Employee Benefits Explained

Disability Coverage

Short-Term Disability (STD)

When an employee is off work due to illness or injury, short-term disability helps replace some of their income — so they can focus on getting better, not just getting by.

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The benefit is usually a percentage of their regular weekly pay and kicks in during shorter absences. Common coverage periods are 15, 17, or 26 weeks, often lining up with Employment Insurance or leading into Long-Term Disability coverage.

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One important note: the tax treatment depends on who’s paying the premiums. If the employee pays, the benefit is tax-free. If the employer pays, it’s taxable — unless the value of those premiums is added to the employee’s income.

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We help you choose the right setup based on your team, your budget, and what makes the most tax sense.

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Long-Term Disability (LTD)

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When someone faces a serious illness or injury that keeps them off work for months — or even years — the financial impact can be massive. That’s where long-term disability coverage steps in.

While it might not be as visible as dental or massage benefits, LTD is one of the most critical protections you can offer. It replaces a portion of an employee’s income if they’re unable to work for an extended period.

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Typically, there’s a waiting period (called an elimination period) before benefits begin — most commonly 17 weeks, which lines up with the end of Employment Insurance (EI) sickness benefits.

Just like with short-term disability, tax matters here too:

• If the employee pays the premiums, the benefits are tax-free.

• If the employer pays, benefits will be taxed unless the premium value is added to the employee’s income.

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We’ll help you set it up right — so employees are protected when it matters most, and you’re not caught off guard come claim time.

Extended Healthcare Coverage

Extended Health Care (The Stuff That Really Gets Used)

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Extended health care benefits — sometimes called major medical — help fill in the gaps where provincial healthcare leaves off. They cover the kinds of services and expenses that most people actually use, from prescriptions to physio.

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Coverage typically includes:

• Hospital care upgrades

• Prescription drugs

• Medical equipment and supplies

• Paramedical services (like physio and massage)

• Out-of-province emergency medical care

• Other everyday healthcare needs

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Drug Coverage

Prescription drugs are usually the biggest driver of health plan costs. They often make up 60–80% of claims, so how you design your drug coverage matters a lot.

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There are a few different ways to set up your plan:

1. Prescription-only: Covers drugs that legally require a prescription.

2. Prescribed drugs: Covers everything a doctor prescribes — even if it's over-the-counter.

3. Hybrid plans: The middle ground. Covers prescription drugs and some non-prescription items on a pre-approved list (called a formulary).

When it comes to payment, there are two approaches:

• Reimbursement: Employees pay upfront and get reimbursed after submitting the claim.

• Pay-direct: The employee uses a drug card at the pharmacy, and the insurer pays the pharmacy directly.

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We’ll help you pick the right setup based on your team’s needs and your budget.

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Paramedical Services

Think of this as the “feel better faster” section of your plan. It includes coverage for services like:

• Chiropractors

• Physiotherapists

• Massage therapists

• Psychologists

• Naturopaths

• Acupuncturists

• And more

Coverage usually comes with annual limits (often around $500 per practitioner per year) and is based on standard pricing in your province. Some services may need a doctor’s referral to be eligible.

Dental Care

Dental care benefits help cover the cost of keeping your employees — and their families smiling. From regular cleanings to major dental work, the plan can be built to cover what matters most.

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Most dental plans are divided into three main categories:

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Basic Services

This is your regular checkup stuff — exams, x-rays, cleanings, fluoride treatments, fillings, and routine scaling. These are the things that keep teeth healthy and catch problems early.

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Major Restorative

This is for the heavier-duty work — like crowns, bridges, dentures, inlays, and onlays. In other words, when a simple filling just won’t cut it.

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Orthodontics

This includes things like braces, retainers, space maintainers, and other devices to help straighten teeth or fix alignment issues — especially useful for families with growing kids (or adults finally getting around to it).

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Plans can be customized with different levels of coverage, including:

• Co-insurance (e.g., 80% coverage, employee pays 20%)

• Deductibles (small upfront costs before coverage kicks in)

• Annual or lifetime maximums (caps on how much can be claimed)

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We’ll help you find the right mix — generous enough to be appreciated, sustainable enough to be smart.

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Periodontic Services (Focus: gums and supporting structures of the teeth)

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These services treat gum disease and other issues affecting the tissues around the teeth.

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Common periodontic procedures:

• Scaling and root planing (deep cleaning below the gum line)

• Periodontal maintenance cleanings

• Gingivectomy (removal of diseased gum tissue)

• Flap surgery (to access the roots for cleaning)

• Bone grafts (to support jawbone structure)

• Tissue grafts (to cover exposed roots or build up gum tissue)

• Crown lengthening

• Periodontal splinting (to stabilize loose teeth)

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Endodontic Services (Focus: tooth pulp and root canals)

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These services treat infections or injuries in the soft tissue inside the tooth.

Common endodontic procedures:

• Root canal therapy (anterior, premolar, molar)

• Root canal retreatment (redoing a failed root canal)

• Pulpotomy (removal of part of the pulp in children’s teeth)

• Pulpectomy (complete pulp removal before a root canal)

• Apicoectomy (surgical removal of the root tip)

• Treatment of dental abscesses

• Emergency endodontic treatment for pain or swelling

Health Care Spending Accounts (HCSA)

More flexibility. Less stress.

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A Health Care Spending Account (HCSA) — sometimes just called an HSA — is like a mini health wallet for employees. It lets them get reimbursed for health and dental expenses that aren’t fully covered by the regular plan or provincial healthcare.

It can be offered as a stand-alone benefit or layered on top of your existing plan to give employees more control and choice in how they use their benefits.

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Why Employers Like It

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It’s a smart way to give employees flexibility while keeping costs predictable. You set the budget, and they choose how to spend it — no surprises at renewal time.

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Everyone in a defined group (or class) gets the same dollar amount, and the funds are 100% employer-paid. It’s simple, fair, and gives people the freedom to use their benefits where they need them most — whether that’s extra massage therapy, new glasses, or dental work.

Cost Plus

A smart way to cover the “extras” — without triggering a tax bill.

Cost Plus is a flexible option that lets employers reimburse employees for health or dental expenses that aren’t covered under the regular benefits plan — without the reimbursement being treated as taxable income.

It’s often used for high-cost claims that exceed plan limits, or for expenses that aren’t part of the insured program but are still eligible under the Income Tax Act.

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How It Works

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Let’s say an employee has a $5,000 vision claim, but your plan only covers $500. You want to help them out — but if you hand them the money directly, it becomes taxable income.

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Enter Cost Plus. Here's what it looks like:

• Employee pays the full $5,000 upfront

• Employer sends $5,000 + admin fee + tax to the insurer

• Insurer reimburses the full amount to the employee — tax-free

Example:

• Claim: $5,000

• Admin fee (e.g., 5%): $250

• Tax (e.g., ON PST): $340

• Total cost to employer: $5,590

• Taxable impact to employee: $0

That $590 in overhead saves the employee from paying tax on the entire $5,000 — which could be well worth it depending on their income bracket.

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What You Need to Know

• Claims must qualify as eligible medical or dental expenses under the Income Tax Act

• Most insurers charge an admin fee of 10–15%, which often includes premium taxes

• Cost Plus is billed per claim and only used when needed — so it’s not a standing cost

It’s a great tool for employers who want to go the extra mile selectively, without getting tangled up in tax complications.