Types of coverage

Extended health insurance

Even in Canada, where Government plans provide approximately 70% of all healthcare expenses, the remaining gap is still a major concern for employees and employers. Private healthcare plans are restricted by legislation to costs not fully covered by government programs.

Organizational health expense plans are generally permitted in the following areas across Canada:

  • Prescription drugs, medication, and vaccines and other supplies available only by a prescription from a registered healthcare professional
  • Major health: private duty nurse, ambulance services, hospital room, cardiac rehabilitation, etc.
  • Charges for special medical appliances such as crutches, artificial limbs, or wheelchairs.
  • Paramedical services, such as psychologists, massage therapists, speech therapists, podiatrists, physiotherapists, chiropractors, osteopaths, or naturopaths (combined or individual maximums)
  • Vision care expenses including frames and lenses, contact lenses, fitting and remedial treatment, laser eye correction surgery
  • Travel: health coverage for the employee and their dependents when traveling for a duration of 30, 60, or 90 days

Most benefit carriers will tailor a plan to include only those features and coverages desired by the employer, however, some coverage options can be restricted or sold in combination with other coverages to contain overall plan costs or to subsidize heavily utilized services.


Most employees agree that dental insurance is a key benefit that they want to see in their employer benefit plan. Some common elements in dental plans include:

  • Basic preventative dental care and repair up to 100% to a maximum dollar amount
  • Recall every six (6) or nine (9) months
  • Deductibles or cost-sharing for non-basic categories including major restorative and orthodontics

Life Insurance

Most employers design their plans to include financial protection for the employee’s beneficiaries in the event the employee dies. A common provision is providing two times the employee’s salary in the event of death. Life Insurance benefits should provide additional coverage options (“optional life”) at a cost to the employee, along with dependent life insurance options allowing the employee to choose to purchase it.

Accidental Death or Dismemberment

Accidental Death or Dismemberment (AD&D) pays benefits if an employee’s death is the result of an accident, or if an employee suffers the loss of use of any of their limbs or body parts. AD&D coverage typically replicate the provisions outlined in the employer’s life insurance benefit program.

Short-Term Disability

Some employers offer short-term disability (STD) for employees that are temporarily unable to work due to illness or injury unrelated to the job. These plans typically offer income replacement anywhere from 60% to 75% of an employee’s salary to a maximum amount of twelve (12) weeks.

Employers that do not offer an STD program should direct their employees to EI Sickness Benefits for partial income replacement during times of temporary illness or injury.

Long-Term Disability

Long-term disability (LTD) is another income-replacement provision. This provision cannot be obtained through a spousal plan, it's only for the member who is an employee of the organization. Employees are asked to pay the total cost of the premiums through payroll deductions to receive a tax-free payment should they be unable to work. Long-term disability coverage is applied for when an employee cannot complete a certain percentage of the essential duties of their role due to illness on an ongoing basis.

LTD payments typically start three (3) months or more after STD or EI sickness benefits have commenced and pay between 60%-75% of an employee’s salary. Policies may provide for up to 24 or 36 months of income replacement coverage or last until the employee turns sixty-five (65).

The structure of each plan can differ slightly, so understanding what you are trying to achieve with this program, including elimination periods and termination options, is critical at the outset.

Health Spending Account

Some employers offer a Health Spending Account (HSA), also known as a Health Care Spending Account (HCSA) to employees and their dependents. These are individual accounts with an annual fixed dollar amount that employees can use for reimbursement of health and dental-related claims not included in the employer sponsored group benefit plan.

Expenses that can be claimed through an HSA are approved by the CRA and are the same as the medical expenses that employee’s can claim on their annual tax return.

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