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Business Owners’ Benefits Cheat Sheet

You don’t have time to administer the plan – that’s why your HR manager takes care of the benefits. Still, there are some things you need to know as the business owner.

During the Hiring Process

  • Do not offer the benefit plan to independent contractors.
    • This will negate their status as a contractor, thus converting them to being an employee.

    • Do take note when interviewing candidates that individuals who ask for extreme detail on the benefit plan may end up being a costly hire.
    • Don’t waive the waiting period for a new hire that has not been covered within the last 6 months, unless you’re prepared to pay for the higher premium due to hire claims.
      • Employees who have never had a plan, or haven’t been on one within 6 months to a year, tend to spend a much larger amount, therefore, affecting your renewal.
    • Do offer the plan to everyone who is eligible.
      • You set eligibility criteria, but stick to it, otherwise “discrimination” can bite you.
    • Don’t let eligible employees refuse the benefit plan.
      • It’s legal to make it a mandatory condition of employment.
      • If they dig their heels in, make sure their spouse signs off that they also agree to refuse. However, this will not protect you in court.

    During an Employee’s Tenure

    • Do not terminate benefits of an employee on sick leave.
      • At minimum, keep the life insurance but opt them out of health & dental.
      • Common law: Judges believe that it’s reasonable to extend health & dental benefits for 12-24 months.
    • Do proactively create a policy for sick leave now, before anyone needs an extended sick leave.
      • Never continue paying their full payroll – take advantage of EI sickness benefit
    • Do let us know if anyone is not actively at work.
      • Other than vacation, mat leave, and regular sick days, please tell us about leave of absences, severances, sabbaticals, sick leaves, or any other time that they are not actively at work.
      • Mat leave / parental leave: benefits remain in force as if they were a regular employee. It’s discriminatory to change any terms of their benefit plan due to mat leave (i.e. asking them to pay for their premiums when normal employees do not pay).
    • Don’t ever ask employees for feedback on their benefit plan’s coverage. You dictate, just like salary.
    • Do use Cost-Plus services for business owners to deduct medical expenses from the business.

    Termination of Employment

    • Do extend benefits during the notice period of a termination.
      • Employees in Ontario are entitled to 1 week per year served, max 8 weeks.
      • Severance: we recommend extending up to 6 months max.
      • You can go beyond 6 months, but do not offer a deal to extend benefits during severance unless you speak to us first.