Employee Benefits - Do You Have The Right Coverage?

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Small businesses make up 98% of all companies with employees in Canada, according to Industry Canada. In the recent Manulife Financial Small Business Research, 66% of small business owners say they understand how offering a health benefit plan will help their business and almost all (95%) are aware satisfied employees are more productive and focused.


So why do employers resist implementing an employee benefit plan? Many employers do not have the time to spend on big picture planning – 30% say finding that time is a problem. That is where a Benefit Advisor comes in – with some basic employee information (one page), The Advisor is able to get started. This includes getting up to 10 quotes and providing a comparison package, to give a full view of what is available on the market. Plan implementation is also handled by the Advisor, with a minimal amount of time or paperwork required from the employer.


According to the Manulife report, more than half (51%) of business owners don’t believe that it’s more effective to provide benefits and would rather pay their employees higher wages. When considering offering employees a wage increase it is important to factor in the other expenses involved, such as CPP, EI, Workers’ Compensation and Employer Health Tax. Implementing an Employee Benefit plan is a more tax effective way to compensate your employees. The employee will receive the health and dental benefits tax-free and employer contributions are deductible as a business expense. Instead of paying approximately $1113 for a $1000 raise (of which

the employee will receive approximately $634 after taxes), the employer could contribute $1080 into a plan (includes Ontario Retail Sales Tax) and the employee receives $1000 in health insurance, tax free.


Employee satisfaction with their plans is also very high – According to the sanofi-aventis 2006 Healthcare Survey, if given a choice, 63% of respondents would keep their health benefits rather than receive an extra  15,000 cash payment each year! The biggest worry small business owners have when it comes to their Benefits

plan is controlling future cost increases. When you deal with a Benefit Broker, the entire benefit market is available to you. When a renewal comes in the Advisor will verify everything is fair based on the company’s experience and act accordingly. Typically the company offering the renewal will be contacted if the renewal

seems too high and a negotiation will take place. If necessary, up to 10 quotes can be obtained to get a very comprehensive evaluation of what other companies are willing to offer. By dealing directly with benefit companies (as opposed to being part of an association plan), the employer has more control

over cost. When everything is pooled, many companies are subsidizing the expenses of a small number of companies with extremely high claims. By knowing your own company’s experience, small business owners are building credibility. Benefit companies will use that to give more favourable quotes, they are more  accommodating when they have an idea of your past claims. Businesses are also able to fully customize

every aspect of the plan, controlling cost and making sure it is as efficient as possible.


In the end, the most important thing when it comes to implementing an Employee Benefit Plan is that you know exactly what you are getting and are provided with the ongoing support you deserve. By working closely with someone who cares about the needs of your company and is constantly guaranteeing you are getting the most efficient plan possible, you can do what you do best – working on your business.


Give us a call at Ecclestone Financial - (519) 843-5110, email info@efginc.ca or visit www.efginc.ca

Our office is located at 245 St. David St. N. in Fergus