Here are some of the BIG myths I run into while I am working with different organization and their stakeholder such as, the participants and decision makers for Group Insurance plans. The goal of this article is to provide insight and some simple yet effective strategies.
I am covered by my spouse! This is a big one, I meet entrepreneurs, solopreneurs, and participants that repeat this to me over and over. If you are covered by your spouse, you are only covered for medical and dental coverage, that is it folks. This means that for all the “pooled benefits” such as life insurance and the all-important disability or income replacement insurance you are not covered.
It is too expensive. I believe everything is expensive in the absence of value. If you believe you are currently not paying for medical coverage simply because you do not receive a bill, you are mistaken. In general, if you are working you are paying roughly 660$ directly from your income taxes. The coverage for RAMQ varies both on the amount covered, however in general it averages to around 67%. All private health plans must cover at the very least equivalent coverages to RAMQ covers. Generally, I see 75%-90% with a small deductible. I personally prefer an amount per prescription, those whom consume or need more will pay more.
It is too expensive part 2. Above I elaborated on the biggest component of the group insurance premium, however there are other interesting benefits available. Let me break it down if you would purchase equivalent coverages yourself:
complementary health insurance plan they vary between 80-100$. Please note you must continue paying RAMQ with this type of plan in Quebec.
Life insurance costs on average around 40$/month.
Disability costs on average 60$/month.
Travel insurance around 225$/ year (multi-trip, medical only, 35-year-old person)
Total cost= $2 505/year+ $660 RAMQ. This is paid with after tax money in the case of an employee. Furthermore, in a group plan, many of these benefits are subsidized to a certain percentage by your employer.
It is too expensive part 3. Number 2 and number 3 are from a participant’s perspective, from an employer perspective, I hear the same concern. It is a valid concern and as business get difficult, it is often the first expensive to be placed on the “Chopping Block.” I discussed in my previous article “The Top 5 Reasons your Group Insurance Plan Doesn’t Work.” I recommend it 😉.
Do I really need this? This is a loaded question and must be broken down into to at least two components, you as your business and you as an individual.
I believe once your organization break free from being a “one-person” shop you should consider it, however, it may Not be necessary. As your organization continues to grow, it will become increasingly difficult to hire the top and most qualified people your money can buy. Let’s face it, people want this, and often they need it.
The business owner as the individual, I understand how cost plus can be very useful for a business owner and his family. Click here for a third party’s perspective.
None of these ideas should be implemented without the consideration for your needs as well as the needs of your organization. Discuss this with your team of professionals.