Group insurance is the foundation of employee benefits in Canada. Millions of Canadians receive health, dental, life, disability, and other coverage through their employer's group benefits plan. Understanding how your group insurance works — and its limitations — helps you use it effectively and identify gaps that need individual coverage. This guide explains group insurance in Canada.
Group insurance is insurance provided to a group of people — typically employees of a company — under a single master policy. The employer negotiates the plan terms and typically pays part or all of the premium. Employees are enrolled as members without individual underwriting (pre-existing conditions are generally covered in group plans, unlike individual policies).
If both you and your spouse have group benefits from different employers, coordination of benefits (COB) allows you to claim from both plans. The primary plan pays first (typically your own plan for your expenses), and the secondary plan covers remaining costs up to 100% of the eligible expense. COB can dramatically reduce out-of-pocket costs for families with dual coverage.
Group insurance has important limitations: coverage ends when employment ends, life insurance is typically not portable, disability coverage may have a more restrictive definition after 2 years, and benefit amounts may be insufficient for higher earners. Individual coverage supplements group benefits where gaps exist.
Many employers supplement traditional group benefits with a Health Spending Account (HSA). HSAs provide a fixed annual dollar amount (commonly $500–$2,000) that employees can apply to any eligible health or dental expense not covered by the base plan. Amounts not used by year-end may be carried over (rules vary by plan). HSAs provide flexibility where traditional benefit plans are rigid.
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