True Benefits Blog

FAQ: Get 100% of Your Claim Paid

If you are covered for health and dental benefits under more than one plan, your benefits will be co-ordinated based on guidelines developed by the Canadian Life & Health Insurance Association (CLHIA). This is called co-ordination of benefits (COB).

The total amount of reimbursement you receive cannot exceed 100% of the eligible expense incurred.

1. You and your spouse must first submit your claims through your own employer group plan.

2. If you are submitting the balance of ineligible expenses to another plan, you must include the original explanation of benefit (itemization of expenses) that you receive from the first submission.

3. Claims for dependent children must be submitted to the plan of the parent who has the earlier birthday in the calendar year (the year of birth is not considered), either when the parents are cohabiting or when there is a shared custody arrangement in the event of separation or divorce.

4. In the case both parents have the same birthdate, the primary carrier is the plan of the parent whose first initial comes first in the alphabet.

5. If you are separated or divorced, and have full custody of any dependent children, the plan that will pay benefits for your children will be determined in the following order:
• The plan of the parent with custody of the child.
• The plan of the spouse of the parent with custody of the child.
• The plan of the parent without custody of the child.
• The plan of the spouse of the parent without custody of the child.

6. Any remaining balances can be submitted to a Health Care Spending Account, if available.

Please feel free to contact us with questions at info@truebenefits.ca or 604.872.2866.

Rachel von Sturmer, BA, GBA, CFP

www.truebenefits.ca

FAQ: Beneficiary Designations

When I'm filling out the group enrollment form, the beneficiary section asks whether I want to make my selection revocable or irrevocable, and also whether I want to appoint a trustee. What does this mean?

This is a great question; naming a beneficiary to your life insurance benefits is very important. If you leave this area blank, the beneficiary will by default be your estate, and subject to probate taxes. By naming a beneficiary, the death benefit will be paid directly on a tax-free basis.

Irrevocable status means that the named beneficiary cannot be changed without the current beneficiary's consent. I do not recommend that this be selected for group life insurance. Revocable gives you the right to adjust the beneficiary if desired in the future.

A trustee is appointed when one of the named beneficiaries is a minor. The trustee appointment will be in place until that minor comes of age. When selecting a trustee, choose a godparent or other close friend or family member that you can depend on to take care of your beneficiaries' best interests.

Here is an article that does a great job of summarizing beneficiary designations for financial products.

Rachel von Sturmer, BA, GBA, CFP

www.truebenefits.ca

FAQ: Flu Vaccines, Are They Covered?

I've had several questions from clients recently in regards to whether flu shots are paid for by BC MSP.

Examples of people eligible to get a free flu vaccination include:

• Children 6-23 months of age
• Pregnant women who will be in their third trimester during the influenza season
• Seniors 65 years and older
• Residents of any age living in residential care, assisted living or other group facilities
• Children and teenagers taking AspirinÒ or ASA for long periods of time
• Children and adults with certain medical conditions
• Doctors, nurses and other care providers who work in hospitals, residential care, assisted living or other group facilities
• Household contacts, caregivers and daycare staff of children under 24 months of age
• Household contacts of people at high risk
• People who live or work in confined settings such as correctional facilities.
• Those who provide care or service to people at high risk in potential outbreak settings such as cruise ships
• People who provide essential community services, such as police officers, firefighters and ambulance attendants
• Farmers and other people who work with live chickens or pigs

More information from BC Health about the flu vaccine can be found here.

For those who do not fall into any of these categories, many group benefit plans will cover the cost of the vaccine. Check your employee benefit booklet or contact your extended health insurer to confirm your coverage. Larger employers may also sponsor flu clinics free of charge or cost-subsidized to employees.

For more information about the flu and flu shots, click here.

Rachel von Sturmer, BA, GBA, CFP

www.truebenefits.ca

FAQ: Leaving Employer Benefit Plan

I am leaving my current job in sales to start my own business, and I'll be losing a great benefits package. I have two young children and want to make sure that dentist bills will be covered. What can I do to replace my group benefits? 

Firstly, look into the Conversion Privileges written into your group benefits plan. Most plans include a provision to convert group life insurance into an individually owned policy, and some will also allow conversion of spousal life insurance and employee long term disability insurance. This can generally be done without medical evidence within 30 days of leaving your employer.

Many insurance carriers now provide individual health and dental insurance plans that offer uninterrupted coverage for you and your dependents. If you apply within 60 days of leaving your group plan, you can qualify without having to provide any medical information.

There is great value in the above options to persons who may not otherwise have qualified for insurance due to existing medical conditions.

Self-employed persons or business owners also have the option of a Private Health Services Plan (PHSP), which is a health trust that allows personal medical and dental expenses to be claimed as business expenses. This is a cost-effective option that should definitely be explored.

For more information, please feel free to contact me at 604.872.2866 or via email at rachel@truebenefits.ca.

Rachel

www.truebenefits.ca

FAQ: How Are Benefits Brokers Paid?

Dear Rachel:

I'm looking for an advisor to help my business start a benefits plan. Can you tell me how benefit brokers get paid? What type of services should I be expecting?

Many clients are curious as to how their benefits broker is being compensated. There are two models: fee-based and commission-based. The majority of advisors are commission-based, in which they're paid a small percentage of premiums by the insurer; this charge is built into a client's cost. Fee-based advisors are usually consulting firms that deal with larger client accounts, and charge an hourly fee for their services.

Another common question I get is about what services you can expect from your advisor. The base level of service you should receive includes:

-Marketing your plan to a variety of carriers and comparing the quotes for you
-Assisting with setting up the plan and online administration
-Negotiating the plan's renewal rates on your behalf each year, and presenting a report 30 days before the renewal date

Some "above and beyond" services to look for are:

-Training your plan administrator
-Offering assistance with any difficulties that may arise during the year
-Being in touch to let you know how the plan is running
-Setting up employee satisfaction surveys
-Benchmarking your plan against competitors'
-Providing customized benefits promotion materials
-Employee seminars and learning sessions

I would recommend finding an advisor who specializes in benefits, as opposed to a financial services generalist. Ask for client referrals, and find out whether the advisor is affiliated with a particular supplier or is an independent broker.

For more information, please feel free to contact me at 604.872.2866.

Rachel

www.truebenefits.ca

How Much Do Benefits Cost?

Dear Rachel: I run a successful business with twenty employees and would like to start offering benefits, but want to get an idea of the cost first. I've looked online but can't find anything. Could you please give me some insight on what I'm getting myself into?

The answer is: it depends... but that's not very helpful! So, I've compiled a list of benefits, design options, and ballpark costs to get you started.

Demographics:

Age - Is your average employee age 35? Great news! Your Life Insurance and Long Term Disability premiums will reflect this. Conversely, if your employees are all in their 60's it can really affect costs.

Gender - Did you know that statistically, women are more likely than men to make a Long Term Disability claim? This can be reflected in your disability premiums when your employee base trends towards one gender or the other.

Volume - Single or family? Depending on whether your employees have dependents, rates for Health, Dental and Vision can vary. Expect to pay approximately double the Single rate for Family coverage.

Life and Dependent Life Insurance, Accidental Death & Dismemberment (AD&D), Short and Long Term Disability and Critical Illness coverage amounts all vary depending on plan design. They can be indexed to earnings or offered as a flat amount; your premium cost is based on the total volume of coverage.

Sample monthly rates:

• Life Insurance can range from $0.10 to $1.00 per $1,000 of coverage; Dependent Life Insurance can range from $1.00 to $4.00 per employee with dependents
• AD&D from $0.03 to $0.25 per $1,000
• Short and Long Term Disability can range vastly depending on the plan design; expect to pay between $0.20 and $1.00 per $10 of weekly earnings for Short Term, and between $0.20 and $3.00 per $100 of monthly earnings for Long Term Disability
• Critical Illness can range from $0.10 to $4.00 per $1,000 of coverage

Industry - Are your employees working in a professional office at a desk? Or are they involved in manual tasks such as lifting inventory and using heavy machinery? Depending on what industry your business is in, your employees are more likely to make certain types of claims.

Turnover - If you've had a benefits plan for a while, have you marketed your plan more than every three years? Does your employee base have a lot of "churn"? This can add up to extra risk for the insurer that you may not be a loyal customer, or that there will be additional administration required. Insurance carriers love stable employee bases because it helps them to predict claiming patterns more accurately when setting rates.

Benefits:

Extended Health Coverage (EHC): What's driving the cost of EHC is prescription drug coverage; drugs tend to comprise the majority of claims your employees will make. Typical coverage is 80% coinsurance (or 20% out of pocket to the employee), and a marquee plan will offer 100%.

Other "rate affecters": Paramedical practitioner coverage for services such as physio, chiro, and massage. Typical coverage ranges from $200 to $500 per practitioner per year. Hospital room upgrades can include a semi-private or private room.

What You'll Pay: Rates for Health coverage generally range from $30 Single to $150 per employee with dependents per month.

Dental: Dental plans are usually divided into three increasing levels of coverage, Basic, Major and Orthodontic. Basic covers regular cleanings and check-ups. The best plans cover recall exams every six months, but this can range to 12 months. Major coverage is for more in depth work such as crowns and bridges. Orthodontics can be limited to dependent children only or be inclusive of adults.

Other "rate affecters": Each of these coverage levels comes with its own coinsurance level and possible deductibles. Cream of the crop plans offer 100% Basic, 80% Major and 50% Orthodontics, but for some small businesses offering only 80% Basic can be a welcome perk. Coverage maximums also affect the rate; offerings range from $500 to $3,000 for each of Basic and Major or a combination of the two. Ortho usually comes with a lifetime maximum of $1,000 but this can range from $500 to $5,000.

What You'll Pay: Rates for Dental coverage generally range from $30 Single to $150 per employee with Dependents per month.

Again, it needs to be said that these are ballpark figures and your rates will be specific to your plan and the employees it will cover. If you want to get started with a quote, please email quotes@truebenefits.ca and we can discuss your specific needs. Is there something I haven't covered here, please feel free to leave a comment.

Rachel

www.truebenefits.ca