08: Benefiting from Your Employee Benefits
Does your employer offer benefits like health and dental care, life and disability insurance, or a health or wellness spending account? First of all - good. You deserve it.
Second of all - do you know everything you need to know about the benefits that are available to you to take full advantage of what you’ve been offered? No? Let’s figure out how to do that together, today.
Why is this important?
Benefits like group insurance are part of the total amount your employer has budgeted to pay you along with their portion of your Canada Pension Plan and Employment Insurance premiums, and as much as you might want and deserve more dollars in your paycheque, it’s what your employer has decided to offer, so let’s make the most of it.
How to gather the information you need
The first step is to understand that most of your employee benefits are actually provided by an insurance company, not your employer, but your contact person for information is almost always your employer, not the insurance company. With that knowledge in your pocket, it becomes a bit easier to understand who to ask for what and what to expect when they give you answers.
For example, if you work in a small company, the contact person (or Plan Administrator) might be your boss. It’s possible, depending on how knowledgeable they are and how much they care, that they can tell you everything you need to know and/or put their hands on the plan documentation quickly.
It’s equally possible that you’ll need to do some sleuthing to find the insurance booklet and understand what it says, or remind your boss to get it from the insurance company (again), if they can’t find it when you ask.
Or, if you work for a really big organization, all the benefit information might be provided to you up front on your first day, be easily available on the company intranet, or even be sent out in regular reminders from the HR team.
Regardless of who you have to talk to (or remind a thousand times) to get the information, the three most important things to find out about your benefits are:
What benefits are available to you
What conditions or limitations there are on each benefit
When you can make changes to them
At a smaller company with no centralized HR department, you’re going to be asking for your group benefits booklet, which outlines all of the possible benefits available, definitions of key terms like “disability”, the limits and exclusions of those benefits, and when you can enrol in or change them.
You’ll also want to ask for your benefit summary, which is–you guessed it–the summary of the benefits you have personally enrolled or been enrolled in. Sometimes the benefit summary is included in the first few pages of the benefits booklet, and sometimes it’s a separate document.
Fair warning, these documents aren’t the easiest to read or understand, even with the definitions in front of you. You might want to give yourself time to tackle each benefit listed in the summary separately, with the summary, the detailed information, and the definitions in front of you, armed with a pencil and a highlighter.
Where to start if it all seems like too much
If that seems as overwhelming as it probably will be, unless you’re a real insurance nerd (in which case, hi, why are you here?) may I suggest starting with the basic coverage–the stuff you don’t have a choice about.
Basic Life Insurance (usually a multiple of your salary)
Basic Accidental Death & Disability (not totally useless, and very cheap for a reason)
Short-term Disability (a multiple of your salary, a period of time, a waiting period, conditions) often paid for directly by your employer, not part of the insurance contract, may need to find it in a different document or by asking “how many sick days do I have?” or “do we have Short-Term Disability Insurance?”)
Long-Term Disability (a waiting period during which you’re unable to work, the percentage of your salary you’ll receive, a period of time to receive it, and conditions for how long you can receive it depending on how disabled the insurance company thinks you are)
In your review, pay special attention when you see the phrase “no-evidence maximum” or “evidence of good health”. These indicate that you need to prove to the insurance company that you’re, in a word, insurable by virtue of not needing insurance just then.
When you see these phrases, stop and read even more carefully. Do they apply to your life insurance? Your optional insurance? Your disability benefit? If so, did you get a medical exam and submit it to the insurance company? Until you’re sure that you’ve provided the appropriate evidence in the appropriate format to the appropriate person, you might not actually be covered for the amount you think you’re covered for.
Then, move on to the optional stuff:
Optional Life Insurance (as in, more than the basic amount)
Optional Spousal or Dependent Life Insurance
Various tiers of Dental and/or Extended Health Insurance (give yourself extra time for these, they remind me of the old premium cable options where the only specialty channels you want are in different packages, plus, every single thing has a different period of time before you can access it again, a different maximum amount per person per period, and a different percent that’s covered)
Health Spending Account (a pot of money that renews each year and that you can use for medical expenses that the CRA says are eligible for the medical expense tax credit, and that isn’t taxed when you spend it)
Wellness Spending Account (another pot of money that renews each year and that you can use for activities your employer specifies, and might include things like a gym membership, a nutritionist, or recreational activities, but that is taxed when you spend it)
Travel Insurance
Employee Assistance Program - (sometimes financial planning, legal advice, or career counselling is in there, sometimes short term crisis support, sometimes caregiving support if you have kids or older family members that you take care of)
What can this tell you or your financial planner?
This information matters to Present You in one way and to Future You in another.
Present You might benefit from a massage, or regular dental check ups, or have a pressing need for a crisis counsellor or a new pair of glasses. Present You needs to know what you have access to, how much of the cost is covered by your plan, and how much you’ll have to pay for yourself.
Future You benefits from already knowing what’s available. If you’re familiar enough with your benefits that you can make informed decisions about, say, getting medical care while on vacation without having to either spend hours trying to understand what you’re covered for in the middle of an emergency, or just doing the thing that seems right at the time and compounding the stress with anxiety about what the financial fallout will be, it could be the small thing that changes a terrible, no good, awful experience into just a bad one.
Or, if Present You does the work to understand roughly how much money Future You would receive, after tax, if you get so sick or so injured that you can’t work for a while, and realizes that the coverage you have from your employee benefits program is nowhere near enough to cover your minimum needs, or won’t last long enough if you can never work again, that’s vital information Present You can use to go about filling those gaps.
If Future You experiences a disability (like the 27% of Canadians aged 15 years or older did in 2022), they’ll benefit from the extra income or security they have at an enormously stressful time in their life because of the time you invest now.
Cynically, all of these benefits are paid for by your employer to try and avoid the possibility that your personal, human difficulties don’t compromise your productivity at work, and you might have a guess as to what I think about that…but just because your employer might be treating you like a piece of factory equipment who needs regular oil and maintenance to make the most widgets possible, it doesn’t mean you shouldn’t benefit from your benefits while they’re at it.