Offering group health benefits to employees is a key factor in attracting and retaining top talent. Knowing that their family members are also covered under the same plan adds peace of mind for employees. Understanding the ins and outs of covering dependants can help ensure your benefits package is comprehensive and efficient.
1. Who Qualifies as a Dependent?
In Canada, most group health insurance plans recognize spouses (legally married and common-law) and children as dependents. A dependent child typically refers to a biological, adopted, or stepchild who lives with and relies on the employee for financial support. Most plans cover children until they turn 18 or 21, with many extending this to age 25 or 26 if they are full-time students. Disabled adult children may also remain on the plan past the standard age limit, provided they meet specific criteria, such as being unable to live independently.
2. Adding and Removing Dependents
Changes in personal circumstances often necessitate adding or removing dependents from your plan. These changes, known as qualifying life events, include getting married, having a child, or losing a spouse’s coverage. It’s important to act quickly—most insurance carriers require you to update your plan within 31 days of the event to ensure coverage without the need for medical evidence. Delaying the addition of a dependent beyond this period may result in additional steps, such as proving the individual’s health status, which can complicate the process.
3. Maximizing Coverage with Coordination of Benefits
When both spouses have separate group health insurance plans, you can often coordinate benefits between the two plans. One plan will act as the primary coverage, and the other will serve as secondary, potentially covering what the primary plan doesn’t. This coordination allows dependents to access maximum coverage and can significantly reduce out-of-pocket expenses.
4. Extended Coverage for Post-Secondary Students
Many plans allow children to remain on their parents’ insurance if they are full-time students, typically until age 25 or 26. However, insurance carriers usually require proof of enrollment each academic year. Coverage can lapse if this proof isn’t provided, often without notice, leading to declined claims. It’s crucial to stay on top of these requirements to avoid unexpected gaps in coverage.
5. Handling Coverage for Ex-Spouses and New Relationships
Managing benefits for dependents can become complicated after a divorce. In some cases, employees may be legally obligated to continue providing medical coverage for an ex-spouse, making adding a new spouse to the plan difficult. Since most group insurance plans only allow one spouse to be listed, some individuals may need to explore additional coverage options or pay for an ex-spouse’s medical expenses out-of-pocket.
6. What Benefits Are Available to Dependents?
Dependents typically have access to a range of benefits under a group plan, which may include:
- Health care: This covers medical services, prescription drugs, and paramedical treatments like physiotherapy.
- Dental care: Routine and emergency dental services are often covered, a crucial benefit for families.
- Vision care: Eye exams, glasses, and contact lenses are common inclusions.
- Employee Assistance Programs (EAPs): Mental health support, counseling, and wellness resources are often extended to dependents.
Some plans also provide additional coverage options, such as health spending accounts (HSA) or diagnostic and specialist access insurance, which may be valuable for dependents with ongoing health needs.
Strengthening Your Benefits Program for Dependents
Understanding how dependents are covered under group health plans can help business owners design more attractive and comprehensive benefits packages. By staying informed about the rules for adding dependents, coordinating coverage between spouses, and maintaining extended coverage for students or disabled adult children, you can ensure that your employees and their families are well-supported.
