Why Have An Employee Benefits Plan?

Apr 14, 2015

There are several reasons for offering employees a benefits package that includes, at minimum, life insurance, health and dental, and it is recommended that disability insurance and a retirement savings plan be included as well.

Firstly, there is an expectation from Canadian employees that their employer provides at least a life and health plan, so a benefits plan is a must if employers want to attract and retain good employees in a competitive industry.

Secondly, we’ve been told time and time again that employees are a company’s most valuable asset, and if that’s the case, then employers should protect these employees/assets. Arguably, the most valuable protection offered under a benefits plan is the disability insurance, especially long-term disability (LTD). If an employee is unable to work due to a disability and there is no insurance for this in your plan, how will they manage without their steady pay cheque? How will they support themselves and help support their family for weeks, months or even years of being unable to work? Often overlooked, LTD is the most important benefit – a living benefit.

A large drug expense or out-of-country claim could be equally as devastating. There are some astronomically priced and life altering/saving drugs coming to market, with annual treatment costs reaching as high as $500,000. Out of country emergency medical expenses can cost even more than that. Having coverage for these catastrophic expenses greatly protects your employees.

Last of the big ticket benefits is life insurance, which offers loved ones much protection at a time of death.

The transactional benefits, often perceived as the most valuable benefits due to the frequent expenditures are health and dental. These are important benefits as well as they do the most for the health and wellness of employees and their families. These benefits allow employees to get the day-to-day health and dental attention they require to function well (e.g. physiotherapy, prescription eye wear, medication, dental hygiene, etc.).

Employee and Family Assistance Programs (EFAPs), helping tremendously with the mental health of the workforce, would also fall under the health category.

All of these things help with employee morale as they feel that their employer cares about them – that they are valued and protected, which naturally leads to higher productivity, and better bottom-line results for the business.

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