How Much Does Providing Employee Benefits Cost The Company Owner?

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With a growing number of companies moving back to offer their employees benefits packages the question is no longer one of whether or not to offer benefits to employees, but more along the lines of accessing the best type of insurance plans to match the exact operations of each business. The best solutions are found with a beginning modicum of current statistics.

The Rough Cost to Employers

While salaries and wages alone are among the most significant operating costs for any business even without the provision of benefits, not offering benefits will ultimately cost more. The typical (basic) benefits for an employee earning $50,000 include life insurance ($150,) health coverage (for single employees–$2,000 to $3,000; and for families, between roughly $6,000 to $7,500.) Additional benefits (which are obvious incentives,) include long-term disability insurance ($250,) and dental plans ($240-$650.) These are all average estimates for a general overview of per-employee cost. The resulting cost actualization of an employee earning $50,000–with benefits could actually cost the company somewhere between $ 62,500 to $70,000 annually.

Current Insurance Cost Averages

While around 65% of Canadians currently have some form of job-provided private health insurance, the average household still spends around $4000 on private insurance and $2000 on out-of-pocket healthcare expenses, annually. Due to rising costs of healthcare, many Canadians are forced to augment with their own (paid for–out of pocket,) privately-purchased policies. In accordance with Canadian law, all employees must fully participate in company health coverage provided by their employers. Only then can they add privately-procured coverage. A few exceptions include maternity leave or when elsewhere-employed spouses pay less and have more services with lower deductibles (and can add you to their policy.)

Privately Acquired, Supplemental Insurance
When purchased as supplementary, individuals will pay monthly, on average:
• Family–$157
• Father as Single Parent–$78
• Mother as Single Parent–$110
• Individual Male–$47
• Individual Female–$80

Canadian Employers Opting for Better Options in 2016

Canadian employers will continue in 2016 to keep the cost rise of coverage for employees down to around 5%, but still say they will be making changes in what they offer. According to the Mercer Survey, these changes will be strategized by implementing consumer-directed plans that effectively avoid payment of the excise tax. The average cost-per-employee should rise by around 4.2%. As new, innovative options become available–giving more customizing control to the employer, many are switching carriers to access these new programs that increase satisfaction without decreasing quality of plan coverage. Avoiding the excise tax isn’t the only benefit here, as around 42% of Canadian small business employers are recognizing the significant advantages of improving employee health and well-being that are directly linked to benefit programs that provide more comprehensive coverage, with lower cost to both employer and employee.

Behind the Rise to Support Employer Coverage

The companies providing improved employee benefits packages are demonstrating how they ultimately pay off in medical plan savings. With the rise in more detailed options, the cost of adding benefits has substantially slowed down everywhere. Included dynamics of this movement are efforts to involve employees in taking responsibility to stay healthy. Employees become educated in the most effective methods of achieving excellent health by being engaged in the process and are given adequate support to continue.

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