FAQ / Resources

How much does a Benefits Plan Cost?

What are the Different Types of Benefits Plans Available?

How do I choose a plan and an insurer that are best for my needs?

 

How much does a Benefits Plan Cost?

This is something that cannot be answered easily. The ultimate cost of a benefits plan will depend on many factors including:

  • Your employee demographics
  • The type of plan that you choose (see below)
  • The plan design that you want
  • If there is to be cost sharing with your employees

 

What are the Different Types of Benefits Plans Available?

There are three basic types of benefits plan available today, and depending on the size of your company, all or possibly only one may be available to you:

 

Traditional Insured Plan

This type of plan is the most common in the marketplace today. It is used primarily by businesses with less than 100 employees and is fully insured. Rates are based on demographics, claims experience (for health and dental plans) and plan design. Life insurance, dependent life, accidental death & dismemberment (AD&D), short and long term disability insurance and critical coverage are also available. If your claims experience is good you will have favourable rates, if not, your health and dental rates will rise annually and be adjusted for inflation as well.

 

Administration Services Only (ASO)

An ASO plan has all the benefits available under a Traditional Plan; however the health and dental benefits are self-insured by you to a certain extent. Basically your company self-insures the day to day expected health and dental claims and insures the catastrophic or unexpected ones. These unexpected claims tend to be larger so “stop loss” coverage is purchased which pays for all health claims that exceed a certain level (like $5,000 per employee per year). The premium for the stop loss coverage is relatively low as it only pays out in the event of a very large claim. This method is becoming more and more popular as the overall costs from year to year tend to be less volatile.

 

Health & Welfare Trust (H&WT)

These plans are fully self-insured and are intended for the employer who simply wants to allocate a set amount of money for each employee annually, to be used for a wide range of health and dental expenses that are incurred. Life and disability coverage’s must be purchases separately and standalone if required. H&WT’s can also be added to any other type of plan as a “top up” or “perk” and can be used to cover things that an insured plan does not cover or used when certain limits are reached under insured plans. Many business owners have H&WT’s for their personal use.

 

How do I choose a plan and an insurer that are best for my needs?

It may seem a little overwhelming with so many choices to be made, but the consultants at Orr Insurance & Investment will walk you through the process and make sure you are well informed and comfortable with your decisions. Just give Jim Redfern and his team a call at 519.271.4340 to find out how a well-designed, tax effective benefits plan can help you and your employees. We deal with all major insurers in Canada as well as several of the smaller carriers. We canvass the market for you to ensure your needs are met. Our knowledgeable consultants deal with businesses from all walks of life and are familiar with a multitude of plans to suit each businesses’ needs.