The Canadian employment landscape is changing. Most people no longer work for large corporations or the government. More Canadians either work on contract or are in business for themselves. They must decide what type of health and dental coverage is best. Let’s have a look at advantages and disadvantages of both individual coverage and group plans!
Individual coverage is all that is available to one-person operations. Such insurance does have some advantages. The insured has some individual flexibility in the type of coverage sought. Coverage ranges from basic protection to more enhanced plans with higher drug maximums over $5000 a year. On the downside, premiums and renewals are based on an insurer’s experience with the pool of individual clients, so the rates cannot be negotiated. As well, most individual plans must be fully underwritten and include exclusions for pre-existing conditions, such as high blood pressure.
Group Plans pool the rates for all employees of a particular company into a single plan. These plans are available for groups as small as two people. Group plans offer the following advantages:
No exclusions for pre-existing conditions
One family rate is charged. Individual coverage penalizes large families, as each family member is charged a premium. Someone with five children pays a premium for each child. Under a group plan there is one family rate, no matter the number of family members.
Group critical illness is often available without a medical for larger groups.
Higher limits on drug and dental claims. Individual plans often limit the amount of dental coverage in the first year.
Group premiums are tax deductible for a corporation. Individual plan premiums, however, are not deductible according to federal tax guidelines.
More selection. Few insurance companies offer individual coverage, while significantly more offer group plans. More competition generally means more competitive rates.
Group renewal rates are negotiable, while individual renewals are pooled and non-negotiable. Your ability to negotiate an unjustified rate increase generally means lower overall premiums.
