Everything Small Business Owners Need to Know About Health Benefits & Employment Law

Employment Law and Health Benefits are a key concern for business owners. Therefore, we met with Ian Keith, Group Insurance and Pension Advisor and Sasha Willms, associate at Kelly Santini in our latest Fireside Chat Series.

We asked the questions and here is what we learned!

Can a small business sign up for health benefits?
Benefit options can be finalized with as little as a single employee company. Ian pointed out “this is a brave new world”. Is it expensive you ask? As it goes for everything, the more you spend the more you save! However, when it comes to benefits, the age of your employees can also play a big role. 

Can an employer modify or even terminate health benefits, without breaking any employment laws?
Always ask a lawyer, Sasha told us, if health benefits are cut, employees can bring claims for constructive dismissal. Which means an employee has the right to resign but it will be treated as a terminator and in turn they’re entitled to severance. Therefore, tip for employers, cut back on benefits (if you really must) don’t terminate them!

Does everyone need to be signed up on the same health benefits plan?
Employers sometimes want to know if the executive board can get greater coverage than the rest of the employees. In short, the answer is yes!

The next question on our minds was what happens if a staff member gets really sick?
Sasha was able to enlighten us on the Ontario Human Rights Code along with Ontario Employment Standards Act (on a side note every province in Canada has a human rights code and employment law). These codes basically act as an anti-discrimination code stating that every employee must be treated equally. Looking at it from a rates increase perspective? Thankfully, employers are covered and their rates will not go up even if someone needs medication that costs over 10,000$ a year. 

Should employers offer health benefits to stay competitive?
Ian brought up something very interesting, all industries now provide health benefits, even industries which normally didn’t in the past. There has been a huge shift throughout this pandemic! In order for employers to attract as well as retain employees they have to stay competitive. This means offering better health benefits! “Employers definitely cannot match Federal Government pension plans but now they can match the benefits plan!” said Ian. In other words, 100% employer funded benefit plans are now an industry standard.

How does an employee switching from full to part time work affect benefits?  
This is based on the following factors: age, length and character of employment, and availability of similar employment. Thus you must notify the employee prior to making any changes. What does that mean? If we have employee A who has been in the company for 20 something years, you should expect that the notice period would be somewhere between 24 to 26 months. Whereas, employee B, who has only been working for a year will only need notification several months in advance.

What happens to your health benefits during a leave of absence?
Mr. Keith advised employees who are going on maternity leave not to opt out of their benefits but continue paying in (if the employer is not covering them 100%). Keep in mind that if the cost is split an employee on any sort of leave can suspend their benefits. That is as long as the leave of absence is reasonable, four to six months is the average. Sarah made it clear “get everything in writing.”

How much should an employer be sending on employee benefits?
First and foremost, Ian pointed out that there are three types of coverage: single, family and someone who is receiving benefits from their spouse. Therefore, average employer should spend three to six percent of payroll. 

You’ve all heard of HCSA? The HealthCare Spending Account.
The HCSA is said to be a fantastic supplement in addition to a benefits plan. It can as well be used as a temporary benefits plan. What exactly is the HSA? Overall, It’s giving employees a certain amount of money that can be allocated towards health, vision and dental care. This is also a great plan for single employee corporations.

In essence, benefits have become a standard perk in the industry. Therefore, you should offer your employees benefits in order to stay competitive. Make sure to always use an experienced insurance broker to avoid risks. Surely know your rights as both an employer and employee! 

Ian Keith, CEBS – Co-Founder & Partner of 360° Health Benefits

With 18 years of experience working for three of the largest insurance companies in Canada, Ian brings extensive experience and knowledge of how benefits and pension plans function. 

Sasha Willms, Associate – Kelly Santini LLP

Sasha has been with Kelly Santini for over four years in the areas of employment law, estate litigation and insurance defence. Sasha received her BA from McGill University and moved on to law where she graduated and passed her Bar exam in Ottawa. 

Want To learn More?
If you liked this Fireside Chat Webinar Series, we recommend you check out our upcoming events to learn more about important topics for small business owners.

Zenbooks has been Canada’s go-to cloud accounting firm since 2015. The Fireside Chat Webinar series discusses useful insights for small business owners and explores small business issues. Zenbooks combines modern cloud technology with our in-house expert analysis to provide you with the online accounting service and guidance that best suits your business needs. From tax planning to payroll and monthly accounting services. They’re your finance team! (follow our blog here.)

Additionally, if you missed a Fireside Chat Webinar Topic, check out our YouTube Channel for some of our prior recordings.

Eric Saumure, CPA, CA, Principal

Eric Saumure, CPA, CA, Principal

Eric is a recognized Chartered Accountant (CA) and Chartered Professional Accountant (CPA) in the province of Ontario. Eric Saumure studied Accounting and Business at University of Ottawa, and obtained his CPA, CA designation during his time at KPMG LLP. Eric has 11 years of experience and actively works with over 300 clients. Eric Saumure is a Quickbooks Online ProAdvisor and a Xero Certified Partner.

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