives an overview of the provincial vacation entitlement in Canada:

Can you take maternity and paternal leave in Canada?

Yes, employees are entitled to 17 weeks of maternity leave, which can begin up to 13 weeks before the expected delivery date. For adoptive parents, 63 weeks of parental leave is available. This leave can be taken by one parent or shared between both parents.

What is the sick leave rule in Canada?

Different provinces have varying rules when it comes to sick leave. Some of the key features of sick leave as an employee benefit are:

• Employees receive a fixed number of sick days at the start of each year, regardless of when they join
• Sick leave is not pro-rated; employees who start mid-year still receive the full entitlement
• Unused sick leave cannot be cashed out or carried over to the following year

What are the optional employee benefits in Canada?

Optional employee benefits include group health benefits, group registered retirement savings plans (RRSPs), health spending accounts (HSAs), disability insurance (DI), critical illness coverage, life insurance, additional paid days off, wellness programs, transportation allowances, and cash bonuses.

Optional group health benefits may also include other supplemental benefits such as:

• Stock options
• Retirement savings programs
• Employee training and development
• Flexible work schedules
• Remote work
• Compassionate care leave
• Indigenous employee leave
• Childcare benefits

Healthcare costs in Canada keep rising with a doctor’s visit costing between $100 and $600, and an emergency room or hospitalization costing as high as $6,000 per day!

In these situations, small and mid-sized companies often struggle to afford group health insurance. Pooled benefits provide a cost-effective solution by sharing risks across multiple employers.

In this article, we’ll explain what pooled benefits are, how they compare to traditional group insurance, and the key advantages they offer businesses. We’ll also explore different types of pooled employer plans and factors to consider when choosing a plan.

How do pooled benefits work?

Pooled benefits allow small businesses to access stable and cost-effective group insurance by sharing risk with other companies.

• Mechanics: Insurance providers aggregate multiple small groups into a single risk pool, with premiums based on the collective claims experience rather than individual company claims
• Administration: Insurers handle enrollment and claims processing, simplifying management for employers
• Eligibility: Typically available to small businesses that meet insurer criteria

This means, that if one business in the pool experiences a spike in claims, the overall impact on premiums is minimized because costs are spread across the entire pool.

What are the types of employee benefits pooling?

Employee benefits plans can involve pooling in different ways, depending on your organization’s needs. However, there are three ways benefits are commonly pooled:

• Full plan pooling: The benefits plan is pooled with other organizations, transferring all risk to the insurer. This is ideal for small groups (e.g., 10 employees) where even minor claim increases could significantly impact costs
• Selective benefit pooling: Only high-risk benefits (e.g., long-term disability, life insurance) are pooled, while more predictable benefits (e.g., health, dental) remain unpooled. Larger groups (e.g., 200 employees) can opt for this to benefit from lower-than-expected claims
• Claim-level pooling: Specific high-cost risks within a benefit category such as unlimited prescription drug coverage or out-of-country claims are pooled to prevent financial strain. This approach is typically used for very large groups (1,000+ employees)
• Hybrid pooling: This type of plan combines elements of self-insurance and fully insured plans and allows employers to share risk while maintaining cost control. Under this model, employers cover predictable claims up to a set threshold, while insurers or a pool of employers absorb larger, unpredictable claims. It’s ideal for mid-sized businesses looking to balance affordability with comprehensive employee benefits.

What are the key advantages of pooled benefits?

Pooled benefits are cost-efficient, help in managing risks efficiently, allow for predictable budgeting, and offer access to comprehensive coverage for employees.

Cost efficiency

• Pooled benefits lower premiums by spreading risks across multiple companies
• Businesses avoid sudden cost increases due to high claims

Risk management

• Claims are distributed among a larger group, reducing the impact on individual employers
• Businesses don’t face large premium hikes after a bad claims year

Predictable budgeting

• Costs remain stable, making it easier for businesses to plan ahead
• Employers avoid unexpected financial strain from high claims

Access to comprehensive coverage

• Smaller businesses can access benefits that would otherwise be too expensive
• Employees get a better benefits package, improving satisfaction and retention

Increased employee satisfaction

• Stable and comprehensive benefits create a sense of security and well-being
• Competitive benefits improve employee morale, loyalty, and overall workplace engagement

How to choose the best pooled benefits plan in Canada?

Selecting the right pooled benefits plan depends on your business size, employee needs, and budget. Here are key factors to consider:

• Determine your company’s needs 
• Understand whether employees value retirement savings, health coverage, or both
• Speak to our group health insurance advisors and compare plans from across 30+ insurers in Canada

Looking for affordable pooled benefits plans? Let our advisors help you!

Our expert advisors specialize in group benefits and will guide you through selecting the right plan for your business.

• Compare plans – We work with 30+ top providers to find the best fit for your company
• Smart matching – Get connected with the right advisor based on your business needs and goals
• No-obligation consultation – Ask questions and get clear recommendations without any pressure

Make the right choice for your team. Schedule a free consultation with PolicyAdvisor today!

Yes, in Canada, remote workers are entitled to both mandatory and supplemental benefits to help them maintain their health, financial security, and overall well-being.

Employers must ensure that the group health benefits for remote employees are the same as their in-office counterparts, adhering to provincial employment standards. 

Are remote employees covered under workers’ compensation insurance?

Yes, remote employees in Canada are covered under workers’ compensation insurance as long as their illness or injury occurs during work hours. Each province in Canada has specific regulations regarding workers’ compensation benefits for remote employees. 

Additionally, the cost of workers’ compensation insurance varies by industry, province, and the level of risk associated with an employee’s job duties.

Employers should work with workers’ compensation insurance companies to ensure compliance and adequate coverage for remote employees.

Do remote employees face any challenges in proving work-related injuries?

Yes, remote employees face several challenges when proving that an injury is work-related, primarily due to the lack of direct workplace oversight. Some of the most common challenges are:

• Blurred work boundaries: Unlike traditional office settings, remote workspaces overlap with personal spaces, making it harder to establish if an injury occurred during work hours or personal time
• Lack of witnesses: Without coworkers or supervisors present, verifying the circumstances of an injury can be difficult. Employers and insurers may require additional proof, such as time-stamped messages or work logs
  
• Defining a workplace: Work-from-home setups vary, and insurers may question whether an injury occurred in a designated work area or while performing work-related tasks
  
• Ergonomic and repetitive strain injuries: Proving that conditions like carpal tunnel syndrome or back pain are directly caused by work rather than personal lifestyle choices can be complex

Which insurance companies offer the best employee benefits for remote workers?

Leading insurance providers in Canada that offer strong employee benefits for remote workers include Manulife, Canada Life, Desjardins, and Equitable Life. 

Each insurer provides flexible group benefits plans that can support remote teams with virtual healthcare, mental health services, and home office stipends.

If you’re looking for the best group health insurance plan for your remote employees, we recommend scheduling a call with our experienced group insurance advisors.

Our advisors will help you compare policies from across 30+ top insurance companies in Canada and find a policy that best meets your needs!