If you’ve had benefits from your employer for a while or are just starting with your first employer, the universe of Ottawa Life Insurance plans can seem overwhelming and, at times, needs to be clarified. We have broken down some of the more popular benefits to help you know the nature of these benefits and how they function.
Before we get into the specifics of employee health benefits, it is essential to know that the coverage of plans varies between employers. Hence, employees must read your organization’s benefits guidelines for information on your range.
Here are some words that you can understand as you read this blog:
Terms to Be Aware Of
The term class refers to the benefits offered to specific employees in an organization. Offer Employers typically utilize classes to stay competitive in the job market to recruit and keep employees. This an excellent example of a course: that offers various coverage levels.
- Class A for Executives include more extensive help. It could include more life insurance, disability insurance, and dental and health insurance coverage.
- Class B for Managers includes more significant benefits than employees. However, it is likely less comprehensive than the executive class.
- Class C for Employees includes more basic insurance amounts.
Life Insurance
Life Insurance is money paid by the insurance company to the beneficiary of an employee upon their demise. The term beneficiary refers to an individual or persons named by the employee on their benefits plan who will receive a payment when an employee dies. It is typically an adult, spouse, or family member.
The employer decides the life insurance benefit for the group. It can be:
- A Flat Amount in which the amount that gets paid to the beneficiary is a fixed amount. The fixed amount may change depending on the employee’s benefits class membership.
- Gradual Amount in which the amount paid to a beneficiary depends on the employee’s salary.
It gets also referred to as Basic Life Insurance or Life Insurance in the employee handbook.
Accidental Death & Dismemberment
Accidental Death and Dismemberment protection are available in an accident that could result in an employee’s death, loss of limbs, or serious injuries. This benefit gets usually offered as the Life Insurance policy rider. It is the equivalent of the benefit amount as the Life Insurance maximum. While we hope we don’t require this coverage in the future, it is necessary for employees and their families should it occur.
Like Life Insurance, the amount the beneficiary gets for both is typically a fixed or a graded sum and gets decided from the company’s perspective.
Suppose the group Accidental Death & Dismemberment insurance is available as a rider paired with Life Insurance instead of separately. Suppose the employee’s death results from caused by accident. In that case, the beneficiary will receive a payment of his Life Insurance maximum and Accidental Death and Dismemberment maximum. In that case, the amount paid will be double that of the face value in the event of accidental death.
Dental
Dental insurance is among employees’ most frequently used benefits since most employees receive regular preventive dental examinations and cleaning.
Dental insurance gets typically divided into three categories.
1: Basic Services
- Recalls include exams, bitewing X-rays, preventative cleaning, and fluoride treatments.
- Basic Restorations comprise fillings and inlays.
- Removals, as well as Surgical Services, include general anesthetics as well as intravenous sedation.
- The treatment for endontics includes standard root canal therapy.
- Periodontal treatment may include scaling or root planning.
2: Major Restorative Services
- Standard Dentures get completed immediately and partially.
- Standard Crown Restorations or Inlays on natural teeth.
- Repair: or re-cementing crowns on bridgework and lays on natural teeth.
3: Orthodontics
comprises braces, retainers, and other procedures that focus on the problem of mispositioned teeth and jaws and unaligned bite patterns.
Dental plans may assign distinct maximums to Major, Basic, and Orthodontics. Or they can combine Basic and Major to ensure that the maximum amount gets divided equally.
Prescription Drugs
Prescription drugs are yet another popular and widely used health benefit. The benefit typically will cover a specific amount of prescriptions and dispensing costs. Most employers have a pre-approved list of medicines that are eligible for reimbursement. Often, there is a compulsory substitution requirement for generic drugs.
- Mandatory Generic Substitutes occur when an employer’s health plan obliges employees to purchase generic versions of brand-name drugs when a generic substitute is readily available.
- Generic Drugs contain identical medicinal ingredients in the brand name versions. However, the non-medicinal ingredients could differ, meaning that the drug’s size and color could vary between the generic and brand drugs. Generic medicines are only a tiny fraction of the cost of brand-name drugs.
Short-Term Disability
Short-Term Disability is a type of benefit provided for employees unable to work due to an accident, injury, or Illness for a short period. Short-term Disability typically protects workers for 17 weeks and provides 60% to 70% of their earnings. Suppose an employee requires longer time off from work and has exhausted their coverage under Short-Term Disability. In that case, they may be eligible for Long Term Disability when it gets included as part of an employee benefit plan.
Long-Term Disability
Long-Term Disability benefits get offered to those with serious health problems who cannot work because of injuries, accidents, or an illness that isn’t related to their duties.
- Long-Term Disability typically can cover up to 60-70 percent of an employee’s salary on leave.
- Benefit payments generally begin about 3 to 6 months after receiving Sickness or employer-sponsored Short-Term Disability.
- Long-Term Disability coverage will differ from plan to plan. For instance, some plans pay for Disability if the employee cannot perform their job in the current field. While other programs only provide benefits if an employee cannot get employed in any field.
- Long-Term Disability insurance has an end date that may differ from plan to plan and may occur within two years, five years, or even up to age 65.
Critical Illness
Critical Illness provides employees with a tax-free lump sum amount when they are diagnosed with an illness that is serious and lasts for the initial time.
- Employees do not have to be terminal to get the benefit; however, proof of medical condition is necessary.
- Employees can still claim their money regardless of whether they have a full recovery.
- To claim benefits, an employee must submit evidence of an illness from an MD and be alive for 30 days after diagnosis.
This protection helps protect employees who must pay for unexpected or additional costs resulting from illnesses. Employees can choose how to pay for the lump sum.
Spending Accounts
Spending Accounts have become extremely popular in recent times and can get classified into two kinds:
- Health Spending Accounts
- Lifestyle Spending Accounts
Health Spending Account
Many companies, tiny ones, are looking into Health Spending Accounts to keep costs at a minimum while offering employees health insurance. Employers pay only for what they use by their employees.
Every year, employers supply employees with a set amount of money that can get used to purchase medical services or to top off the existing health plan, which still needs to be fully covered. Some examples of how employees could use the Health Spending Account include top-offs for massages, Dental, etc.
Health spending accounts are tax-free benefits, meaning that employees won’t get taxed for the amount they spend and get reimbursed as they would with the regular health benefits they receive.
Lifestyle Spending Account
Lifestyle Spending Accounts provide users greater flexibility than a Health Spending Account. Like Health Spending Accounts, employers give employees a set amount of funds to spend annually. However, employers can set limits regarding what items employees can purchase or make the account open to change. The employees can buy gym memberships; transit passes and ski passes, workout clothes, and other items based on plan requirements.
Like Health Spending Accounts, employers only pay for the services they use by their employees. The only drawback to Lifestyle Spending Accounts is that they’re a tax-deductible benefit and therefore are an income tax-deductible for employees.
The main distinction between a Health Spending Account and the lifestyle Spending Account lies in the fact that the Health Spending Account has to get used on health-related products. In contrast, the lifestyle Spending Account can get used on almost anything an employee wants.
Final Thoughts
Ottawa Life Insurance has offered health, life, and group insurance for businesses and individuals throughout Ottawa. We’re committed to helping our clients remain secure in situations of need. For further information, contact us by phone at (613) 454-1424 or via email at info@ottawa-lifeinsurance.ca.
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