A group benefits plan is the insurance package an employer buys (or self-funds) for its staff: extended health care, dental, disability income, life insurance and usually an employee assistance program, sometimes topped up with a health or wellness spending account. Because the employer negotiates one contract for everyone and often pays some or all of the premium, the cover usually costs you less than buying the same protection on your own.
This guide explains what each part of a typical plan covers, how limits and percentages work, and what to compare when you’re weighing a job offer’s benefits. It is one of the employer benefits guides in the workplace rights and employee benefits hub.
The Parts of a Standard Group Plan
| Benefit | What it covers | How cover is usually set |
|---|---|---|
| Extended Health Care (EHC) | Prescription drugs, paramedical services, vision, medical equipment, out-of-country emergencies | A percentage of each claim, often after a deductible, up to annual or per-service maximums |
| Dental | Preventive and basic work; sometimes major work and orthodontics | A percentage by class of service, up to an annual maximum |
| Short-Term Disability (STD) | Income while you’re off sick for a shorter period | A percentage of pay, typically for up to 6 months |
| Long-Term Disability (LTD) | Income after STD ends, for a longer illness or injury | Most plans replace 60% to 70% of normal income, to a monthly maximum |
| Group life insurance | A lump sum to your beneficiaries if you die | A multiple of salary or a flat amount, with optional extra cover you pay for |
| Employee Assistance Program (EAP) | Short-term counselling and referral services | Paid by the employer, free to use |
| Health Spending Account (HSA) | Eligible medical expenses, from a dollar credit | An annual credit set by the employer |
| Wellness Spending Account (WSA) | Fitness, wellness and lifestyle items | An annual credit; a taxable benefit |
The two spending accounts work differently from insured cover. The health spending account guide explains how an HSA pays medical costs your plan leaves over, and the comparison of HSA vs WSA covers why wellness money is taxed. Some employers let you choose your own mix of these with flex credits, as the guide to flexible benefits plans explains.
Extended Health Care: How Limits Work
Extended health pays a share of each eligible claim, and most services also have a dollar maximum per year (or per visit, or per two years for vision). The three made-up plans below show how much those settings can differ; your plan booklet lists the real figures.
| Service | Basic plan | Mid-range plan | Rich plan |
|---|---|---|---|
| Prescription drugs | 80%, $5,000/yr | 85%, $10,000/yr | 90%, no maximum |
| Physiotherapy | $300/yr | $600/yr | $1,000/yr |
| Massage therapy | Not covered | $400/yr | $750/yr |
| Psychologist or psychotherapist | Not covered | $1,000/yr | $2,000/yr |
| Vision care | $150 every 24 months | $250 every 24 months | $300 every 24 months |
| Hearing aids | $500 lifetime | $1,000 every 5 years | $2,000 every 5 years |
| Annual deductible | $50 | $25 | None |
Two plan features matter as much as the limits:
- Drug formulary. An open formulary covers most prescription drugs; a managed formulary covers only drugs on the plan’s list, or pays less for brand names when a generic exists.
- Out-of-country cover. Emergency medical cover while travelling usually has a trip-length limit and conditions for pre-existing conditions, which matter if you rely on it instead of buying travel insurance.
Dental Coverage: Classes of Service
Dental plans group services into classes and pay a different percentage for each, usually most for preventive work and least for major work.
| Class | What’s usually included | How plans usually treat it |
|---|---|---|
| Preventive | Exams, cleanings, X-rays, fluoride | The highest percentage |
| Basic | Fillings, extractions, root canals, denture repairs | A slightly lower percentage |
| Major | Crowns, bridges, dentures, implants | A lower percentage, or not covered |
| Orthodontics | Braces, usually for children | Often a lifetime maximum per person; not in every plan |
| Annual maximum | All classes combined (except orthodontics) | A dollar cap per person per year |
Plans pay up to the amount they allow for each procedure, so a dentist who charges more than that leaves you paying the difference.
Disability Coverage
Short-term disability covers the first weeks or months off work; long-term disability starts when STD (or the waiting period) ends and can continue for years.
| Feature | Short-Term Disability (STD) | Long-Term Disability (LTD) |
|---|---|---|
| When it starts | After a short waiting period, or from day 1 for an accident or hospital stay in some plans | After STD ends or the plan’s waiting period |
| How long it lasts | Typically up to 6 months | Often to age 65, subject to the plan’s definition of disability |
| Benefit | A percentage of weekly pay | Most plans replace 60% to 70% of normal income, to a monthly maximum |
| Definition of disability | Unable to do your own job | Often your own job for the first 2 years, then any job you’re reasonably suited for |
Whether LTD payments are taxed depends on who paid the premium: employer-paid premiums make the benefits taxable, employee-paid premiums make them tax-free. The guide to tax on long-term disability benefits covers cost-shared plans and how the income is reported. If the group plan isn’t enough, or you’re between jobs, the disability insurance guide explains individual policies. Without STD cover, EI sickness benefits may fill the first gap; see the guide to EI sickness benefits.
Group Life Insurance
Group life pays a set amount to your beneficiaries if you die while covered, usually a multiple of salary, with optional extra cover you can buy through the plan. It is convenient, but it is tied to the job and often smaller than a family’s actual need. The guide to life insurance through your employer covers how much cover plans give, naming beneficiaries and what happens when you leave.
Unlike health and dental cover, employer-paid group term life premiums are a taxable benefit, included in your employment income on the T4; the guide to whether group life insurance is taxable shows how the amount is worked out. Employer health and dental premiums, by contrast, aren’t taxed federally, as the guide to tax on employer health and dental plans explains.
Judging a Job Offer’s Benefits
Benefits are part of total pay, and two offers with the same salary can differ widely in what the benefits are worth. Questions worth asking:
| Factor | What to ask | Why it matters |
|---|---|---|
| Premium split | What share does the employer pay, and what comes off my pay? | Employer-paid cover is worth more to you |
| Who pays the LTD premium | Employer or employee? | It decides whether LTD benefits are taxed if you ever claim |
| Paramedical limits | Annual maximums for physiotherapy, massage, psychology? | Low maximums cover only a few visits |
| Drug coverage | Open or managed formulary? | A managed formulary may not cover a drug you take |
| Major dental | Are crowns and bridges covered, and at what percentage? | Major work is the costliest dental care |
| Waiting period | Do benefits start on day 1 or after a probation period? | You’re uncovered until they start |
| Out-of-country cover | Trip length, pre-existing conditions? | Affects whether you need separate travel insurance |
| Life insurance | How much, and can it be converted when you leave? | Matters for estate planning and if you change jobs |
| Spending accounts | Is there an HSA or WSA, and how much? | An HSA pays medical costs tax-free; a WSA is taxed |
| Retirement savings | Is there a group RRSP match, DPSP or pension? | Employer contributions add to your total pay |
On the retirement side, how employer RRSP matching works covers match formulas; the employer’s contributions to a group RRSP are taxable income offset by the RRSP deduction, as the guide to tax on an employer RRSP match explains, and some employers use a deferred profit sharing plan instead (see group RRSP vs DPSP).
Group vs Individual Coverage
Group cover generally costs you less than buying the same protection yourself, because the employer often pays part or all of the premium and the insurer prices the whole group together rather than each applicant. The guide to individual health insurance covers the options if you don’t have a workplace plan.
When Two Plans or a Job Change Are Involved
If you and a spouse both have workplace plans, the coordination of benefits rules let you claim the unpaid part of an expense from the second plan. If an employer changes or cuts your plan, when your employer changes your benefits covers what the law says about that change. When you leave a job, cover usually ends quickly, and the guide to continuing benefits after leaving a job covers conversion windows and a spouse’s plan.
Related Articles
Sources
The figures and rules on this page come from these sources, last checked against them on September 25, 2026. How we check facts.
- Financial Consumer Agency of Canada: Disability insurance