In Canada, employees want healthcare coverage, but more specifically the prescription drug coverage that forms part of an employee’s healthcare cover. In Canada this is called ‘extended healthcare’ and it means your employees will have better access to affordable prescriptions. After health cover, Canadian employees rank these four benefits in this order of importance: Disability, Retirement, Death, and Wellness Programs.
Cowan Insurance Group
For a typical employer-sponsored benefits package, which includes medical, optical, dental, AD&D (Accident Death & Dismemberment), and possibly disability, the cost is 5,000- 7,000 Canadian Dollars per annum or about 420-580 Canadian Dollars per month.
Mandatory employee benefits in Canada include pension, legislated and parental leaves, PTO, employment insurance and eye exams. Common supplementary employee benefits include retirement, healthcare, voluntary and flexible benefits, healthcare spending accounts, gyms and workplace canteens. Employee perks are far ranging and include virtual care, mental health training, and digital health and fitness platforms.
Mandatory Employee Benefits
Canada Pension Plan (CPP) is a mandatory and contributory savings plan for all employed Canadians. Effective January 1, 2020, employees and employers contribute 5.25%, (Quebec 5.7%) up to the Years Maximum Pensionable Earnings (C$58,700 in 2020). Increases to CPP premiums are scheduled to occur annually, from 2019 to 2023 when both employers and employees will contribute 5.95% up to the Years Maximum Pensionable Earnings. In 2023 there will also be an additional 4% premium on earnings between the maximum and an upper-earnings limit that is expected to be approximately C$82,700 in 2025.
Income from CPP can start as early as age 60, or be deferred to age 70.
Old Age Security (OAS) is paid from general tax revenues and is not something that Canadian citizens contribute to directly. Income from OAS can start as early as age 65, or be deferred to age 70. If you are 65 years old and meet the residency criteria the maximum monthly OAS payment is $613.53 in 2020. To qualify for the maximum, you must have been a Canadian citizen for 40 years after your 18th birthday. To collect a minimum OAS payment, you must have been a Canadian citizen for 10 years after your 18th birthday.
When designing your employee benefits in Canada, your Canadian Retirement Savings Plan should take care around:
- The plan type, which should be competitive within your sector (i.e. Registered Pension Plan (both Defined Contribution and Defined Benefit), Group RRSP, or Deferred Profit-Sharing Plan)
- The contribution formula
- Provider selection; the provider should specialize in your chosen plan type, with competitively low investment fees, state-of-the-art technology and a comprehensive investment platform
Canada has one of the highest counts of government-regulated and legislated leaves globally. These leaves, although paid through government-sponsored Employment Insurance benefits, are job-protected, which means the employer is responsible for maintaining the employee’s position until it is reasonable for the employee to return to work.
Leaves are governed based on Federal or Provincial mandates and vary by province.
Paid time off
Maternity/paternity pay—maternity benefits (except Quebec)
- Benefits are payable to the biological mother (including surrogate mother) only, for a maximum of 15 weeks. A woman may elect to receive benefits at any time from the 12th week preceding the expected week of delivery, or from the week of delivery, if earlier, and can end as late as 17 weeks after the expected date of delivery or the week in which delivery occurs, if later.
Parental leave (except Quebec)
- Benefits are payable to the biological or adoptive parents for a maximum of 35 weeks
- Benefits must be claimed within a 12-month period, at a rate of 55% of average weekly earnings, or extended parental leave up to a maximum of 61 weeks taken over to a period of up to 18 months at a benefit rate of 33% of average weekly earnings
- Two parents can share these 61 weeks of extended parental benefits
- If your newborn or newly-adopted child is hospitalized, the 52-week or 78-week timeframe can be extended by the number of weeks your child is in hospital; to qualify, you need to have worked at least 600 hours in the last year
On December 4, 2017, Bill C-44 passed amendments to the Canada Labour Code to ensure job-protected and expanded EI leaves for federally regulated employees.
Changes to maternity and parental benefits do not apply to Quebec, where parents are subject to the QPIP, which offers different benefits. In Quebec, benefits amount to nearly C$900 weekly, and Quebec has also eliminated waiting periods, significantly reducing the qualifying time.
For most people, the benefit level is 55% of an employee’s average insurable weekly earnings, up to a maximum amount. As of January 1, 2020, the maximum yearly insurable earnings amount is C$54,200, which means that an employee can receive a maximum amount of C$573 per week.
The maximum benefit period varies from 14 to 45 weeks. It is dependent upon regional unemployment rates, as well as the number of accumulated hours of employment over the preceding 52-week period, or since an employee’s last claim, whichever is shorter.
Employment insurance benefits entitle the recipient to income replacement as a result of:
- Parental leave
- Compassionate care leave
- Eye exams are usually included as part of an extended health care benefit, at a reasonable and customary level every 24 months for adults, and every 12 months for children under the age of 18.
- Vision benefits are separately defined, and customarily include eyeglasses and contact lenses at C$250/24 months.
Supplementary Employee Benefits
In addition to saving for retirement, employees look for low-cost savings vehicles for short- and medium-term goals. Payroll deductions placed into a tax-free savings account are an example of an employee-funded cost savings vehicle that’s attractive to all demographics.
Offering supplementary healthcare coverage is important for your employee benefits in Canada. Eighty-seven percent of Canadian employers offer an extended health care benefit to supplement the government health insurance plan for salaried employees.
- 73% of employers pay 100% of the premium
- 49% of employers offer extended health care to hourly workers
- 74% pay 100% of the premium
Extended health care includes prescription drug coverage, hospital, paramedical practitioners, supplemental health care, and out-of-country coverage at varying levels, depending on employer size, demographics, and industry.
Larger employers will often provide employees with a range of “voluntary benefits” that can be provided at discounted prices through the employer. There is an emerging trend for employers to offer innovative voluntary programs, such as virtual wellness and pet insurance.
Flexible benefit plans are common in Canada and highly desired for their flexibility, ability to address generational differences in the workforce, and due to their attractiveness to employees. However, flexible benefit plans are commonly only offered by larger employers. A few carriers have come to market recently with small to mid-size off-the-shelf flexible benefit plans that are getting traction in the market place.
Health care spending and wellness accounts
Many employers address employees’ desire for flexibility and their changing needs with health care spending accounts (100% employer-funded). These accounts enable employees to use available funds within the parameters of eligible expenses dictated by the Canada Revenue Agency (CRA) to meet their individual/family needs. Wellness accounts are administered differently and have a broader scope of eligible expenses. They are taxable for the employee and, therefore, not as commonly implemented.
Very large employers can provide ‘gyms onsite’ facilities, whereas smaller employers may offer gym subsidies or access to a gym with lower corporate rates. Many employers choose to subsidize this benefit through wellness accounts that provide more flexibility for employees with wellness needs outside of the standard gym membership options.
This benefit is not common in Canada; however, in highly competitive industries, such as the technology industry, we are seeing an increase in catered lunches for employees. Large employers often have an onsite cafeteria with discounted food prices.
Employee Perks in Canada
Digital wellness platforms
Digital wellness platforms that incorporate personalized programming and rewards tied to health care spending accounts or wellness spending accounts are becoming quite popular for multinational employer’s employee benefits in Canada. Younger employees especially appreciate this benefit.
Perks and loyalty programs
Give employees access to member services at a preferred rate. The costs can vary from free to S2 to $4 per employee per month. Some programs can provide global or North American savings, and are viewed as an opportunity to synchronize cross border offerings.
Corporate health challenges
Provide team-based and individual challenges that are included in the membership fees (ranging from S245 to S350/month), in addition to other services, such as onsite fitness classes. Team challenges can include emails, promotional posters, and other materials created and sent by a vendor. Many programs use wearable devices to track fitness data. Some employers choose to purchase wearables for employees (taxable benefit) to incent participation.
Provides health navigation, health risk assessments, and health coaching. Programs are varied and can help with conditions from high cholesterol to back and neck pain, stress, depression, diabetes, and musculoskeletal conditions. Biometrics can also be included to assess baseline health for program coordination. There are varying levels of support offered, and costs vary.
These events are an educational and interactive event designed for outreach and to provide basic preventive medicine and medical screening to employees at work in conjunction with workplace wellness. They can also be used to promote health and wellbeing initiatives and programs which are available to employees. Fairs can include wellness, perks, promotion of onsite fitness, training, and subsidized meal programs.
Online digital health and fitness platforms
These are an increasingly popular low-cost option for health and wellbeing offerings because they are easily accessible programs available to employees as needed. They typically include health risk assessments, gamification, rewards, challenges, targeted behavior change messaging, and targeted health recommendations. Many wellness platforms can be unbundled or bundled with rewards and recognition, and EFAP. Some platforms put less focus on traditional ‘wellness’ and more on training the brain to see the positive. The goal is to help employees be happier, knowing that happy employees are more engaged and more productive.
The intent is 24/7 health care access across Canada with responses in under 10 seconds for text. Images can be shared, and there are no time limits on chat or video calls. Employees can also reach nutritionists, naturopaths, and mental health specialists for an additional fee to employees. An online doctor visit may have a per appointment charge attached. Some services include prescriptions and delivery through an app.
Mental health training
Leadership training on mental health, anti-stigma campaigns, mindfulness, and stress reduction programs are becoming common. Sit-stand workstations, walking work meetings, and treadmill workstations to support sedentary office workers may also be included.
Some employers are implementing ‘vacation blackout’ email policies that prevent employees on vacation from accessing or receiving work email. Flex benefit programs have added an opportunity for employees to buy ‘wellness days off.’ Sleep disorders are affecting more than 60% of the Canadian population, resulting in increased workplace accidents, chronic disease risks, and reduced productivity. More forward-thinking employers are investing in nap pods and encouraging employees to take a 15 to 30-minute afternoon nap to boost productivity in place of coffee breaks.
Physical workplaces are being modified to encourage healthy behaviors. Some employers have centralized waste facilities to encourage employees to walk to the garbage. Cafeterias are being rearranged to orient healthy foods in more visible locations. ‘Bringing the outdoors in’ is a trend to help reduce stress and includes water displays, natural lighting, pictures of the outdoors, and living walls.
Flexible employee benefits
Young employees are looking for flexible employee benefits and an employer that cares about their health and wellbeing.
Onsite wellness initiatives
These include massages, pilates, catered meals, healthy snack bars, and fitness challenges.
This includes financial education for employees, particularly around the importance of adequate retirement planning.
This information about employee benefits in Canada is provided by Cowan, Asinta’s employee benefits consulting Partner in the Canada.