A Complete Guide to Group Health Insurance

Offering comprehensive group health insurance is one of the smartest investments a Canadian business can make. It’s not just a perk, but a powerful way to attract top talent, support employee well-being, and foster long-term loyalty.

At KASE Insurance, we specialize in helping businesses build tailored, scalable group health benefits for employees. This guide will walk you through everything you need to know about group medical insurance in Ontario, including how it works, why it matters and how to choose the right plan for your team.

What Is Group Insurance?

Group health insurance (also known as corporate health insurance or employer health insurance) is a benefits plan provided by an employer to its employees. It typically covers services not included in provincial healthcare plans, such as dental, vision, paramedical, and prescription drug coverage.

Why is it important? According to recent data, 41% of the 64% of Canadians with insurance plans obtained them through an employer plan. With millions of Canadians relying on group insurance benefits, it’s evident that they’re essential to workers of all ages.

Explore Employee Benefits Plan

The Advantages of Group Health Benefits for Employees

Why should your company offer group insurance benefits? There are numerous advantages to offering employee benefits to teams, both for employees and employers! 

Here’s what both parties gain as a result of group insurance benefits:

✓ Improved employee satisfaction, morale, and retention

✓ Enhanced ability to attract skilled talent in competitive markets

✓ Tax advantages for employers and often lower premiums for employees

✓ Faster access to health services and preventative care, reducing absenteeism

✓ Support for mental health, vision, dental, and more

✓ Reduction in financial and emotional stress on the employee and their family, resulting in consistently high productivity, positivity, and less burnout

 

Source: Canva

How Does Group Health Insurance Work in Ontario?

While Canada’s healthcare system provides a strong foundation, provincial plans like OHIP don’t cover everything. That’s where group health insurance in Canada comes in.

Here’s how it works:

• Supplemental Coverage: Group plans often include dental, vision, drug coverage, mental health support, and paramedical services. They may also include (some) coverage for osteopathic treatments, physiotherapy, chiropractic and massage services.
  
  
• Premium Sharing: Employers usually pay all or a portion of the premiums. Employees may contribute through payroll deductions, but this is situational. Speaking to an insurance broker can help you determine if this is the best option for your company.
  
  
• Plan Customization: Plans may be traditional or modular, allowing businesses to tailor offerings based on budget and employee needs. Sometimes, a flexible, more custom benefits plan works better for diverse teams—younger employees may be focused on family planning and appreciate coverage for that, whereas other employees may enjoy educational or wellness-related benefits.
  

Coverage Type	OHIP (Public)	Group Insurance (Private)
Doctor visits	Yes	Sometimes (e.g., telehealth)
Hospital services	Yes	Private or semi-private upgrades
Routine Dental care	No	Often included
Vision care	No	Often included
Prescription drugs	Partial	Often included
Mental health	Partial	Often included
Massage, physio, chiropractic	No	Often included

 

Types of Group Health Insurance Plans

Group health insurance plans come in various forms to suit different business needs and employee preferences. 

Traditional Group Plans

These plans offer standardized coverage for all eligible employees, with set benefits such as dental, vision, and extended health. They're easy to manage and ideal for businesses seeking consistent coverage across the board.

Modular/Flex Plans

Many Canadian businesses offer flexible benefits to suit the needs of today’s workforce. Modular plans allow employees to choose from a range of pre-designed benefit packages, making them great for diverse teams with varying health needs, without adding complexity for employers.

Health Care Spending Accounts (HCSA)

HCSAs provide employees with a set dollar amount to spend on eligible health expenses. They offer flexibility, cost control, and tax advantages while complementing or enhancing a core group benefits plan.

Administrative Services Only (ASO)

ASO plans let employers self-fund health claims while outsourcing plan administration. They offer cost savings and greater control but may carry more risk if claims are high or unpredictable.

Hybrid Plans

Hybrid plans combine traditional insurance with options like HCSAs or flex modules, balancing structure with flexibility. They’re ideal for growing businesses seeking a scalable, employee-centred benefits solution.

5 Tips for Choosing the Right Group Plan

Selecting a suitable group plan from the many available types depends on many factors. Here’s how to choose what’s best for your employees:

1. Understand Your Team’s Needs & Preferences

Before you select your plan, consider your workforce’s demographics, family structures, health concerns, and cultural expectations. Ask yourself: Do your employees value mental health support? Is dental a must-have? Are the majority at an age where IVF and IUI are being sought? Do they have young children? If the answer is mixed, perhaps a flexible plan is best.

2. Set a Realistic Budget

Decide how much your company can afford to contribute. Many businesses cover between 50% and 100% of employee premiums, but what works for one company may not work for yours.

3. Compare Plan Flexibility & Customization Options

Some insurers offer traditional plans, where every team member can enjoy the same benefits. Others opt for modular plans, allowing employees to select from different tiers. The more choices you offer, the more value employees feel they’re receiving.

4. Consider Future Growth & Scalability

Your benefits plan should grow with your company; you must ensure your group plan can accommodate new hires, remote workers, or an expanded office.

5. Work with an Experienced Insurance Broker

A knowledgeable advisor can help you compare carriers, manage renewals, and identify gaps. Speaking to a benefits broker is the best way to ensure you make the right choices for your company.

Read more: A Complete Guide to Work Benefits in Canada

The Fine Print: Compliance, Eligibility, and Tax Rules

Aside from choosing the right group medical insurance plan, companies must also meet eligibility, follow compliance rules, and abide by tax requirements. Here are other things to consider when providing group health benefits for employees.

Minimum Group Size

Most group insurance providers require at least three to five full-time employees to qualify for coverage. Some carriers offer “micro-group” plans for smaller teams, but coverage options may be limited. Eligibility rules can vary, so it’s essential to work with an advisor to explore your options based on your business size and structure.

Taxable vs. Non-Taxable Benefits

In Canada, most health and dental benefits are non-taxable to the employee if the premiums are paid by the employer. However, certain benefits (such as life insurance or accidental death and dismemberment coverage) may be considered taxable benefits. Clear documentation and payroll setup help ensure tax compliance for both the business and its employees.

Employer Contributions

There is no fixed rule on how much an employer must contribute to a group health plan, but many choose to cover 50% to 100% of premium costs. Employer-paid premiums for health and dental are not typically considered taxable income for employees, making them a tax-efficient investment in employee well-being.

CRA Compliance

The Canada Revenue Agency (CRA) requires that group benefits plans follow specific rules regarding taxation, record keeping, and plan administration. Non-compliance can lead to audits or penalties. Partnering with a licensed benefits advisor ensures your plan meets CRA standards and avoids issues during tax season.

Eligibility & Waiting Periods

Employers may establish waiting periods, typically 30, 60, or 90 days, before new employees can enroll in the group benefits plan. Eligibility is usually limited to full-time employees, but some plans can be extended to part-time or contract workers, depending on the hours worked and provider policy.

Image Source: Canva

Finding the Right Health Benefits Insurance Advisor

A licensed group benefits advisor is your strategic partner in designing and managing your comprehensive health insurance plan. They advocate for your business, help you make informed decisions, and ensure your plan remains cost-effective and competitive, so you can focus on running your company with confidence.

In short, a licensed advisor will help you:

• Compare multiple plans and carriers
• Interpret policy fine print and exclusions
• Navigate renewals and cost increases
• Stay compliant with Canadian regulations

 

Questions to Ask Your Insurance Advisor

Here are a few common (and important) questions you may wish to ask your advisor when discussing your group benefits plan options:

• What type of group health plan is best for my team size and budget?
• How many employees can be covered?
• How do employer and employee contributions typically work?
• Which insurers offer the best flexible options open for customization?
• Can part-time or contract staff be included in our plan?
• How are premiums and benefits affected as we scale?
• What benefits are considered taxable by the CRA?
• How do we handle renewals, cost increases, or policy changes?
• What support do you offer during onboarding or employee education?
• How can we combine health benefits with wellness or spending accounts?
• What are my options if an employee leaves or is on leave?
  
  

Is My Business Right for Group Health Insurance?

You may be ready to offer company health insurance if:

✓ You have at least three employees

✓ You want to retain and reward your team

✓ You’re seeking tax-efficient ways to invest in employee well-being

✓ You want to enhance your recruitment strategy

✓ You’re building a company culture rooted in care

Offering group health insurance signals that your business values people, not just productivity. Whether you're scaling quickly or building long-term loyalty, employee benefits can be a strategic advantage. The right plan helps you stand out in competitive hiring markets while strengthening trust and engagement within your existing team.

Experience the KASE Advantage for Your Group Benefits Program

KASE Insurance is an award-winning commercial insurance brokerage based in Toronto. Known for our deep industry expertise and client-first approach, KASE partners with leading insurers to deliver customized coverage solutions for businesses of all sizes. Whether you're a startup or an established firm, we provide tailored group health benefits that align with your goals and grow with your team.

We’re proud to offer:

✓ Partnerships with Canada’s top insurance carriers

✓ Expert advisors who work with you, not just for you

✓ Tailored solutions for small, mid-size, and growing businesses

✓ Proactive support during renewals, audits, and onboarding

✓ Transparent, strategic, and always on your side

FAQs About Group Insurance