5 Factors to Consider When Reviewing Your Employee Benefits Plan
According to a survey by Monster.com in collaboration with group benefit provider Unum, an attractive employee benefits package was rated very important by 74 per cent of those surveyed.
Less important were dollars and cents issues. In this regard, a high base salary was very important to 66 per cent and a little more than one-half of the people surveyed indicated that bonuses were very important.
Here are five issues to consider when reviewing your group employee benefit plans:
1. What kind of plan makes sense for your organization?
It could be (i) a traditional plan which normally includes heath & dental, long-term disability, accidental death & dismemberment, and group life insurance; (ii) a flexible benefit plan; or (iii) a hybrid plan.
Did you know that under most group plans, the extended health and dental
plan primarily drives premium costs.
2. Should your organization buy insurance for group benefits or self-insure?
Did you know that if your claims history is constant and relatively predictable then a self-administered plan may made sense for your organization. If an employer pays premiums to the insurer then generally any disputes about
benefit coverage is between the employee and the insurer.
3. Who pays the premium costs for group benefit insurance?
If your organization decides to purchase group benefit insurance then who pays the premium costs? Most insurers require employers to pay at least 50 % of the premium costs.
Did you know that if an employee pays the premium costs for LTD insurance then the employee receives the benefits tax free; otherwise, the benefits are taxable.
4. What group benefits can be continued for a terminated employee?
This can be an important issue in wrongful dismissal cases. If the employer does not continue the employee’s benefit coverages then it may be required to, in effect, self-insure for the value of the benefits.
Did you know that most insurers will continue many benefit coverages until the end of the minimum notice periods have expired under the Employment Standards Act? And there is at least one insurer who sells LTD coverage for terminated employees.
5. When can an employer terminate group medical coverage for an employee who is on LTD?
This is a very difficult question to answer and an employer must be mindfulof its obligations under the Human Rights Code. There is no arbitrary time that an employer can rely upon such as the time when the LTD insurer determine the employee is incapable of performing any job. Each case must be assessed on its own facts. An employer should obtain legal advice before terminating the employment of an employee who is receiving LTD benefits.
Thanks to Drew Hubbard of Hubbard Insurance at drew@hubbardinsurance.com or (905) 712-4668 for providing us with valuable background information in connection with this blog.
If you have questions about your organization’s legal exposure in connection with employee benefit plans, please contact us at inquiry@macleodlawfirm.ca or at 416 977-9894.
The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.
Recent Posts
Does Unpaid IDEL Trigger a Constructive Dismissal? Court Declines to Answer
In a recent case, Taylor v. Hanley Hospitality Inc., 2022 ONCA 376, both lawyers asked a three judge panel of the Ontario Court of Appeal (OCA) to decide whether a law which allows an employer to force an employee to take an unpaid leave under the ESA’s IDEL...
Is Secretly Recording A Workplace Conversation Just Cause for Termination?
More and more employees are secretly recording workplace conversations. Although it not is not a crime to secretly record a workplace conversation if you are a party to it, one judge recently concluded it is just cause for termination. This blog discusses this case....
Ontario Government Proposes More Employment Laws
In my last blog, I summarized some new employment laws that the Ontario government passed in December 2021. On February 28, 2022 the Ford government proposed more new employment legislation when it tabled Bill 88. This blog discusses three parts of Bill 88; that is,...