Plan Design

Designing an employee benefits plan involves more than choosing a list of benefits. A group benefits plan is only as good as the decisions behind it. The coverage you offer, the cost-sharing you build in, the rules around eligibility and enrolment, all of it shapes what employees actually experience when they need care and what you pay at renewal.

Our section Plan Design covers the moving parts of a Canadian group benefits plan so you can build something that works for both the business and the people on it:

Getting started

If you’re setting up a plan for the first time or rebuilding one that’s outgrown your team, start here:

• Designing a Scalable Group Benefits Plan: A six-step framework for SMEs that want a plan capable of growing from 5 employees to 50 without needing to be torn apart and rebuilt every couple of years.
• Small Business Benefits Packages: What’s available for smaller teams, what it typically costs, and how to get coverage in place without overcomplicating things.
• How to Budget: Setting realistic numbers before you shop for quotes, including how to model costs as headcount changes.
• Employee Benefits Costs: What Canadian employers actually spend on group benefits, and what drives those numbers up or down over time.

Plan structure and coverage

The core of plan design is deciding what’s covered, how much, and under what conditions, including:

• Extended Health Care: What extended health covers beyond provincial insurance, including prescriptions, paramedical, medical equipment, travel, and how plans are typically structured.
• Private Health Services Plans: The tax framework that makes group health benefits tax-free for employees and deductible for employers. Understanding PHSPs matters because it’s what determines whether your plan’s tax treatment holds up.
• Modular vs. Flex Benefits Plans: Two approaches to giving employees choice within a plan. Modular offers pre-set tiers; flex lets employees allocate credits across categories. Each comes with different administrative demands.
• Pooled Benefits Plans: How pooled risk arrangements work for smaller groups, and when it makes sense to stay pooled versus moving to experience-rated pricing.

Cost-sharing mechanics

These are the levers that determine how claims get split between the plan and the employee, and they interact with each other in ways that aren’t always obvious:

• Choose the Right Deductible: Annual versus per-prescription structures, how deductible levels affect premiums, and a step-by-step process for picking the right amount.
• Co-Insurance vs. Co-Pay: One is a percentage, the other is a flat fee. They produce different outcomes depending on claim size, and most Canadian plans use both across different benefit lines.
• Reasonable and Customary Limits: The price ceiling insurers apply before co-insurance even kicks in. This is the most common reason employees get surprised by a lower-than-expected reimbursement, especially on paramedical services and dental work.
• Annual Maximums: How per-category and per-year caps work, what happens when employees exhaust them mid-year, and how claim patterns against maximums affect your renewal.

Eligibility and enrolment

The rules that determine who gets on the plan, when, and what happens if they don’t:

• Waiting Periods: How to choose the right waiting period length based on turnover, workforce demographics, and competitive positioning. Includes class-based design for different employee groups.
• Late Applicants: What happens when someone misses the 31-day enrolment window, including dental caps, medical underwriting, possible denial, and why this is also an employer liability issue.
• Non-Evidence Maximum: The dollar threshold above which the insurer requires medical evidence before approving coverage. Matters most for higher earners on life, disability, and critical illness lines.

Retention and long-term planning

• How Benefits Reduce Turnover: The connection between plan quality and employee retention, and where benefits sit in the broader compensation picture.