Traditional healthcare plans sold by insurance companies do not always represent good value for small businesses. Typically, these plans pay out in benefits only 50% to 60% of what they take in as premiums. The balance is profit. And, if in any year the insurance company has to pay more than 50% to 60% in claims, you are looking at a hefty premium increase the next year.
Their second major drawback is choice, or the lack of it! Insurance plans designed for small business often seem to have a longer list of things that aren't covered than things that are. Some coverage such as orthodontics is simply not available at all for small businesses and even routine procedures are heavily restricted. Such plans simply won't provide you and your family with the coverage you need, particularly in these days of government cutbacks to core public healthcare plans.
A much more sensible approach is to work with a benefit plan specialist to set up your own self-directed healthcare plan. These plans are highly efficient, paying out approximately 90 cents on the dollar contributed. And, because it is self-directed, you have total control over costs: no arbitrary premium increases … ever. Finally, self-directed plans can be set up to cover virtually any healthcare expense, from orthodontics to botox injections or laser eye surgery.
Properly set up, these plans are a tax-deductible expense for an employer. On the other hand, benefits are completely tax-free in the hands of recipients. This is one of the few tax breaks left for average Canadians. Special, low-cost insurance can also be added to protect against medical expenses when you are traveling or the costs that might result from a very serious illness at home, such as for very expensive prescription drugs or private nursing.
Self-directed healthcare plans can be set up for any size company, from the sole proprietor to a company with hundreds of employees. And, as members of SBBS you will receive preferential pricing from one of the leaders in the design and administration of self-directed healthcare plans, Accerta. To learn more, visit www.accertachoice.ca.
Lina Azem
