Beyond federal mandatory benefits, job seekers nowadays consider additional employee benefits packages as important as salary when evaluating job offers. Yet many small businesses struggle to compete with the quality plans offered by reliable corporations.
Tailored employee benefits packages cut through the complexity. This solution can help small business owners attract and retain top talent while promoting productivity. By understanding the available options and implementing cost controls, you can build a perfect benefits plan that avoids costly mistakes.
Key Benefits for Small Business Employee Packages
Not all businesses need the same benefits. Your options should align with your industry standards, budget, and workforce. However, the 4 most standard employee benefits packages for small businesses to consider are group health, group retirement plans, group disability, group life and critical illness.
Detailed explanation below will help you to choose the best plan for your situation:
Group Health Insurance
While provincial and territorial health care plans provide essential services, group health plans often leave Canadians with significant out-of-pocket medical expenses. There is also extended health coverage that covers prescription drugs, paramedical services (physiotherapy, chiropractic, massage therapy), vision care, and dental services.
Prescription Drug Coverage
Prescription drug plans are the most used health benefit, which can reduce costs for necessary medications. Insurers use 4 strategies to optimize and control costs:
- Regular reviews to add cost-effective new drugs
- Access to generic drug options
- Dispensing fee controls and negotiations
- Healthcare management for complex conditions
Paramedical Coverage
The second-most-used benefit is paramedical services. They provide preventative care and treatment for health conditions. This plan provides annual dollar limits per coverage type that members can use towards paramedical visits.
Their 8 services include:
- Physiotherapy
- Massage therapy
- Chiropractic
- Naturopathy
- Osteopathy
- Dietetics
- Podiatry
- Psychology services
Access to these services enhances overall wellness and reduces the burden on the healthcare system.
Vision Care Benefits
Vision care coverage provides financial assistance with routine eye exams, eyeglasses and contact lenses, and laser eye surgery. They ensure employees can access both exams and corrective products.
Dental Plans
Dental benefits cover preventative, routine, primary restorative and orthodontic dental treatment. Typical plan coverage includes:
- Essential Services: Oral exams, cleanings, fillings, X-rays
- Primary Services: Crowns, dentures, bridges
- Orthodontics: Braces, retainers
By funding primary preventative dental care, employers reduce absenteeism and enhance workforce health.
For those who do not have any dental insurance, you can apply for the Canadian Dental Care Plan with no cost.
Group Retirement Plans
RRSP-matching programs are popular for small business retirement benefits. In these programs, you match your employees’ RRSP contributions up to a certain percentage of their salary. It can encourage loyalty and offer tax benefits.
Group Disability Plans
Illness and injury can occasionally render employees unable to work. Yet, disability insurance for small-business employees helps against these disruptions. There are 2 compatible benefits on this plan:
- Short-Term Disability: Covers absences up to 3 – 6 months
- Long-Term Disability: Covers more extended absences beyond short-term periods
In addition to income replacement benefits, quality disability carriers provide resources to support employee recovery and return to work. In other words, this prevents and reduces the impact of disability benefits on both employees and small businesses.
Group Life & Critical Illness Insurance
Life insurance provides a lump-sum payment to beneficiaries upon the policyholder’s death. This financial protection eases the burden during a difficult time.
Similarly, critical illness insurance pays out a lump-sum amount after diagnosis of a covered serious illness, such as cancer, heart attack, or stroke.
This funding can help pay bills and cover treatment costs. Employees have peace of mind knowing their families are protected from the financial impacts of unexpected life events.
Additional Specialty Benefits to Strengthen Coverage
In addition to core employee benefits packages for small businesses, a variety of supplemental “specialty” benefits can enhance wellness coverage.
Travel Insurance
Business travel insurance safeguards employees away from home:
- Emergency Medical Coverage: Up to $5 million per person for unexpected illness or injury.
- Travel Assistance: Helps locate medical facilities, provides emergency transportation and more.
Especially after pandemic travel restrictions, employees value coverage that protects them during work-related trips.
Health Spending Accounts
Health spending accounts (HSAs) reimburse employees for health and dental expenses not covered under other benefits. They provide tax-effective flexibility using:
- Credits/debit cards to direct bill-eligible expenses
- Online portals for easy access and tracking
- Rollover of unused credits
HSAs allow small businesses to control costs by setting annual limits while providing customized supplemental coverage.
Top Providers for Small Businesses Employee Benefits in Canada
Choosing the right benefits provider is important for small businesses that want to offer competitive packages while keeping costs down. Below are 5 well-known providers that may meet your needs.
Canada Life
Canada Life provides services to over 27,000 small business employers across Canada. They focus on overall well-being, including financial, physical, and mental health, through integrated solutions.
For companies with up to 75 employees, their Freedom at Work – Small Business Solutions offers benefits that cost “as little as 1-5% of payroll”. This plan includes:
- Health Benefits: Coverage for prescription drugs, dental and vision care, disability protection, and paramedical services, including massages and physiotherapy.
- Virtual Health Services: Canada Life integrates digital health options to meet the needs of the modern workforce.
- Savings Plans: There are also retirement savings options, including RRSPs, TFSAs, and DPSPs. These options can help employees secure their financial future.
For businesses with 2 employees or self-employed individuals, there is also coverage for prescription drugs, dental and vision care, paramedical services, travel insurance, and virtual health.
For international companies with employees in Canada, Canada Life offers a simple way to manage cross-border benefits for Canadian workers.
Source: Freedom at Work – Small Business Solutions – Canada Life
Sun Life
Sun Life is considered a market leader, with coverage for over 5 million employees and their dependents across Canada, and processes more than 80 million claims annually.
Its SunAdvantage benefits solutions are designed for businesses with 3 to 49 employees and include standard coverage for Life, Dependent Life, and Accidental Death and Dismemberment (AD&D) insurance.
- Life Insurance: Coverage ranges from $20,000 to $1,000,000 and varies by group size. The program includes a premium waiver in the event of total disability, as well as various conversion options.
- Dependent Life Insurance: This provides coverage for spouses in units of $5,000 up to $20,000, with child coverage at half the spouse’s amount.
- Short-Term Disability (STD): Its waiting periods are 0 to 14 days for accidents and 3, 7, or 14 days for sickness. Benefits last from 13 to 26 weeks, covering 50% to 80% of income, with weekly payments up to $1,750.
- Long-Term Disability (LTD): Optional with elimination periods of 90 to 180 days. Benefits last until age 65 or for up to 10 years, covering 50% to 80% of income, with maximum monthly payments up to $15,000.
- Extended Health Care (EHC): Includes extensive drug coverage, hospital room options, and out-of-province emergency coverage up to $3,000,000.
- Dental Care: Optional with various coverage levels and deductibles. Basic coverage includes up to 100% co-insurance, with lifetime maximums for orthodontics and other procedures.
Sun Life also offers individual wealth and insurance products designed to support employees’ goals of achieving long-term financial security and health beyond the group benefits plan.
Source: Group Benefits solutions for small businesses with 3 to 49 employees – SunLife
Manulife
Manulife offers customizable group benefits plans for businesses with 2 to 50 employees at a competitive price. Their benefits are based on three main pillars: flexible customization, competitive plans, and long-term support.
Its coverage options include:
- Dental Plan Customization: Employers can select coverage for basic and premium dental services based on their budget.
- Extended Health Care Services: Coverage includes vision care, chiropractic services, massage therapy, and other professional health services.
- Flexible Plan Structures: HSAs provide employees with the flexibility to select benefits that suit their needs, and personal insurance options enable them to purchase additional coverage for themselves and their families.
- À La Carte Benefits: Employers can select specific benefits, such as Life Insurance or Critical Illness Insurance, without purchasing a comprehensive package.
For companies with more than 50 plan members, Manulife offers even more extensive customization options designed to maximize benefits while containing costs.
Source: Customize your group benefits plan – Manulife
Blue Cross
Blue Cross operates differently in Canada, with regional offices located in each province. The company has conducted its own survey to gain insights into the benefits landscape for small businesses. This lets them tailor benefits to fit local health plans and understand the specific healthcare needs and laws in each area.
Here are its benefits that address diverse employee needs across regions:
- Prescriptions: Benefit from needed medications without paying full price, addressing one of the employees’ most frequent healthcare needs.
- Dental: Coverage for routine visits, examinations, cleaning, polishing, and more extensive dental work, depending on plan level.
- Vision: Covers costs of eye examinations, eyeglasses, and contact lenses.
- Wellness: Access to resources, health assessments, and risk management tools supporting proactive health management.
- Employee Assistance: Voluntary, confidential clinical counselling and lifestyle information supporting mental health and work-life balance.
- Hospital: Coverage for ambulance service and post-hospital care, filling gaps in provincial health coverage.
- HSAs: Flexible options to submit incremental expenses not covered by standard benefits.
- Massage: Treatment by registered specialists and professional therapists, increasingly recognized for stress management and pain relief.
- Disability: Ensures teams are prepared if unexpected illness or injury prevents work.
- Virtual Care: Talk to doctors online, receive personalized care plans, and access health services remotely.
- Critical Illness: Coverage helps team members cope financially through an unexpected serious illness diagnosis.
- Group Life: Provides peace of mind through sound financial planning in advance of death.
Employers should check regional websites for local offerings and contact info. This helps ensure benefits match provincial health plans and regulations while providing better customer service.
Source: Group Benefits – Blue Cross
GreenShield
GreenShield stands out by offering a completely digital benefits experience for small businesses with 2 to 149 employees. With over 65 years of experience in insurance and health services, they combine traditional benefits with modern technology.
Here’s what’s included in their small business products:
- Virtual Care: Telemedicine is a standout feature with 24/7 access. It includes comprehensive virtual healthcare, mental health, and chronic care support.
- Medical Coverage: Their extended health benefit includes prescription drugs, paramedical services, vision care, and hospital coverage.
- Dental Coverage: Customizable plans with different coverage levels, deductibles, and annual limits, covering preventive care, basic and major restorative services, and orthodontics.
- Life insurance: Basic coverage for financial security for employees’ families in case of death.
- Disability insurance: Provides income replacement if an employee is unable to work.
- Critical illness coverage: Optional coverage that pays a lump sum if diagnosed with severe conditions like cancer or a heart attack.
- Health Care Spending Account (HCSA): It’s perfect for businesses just starting with benefits. Employers can set a budget per employee, and employees spend it on what they need.
- Wellness Spending Account: Budgets for gym memberships, fitness equipment, wellness programs, and approved expenses.
All those services are integrated to reduce paperwork and enable automatic reimbursements, making it easier for members to manage their health and wellness in one place.
Besides these top providers, there are also other options, such as the Chambers Plan, Benefits by Design, Olympia Benefits, and The Benefits Trust, which offer plans specifically designed for small businesses.
Source: Coverage + care built around you – GreenShield+
How to Choose the Best Benefits Provider for Your Small Business
Each business has unique needs based on its size, budget, industry, employee count, and growth plans. So, knowing your specific needs and finding providers that help you get the best value while keeping costs in check is important.
Below are the top providers that excel in each distinctive area:
| Coverage Priority | Top Providers | What This Coverage Includes |
| Mental Health & Wellness | Sun Life | Comprehensive Lumino Health Virtual Care ecosystem, including EAP, Stress Management and Well-Being programs, and iCBT (internet-based cognitive behavioural therapy) |
| GreenShield+ | Integrated mental health services with therapist matching, on-demand CBT programs, and seamless benefits integration | |
| Manulife | Research-driven approach to financial wellness and its impact on physical and mental health | |
| Dental & Vision Coverage | Sun Life | Extensive dental customization (recall frequencies from 5-12 months, multiple co-insurance options, orthodontics for children and adults) |
| The Benefits Trust | HCSA covers dental, including orthodontics and implants, at 100% up to set limits | |
| Canada Life | Dental coverage ranging from basic treatments to major operations and orthodontics | |
| Prescription Drug Management | Manulife | Comprehensive drug sustainability strategy: My Drug Plan, Manulife DrugWatch, Specialty Drug Care, mandatory generic substitution |
| Sun Life | Pay-direct drug card with mandatory generic substitution, prior authorization, dispensing fee caps, and optional pharmacogenomics testing | |
| BBD | Catastrophic drug coverage with stop-loss thresholds and preferred pharmacy partnerships (Costco, PocketPills) | |
Disability & Income Protection | Sun Life | Detailed STD/LTD options with multiple waiting periods, benefit formulas, and comprehensive rehabilitation support |
| Canada Life | Holistic approach spanning prevention, recovery, and return-to-work across STD and LTD | |
| Manulife | Emphasis on disability prevention and management with an integrated wellness approach | |
Critical Illness & Life Insurance | Sun Life | Two-tier critical illness: (Plan A covering 3 conditions, Plan B covering 25 conditions) with detailed participation requirements and maximums |
| Canada Life | Freedom to choose optional insurance, allowing employees to supplement with portable coverage | |
| Manulife | Group critical illness insurance with à la carte benefit selection | |
Progressive & Inclusive Benefits | Sun Life | Industry-leading gender affirmation coverage (core and enhanced tiers), medical cannabis coverage, and pharmacogenomics testing |
| GreenShield+ | An inclusive approach through an integrated care platform addressing diverse health needs | |
| Manulife | Benefits without Borders accommodating diverse, internationally mobile workforces |
Research from BlueCross shows that 49% of employees value health benefits more than salary increases. Therefore, select group benefits providers and packages that align with your business needs and employee demographics to maximize the ROI.
Why Small Businesses Should Offer an Employee Benefits Plan
Employee benefits packages for small businesses function as compensation components, often more tax-efficient than equivalent salary increases. Implementing strategic choices can recruit exceptional staff, enhance workforce quality, and deliver the best return on investment. Here are the detailed advantages of having this plan:
Attract and Retain Top Talent
A key strategy for recruitment and retention is providing a competitive benefits package. It shows employees that the company cares about their well-being.
As a result, with the current labour shortage and competition for skilled talent, a quality benefits plan can give small businesses an advantage in attracting top candidates.
Improve Employee Health, Happiness, and Performance
Providing health insurance and other wellness benefits demonstrates an investment in employees’ physical and mental health. That said, employees are less distracted by the worry of uncovered medical costs.
Tax Advantages and Savings
A key incentive for benefits packages for small businesses is the tax deductibility of premiums. Benefit plans also provide cost-reduction opportunities:
- Premium Deductibility: Premiums paid for employee health and dental benefits are considered an eligible business expense for tax purposes. This provides a tax deduction for benefit costs.
- Payroll Savings: Contributions to group retirement and savings plans can sometimes reduce Canada Pension Plan (CPP) contributions, decreasing payroll costs.
- Premium Cost Savings: Insurers offer lower premiums for group and individual plans. Small businesses can benefit from these group savings.
- Custom Cost Controls: Small businesses can implement cost controls like plan limits and employee contributions to manage benefit expenses.
Benefit plans make financial sense by providing tax and potential payroll advantages along with options to control costs.
How to Customize Employee Benefits for Your Small Business
Then now, the question should be asked is that, how to customize employee benefits packages?
Benefits packages are highly customizable based on company priorities and budget considerations. Ways benefits packages for small businesses can be tailored as plans include:
Setting Limits and Cost Controls
Managing benefit costs for small businesses is not a big deal at all. Small companies can use these 6 strategies to implement cost controls to create affordable benefits plans:
- Coverage maximums on health and dental benefits
- Deductibles require employee payment before coverage
- Co-insurance payments to share costs
- Tiered health and drug formularies
- Health spending accounts with annual limits
- Employee contributions toward premiums
These measures allow benefits packages for small businesses to be planned with high quality benefits while optimizing value and controlling expenses based on their budget and risk tolerance.
Options by Employee Class
Rather than a one-size-fits-all approach, benefits packages for small businesses can be offered with customized options by 4 employee classes:
- Executives: Enhanced coverage with low deductibles
- Full-time: Comprehensive core health/dental benefits
- Part-time: Basic plans with higher deductibles
- Seasonal: Optional limited benefits like telemedicine
Tiering plans help attract talent at all levels while aligning coverage and costs. HR can analyze company demographics and roles to develop tailored solutions.
Voluntary Portable Benefits
Voluntary or optional benefits packages let employees purchase supplemental coverage at their own cost. These portable plants have 4 advantages:
- Increased satisfaction: Employees can customize to their needs
- Broader offerings: Include supplemental life, disability and critical illness
- Seamless administration: Easy payroll deductions facilitate enrollment
- Portability: Employees can take coverage with them if they leave
Rather than subsidizing total premiums for specific offerings, voluntary options provide affordable flexibility. Employees appreciate the ability to buy customized protection.
The bottom line
By understanding what employees need, setting a budget, researching providers, comparing quotes, and communicating effectively, small businesses can offer valuable benefits at a lower cost. Focus on flexible options, such as HSAs, to manage expenses while still offering great value. This investment leads to lower employee turnover, improved productivity, increased morale, and potential tax benefits for all parties involved. Instead of asking if you can afford benefits, consider if you can afford not to in today’s job market. Use this guide to find the right provider for your business and start discussions with your team about their coverage needs.
