News: Benefit Facts
by Brian Bulger

Prescription Drugs And Your Group Benefit Plan

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In recent years prescription drug trend factors (inflation and pricing) have come down in Ontario and some other provinces. This is due to the implementation of generic drug price reforms that were legislated by Provincial Governments and were phased in over a 3 to 4 year period of time in several provinces. A second reason these decreases have been realized is the patent expiry of some extensively prescribed high cost drugs. One such drug was Lipitor and it is used to treat people with high levels of cholesterol.

The savings from these factors somewhat cloaked the rising costs associated with increased use of specialty medications in the marketplace. There have been a small number of high priced prescription drugs introduced over the years and the number of these drugs is steadily increasing. I have read that 60% of drugs currently in development are specialty medications and their medicinal application is targeting conditions common to larger segments of the population such as Baby Boomers and seniors.

For example, a relatively new drug called Solvaldi/Harvoni is being used for the treatment of Hepatitis C. It supposedly has a 90% cure rate and the cost can vary from $35,000 to $100,000 per treatment. With an estimated 250,000 plus Canadians with Hepatitis C, the costs multiply quickly. One of my firm clients had an employee who was treated with Solvaldi last year at a cost of $115,000 and the treatment was not successful.

Invokana is another new medication being prescribed for the treatment of diabetes and it is fifteen times more expensive than current options. When you consider the large number of Canadians being treated for diabetes these therapies put significant pressures on the prescription drug component of all benefit plans.

Although there is nothing wrong with paying more for potentially better health outcomes, the question is, who will pay?

To help control affordability and availability of quality drug therapies, many of the Chambers Plan's health care options use the Telus Health National Formulary - a large evolving list of prescription drugs that qualify for insurance coverage. This ensures coverage and accessibility to safe, cost-effective and quality drug therapies. The formulary provides a credible process for determining drugs eligible under the Plan. At the same time it ensures health outcomes are not compromised while managing the costs of the drug component of your Plan.

The Chambers of Commerce Group Insurance Plan is constantly exploring ideas and features that can be incorporated into the Plan to face this and other challenges. And my office can offer you proven strategies to protect the drug coverage and premium costs for your organization.

Working Past Age 65? Group Benefits Are Still an Option

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If age 65 is just another birthday to you, and not a cause for retirement, remember the Chambers of Commerce Group Insurance Plan wishes you all the best - and offers you the best in group benefits for you and your small business.

More and more people are choosing to work past age 65. Whether continuing a job, or active in a second career, more Canadians are working into what was previously considered retirement years.

It used to be that a person couldn't get group benefits past age 65, and you certainly couldn't start a group insurance plan after age 65. As more Canadians embrace "unretirement," working past the traditional retirement age for economic reasons or because they enjoy working and keeping busy, those old rules are changing.

With the Chambers of Commerce Group Insurance Plan you can apply for employee benefits once your business has been in operation for six months. Each Chambers Plan policy is a custom program and coverage for employees age 65 and older can include the following benefits:

• Emergency Medical Travel with pre-existing health conditions included.
• Health care, including prescription drugs, ambulance and semi-private hospital.
• Life Insurance up to age 74.
• Dependent Life Insurance for spouses and dependent children.
• Dental Benefits.
• Best Doctors - access to worldwide medical specialists for diagnostic and treatment planning services.
• Preferred Vision eyewear and hearing devise purchase discounts, and a Health Access telephone line offering information on health, nutrition and regional resources.
• Employee Assistance Plan (EAP) counselling services for confidential help dealing with personal issues.
• Business Assistance Services (BAS), providing owners access to legal, accounting and human resources services six hours per year.

A person must apply for benefits before their 75th birthday and the Life, EAP, BAS and access to Best Doctors terminate on the April 1st anniversary date following the Plan participant's 75th birthday. All other benefits end at age 80.

After 2 years with coverage, Business Owners and Executives can acquire the Chambers Plan's Retiree Plan upon retirement or if working less than 20 hours per week. It provides comprehensive health and dental and includes Emergency Medical Travel with pre-existing conditions.

New Retiree Plans for Owners and Principles

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For many people in Canada, retiring means the end of group health and dental coverage. While provincial health plans cover some health care expenses, many day-to-day and emergency expenses will now be your own responsibility.

In January 2014 the Johnston Group Inc., the administrators of the Chambers of Commerce Group Insurance Plan, introduced a Retiree Plan for the owners and principles of insured firms. This new plan will allow key employees to easily transition their group plan coverage to an individual health and dental plan that has no termination age.

This comprehensive well priced plan includes Out-of-Province/Country Medical Emergency Health Care Benefits for individuals; even for those with pre-existing health conditions. Protection is provided for you and your dependents for an unlimited number of trips per year to a maximum duration of either 90, 120 or 180 days per trip. Insured individuals who are under age 75 require that their pre-existing health conditions be stable for 90 days prior to departure, and for those who are age 75 and older their pre-existing health conditions must be stable for 180 days prior to departure.

There are three plans to choose from, all of which include generous coverage for Paramedical Services (Chiropractic, Physiotherapy, Massage & etc), Semi-private Hospital, Orthotics, Ambulance, Nursing Care, Hearing Aids, Medical Supplies, Equipment and Appliances. Two plans include Basic and Major Dental Services and there are two Prescription Drug options available as well.

Rates are based on your province of residence and two age group categories; individuals who are under age 75 and those who are over age 75. There are Single, Couple and Family rates and premiums are payable monthly.

Making claims is easy as drug cards are provided to those who choose prescription coverage. Dental claims can be electronically submitted and participants can request to have their claim reimbursements deposited directly into their personal bank accounts.

To be eligible for coverage individuals must have been employed with their company for the last five years prior to retirement as an owner, principle or executive; and must have been insured on their firm's Chambers of Commerce Group Insurance Plan or Maximum Benefit Plan for two years prior to retirement. Dependent children are eligible for coverage up to age 21, and will be extended to age 25 for full-time students.

There are no medical statements required as the coverage is guaranteed. Benefits will begin the 1st of the month following the date of application. Simply apply for and purchase the coverage within 60 days following the date of your retirement. If you are replacing your Chambers Group Plan for the Retiree Plan the transition requires to take place on the same day.

I am not aware of any other conversion plan in Canada that compares to this Retiree Plan. If retirement is something that you wish to do in the next 5 to 10 years, don't delay, contact me now for a current brochure and rates. Even if your firm has a group policy with a market other than the Chambers of Commerce Plan I recommend that you investigate the Retiree Plan at your earliest opportunity. As my father Victor used to say, "It's too late to sharpen the swords when the drums of war have beaten."

A Helping Hand With Business Assistance Services

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According to Statistics Canada, the failure rate for small businesses in Canada is alarmingly high. While 85 per cent make it through their first year of business, only 51 per cent survive through year five.

Small business owners know that they can use some help, with two-thirds wanting help with financial planning or tax payments and over half wanting to learn more about cash flow, as reported by the 2012 Sage North America's financial literacy survey. The survey of 300 also revealed three quarters of owners do their own invoicing and over half of owners do their own payroll and accounting.

Expert opinions can be expensive, and most small businesses cannot afford to have a full-time accounting specialist on hand to solve financial issues and offer advice on how to manage company finances.

That's where the Chambers of Commerce Group Insurance Plan's Business Assistance Service (BAS) can help. BAS is a confidential service that provides up to six hours of access to professional accounting, legal and human resource experts who understand the challenges small business owners face.

The Chambers Plan BAS is a free service built into every Chambers Plan benefit program. Owners simply contact BAS by telephone or email, and a trained specialist will ask some basic questions to determine which services will best resolve the issue. A counselling appointment will then be arranged for the owner with a Certified Accountant, Certified General Accountant, professional Lawyer or a Human Resource Specialist.

Advice from a professional enables owners and managers to strengthen management and control functions through expert counsel. BAS can help owners obtain the answers and recommendations to solve business accounting challenges, make informed compliance decisions and resolve employee issues. And all at no cost; a part of every Chambers Plan package.

One-on-one consultation is often financially out of reach for many businesses, but with the Chambers Plan BAS, owners have access to expert advisors able to help their business grow.

The Purpose of a Benefit Eligibility Waiting Period For New Employees

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Most if not all group benefit plans require new employees to satisfy a waiting period before becoming eligible for benefits. Firms can waive the waiting period for employees and often do if they wish to hire a key employee who is coming from a firm with benefits and doesn't wish to have a lapse in their coverage. Firms will also do this for people who are employed in a contract or part time position and then hired as a full-time employee. I quite often see waiting periods getting waived when a business owner hires a family member.

Insurance companies require a letter of direction to accompany the application of an employee who is having their waiting period waived.

The length of the waiting period is commonly tied to an employer's probationary period. The most popular waiting period with most of my firm clients is 3 months. The duration of the waiting period can vary from one benefit to another just as it can vary from one employer to another, but in most cases all coverages go into effect on the same date.

Other waiting periods used are 6 and 12 months. Firms who have higher than usual employee turnovers, such as the trucking and hotel industries regularly choose these longer waiting periods.

The main purpose of a waiting period is because it helps to minimize unnecessary recordkeeping and administrative expenses. And too, it eliminates higher claim costs that are associated with employees who are only employed for short periods of time.

It's very important to submit a new employee's application for benefits on or before the end of the waiting period, otherwise they will be considered Late Entrants and be required to provide medical evidence for themselves and their family members for all and any coverage. And believe me, you don't want to go there!

What OHIP Covers When We're Travelling Outside of Ontario

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I recently heard about a retired couple from Ontario who required to be transported by helicopter to a hospital after a serious car accident while they were vacationing in British Columbia. Due to the fact that they were non-residents of that Province and didn't purchase Emergency Medical Travel Insurance for their trip they were personally responsible for the $25,000 air ambulance bill. What a nightmare!

I can't remember who mentioned the story to me and I didn't read the article myself, but the fact is ambulance and transportation services to hospitals are not covered by OHIP when we are anywhere in the world outside of Ontario. There is a cost for us in Ontario too, but it is considerably subsidized by the Province. I wonder how many people actually know this?

If you go to the Ontario Ministry of Health's website you will find that all provinces and territories participate in a federal-provincial reciprocal hospital billing agreement to enable insured residents of Canada to receive insured outpatient and inpatient hospital services in publicly-funded hospitals. They do advise however, to verify that the treating hospital participates in the agreement.

Reimbursement is based on OHIP rates or the amount billed if it's less, and that the OHIP rate may be less than the amount charged.

With the exception of renal dialysis services, OHIP does not cover payments to private hospitals and facilities within Canada. Services provided by Chiropractors, Optometrists, Podiatrists, Osteopaths and Quebec Physicians are not covered. Additional services that are not covered include experimental treatments for research or study, cosmetic surgery, home care, prescription drugs and as mentioned above ambulance services.

When travelling outside of Canada OHIP will pay a maximum of $50 (Canadian) for all emergency outpatient services on any one day, $200 per day for inpatient services, $400 per day for emergency inpatient hospital treatment and $210 per day for outpatient dialysis services.

Treatments and services must be for emergencies, be medically necessary, performed at a licenced hospital and or health facility, be rendered in relation to an illness, disease, condition or injury that is acute and unexpected, arose outside of Canada and requires immediate treatment.

OHIP's provisions are intended and designed to provide a very limited amount of funding for out-of-province/country medical treatment, and their website strongly and repeatedly advises it's readers to purchase additional and adequate health insurance every time we leave Ontario. And as my office is contacted at least once per year by clients who have been hospitalized in a foreign country because they have suffered an unforeseen illness, I can only agree that travelling without the proper coverage may be the biggest gamble we could ever take.

Does Your Firm Have A Need For A Wellness Program?

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A Wellness Program may seem like a superficial benefit to a business owner who keeps a watchful eye on their firm's overhead and expenses, but there are very good reasons for an employer to consider implementing one.

Employee absenteeism due to life-style related illnesses is quite common today and costs Canadian businesses significant money in lost production. I have read that hypertension, lung cancer and adult-onset diabetes accounts for as much as 90% of health care costs in Canada.

According to a Statistics Canada study physical inactivity also impacts health care costs as fewer Canadians are taking part in physical exercise that provides cardiovascular benefit.

Canada's aging population, coupled with longer life expectancy means that there are increasingly more employees susceptible to suffer from ailments such as back and joint problems, repetitive strain injuries and disabilities associated with premature cardiovascular disease.

With new technologies and the down-sizing of businesses in order to remain competitive, the fear of layoffs, concerns about job security, hiring freezes and financial well being are causes of increased stress and anxiety by employees who must carry heavier work loads. Disability claims and drugs prescribed for the treatment of stress and anxiety increase at a precarious rate every year.

As costs for prescription drugs increase faster than the rate of inflation and provincial governments continue to reduce funding of health care services, thereby shifting medical costs to private benefit plans, employers will continue to pick up the costs through higher premiums.

Case studies indicate that employers who introduce Wellness Programs that encourage regular fitness and exercise will benefit by reduced absenteeism and employees with more positive attitudes. Other components of Wellness Programs include nutrition and weight management, back care and repetitive strain injury prevention, stress management, smoking cessation and health education. To implement a successful program three steps need to be taken; 1. Conduct a workplace health audit, 2. Conduct an employee health audit and 3. Develop a strategic plan.

I would agree that there is a direct link between an employee's mental and physical well-being and job performance. Of course it would be ideal to have an in-house gym at work, but organizing a daily 20 minute brisk walk during the lunch hour can easily be done with no start-up costs and in a very short period of time could pay big dividends.

How to Fight Against Benefits Fraud

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An employee benefit plan is an important investment in your company's future and the last thing you want is to have it eroded by benefits fraud.

Benefits fraud happens when information is intentionally withheld or misinformation is provided to ensure a claim is paid. It can be committed by anyone with access to your personal information and can include creating inflated or fictitious claims, or simply misrepresenting the treatments received. Benefits fraud can even raise the cost of your program beyond the point of affordablility.

Although the Chambers of Commerce Group Insurance Plan has a number of processes in place to flag and investigate potential benefits fraud, there are also measures that you, as an employer, can take. Here are a few steps that you can ask your employees to do to protect themselves against fraud:

• Encourage your employees to review their benefit claims prior to submission to ensure the services identified are the services they received. Also, ensure that all receipts submitted reflect the accurate dates and payments of the services received.
• Remind your employees to never sign a blank claim form and not to allow their signature to be kept on file at a benefit providers office. By signing forms, they are confirming their authorization and consent, as well as verifying the accuracy of the information in the claim being submitted.
• Request employees report any incidences of providers offering to alter claim information to meet your claiming requirements.
• Remind your employees to protect their personal information, including their firm and certificate numbers, by keeping it in a safe place at all times.

Fraud can lead to significant losses to a benefit plan and it's in all of our best interests to work together to minimize and prevent it from happening.

Another Great Reason To Acquire the Chambers Group Plan For Your Firm

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While some insurance companies are looking to reduce the termination age for coverage for participants insured with their group benefit plans, the Chambers of Commerce Group Insurance Plan is increasing their termination age from 75 to 80 effective April 1st, 2012.

Whether it's out of necessity or the enjoyment of being active in a business atmosphere, more and more people are working beyond age 65; I find that this is especially so for small business owners. I therefore know for a fact that this extention of coverage will be well received by a growing number of working people in Ontario and right across Canada.

In the coming years the Provincial Health Plans will no doubt continue to reduce their services so the benefit of having coverage for semi-private and convalesant hospital, ground and air ambulance, home nursing care and medical equipment and applicances, well past age 65 when we're likely to need it most, will be greatly appreciated by those who are practical and well informed. Paramedical services provided by Chiropractors, Massage Therapists, Physiotherapists, Naturopaths, Podiatrists and quite a number of other valuable services will continue to be included.

Out-of-Country Medical Emergency insurance is a much desired coverage for many people 65 years and older. After all, the older we get the more costly it is to purchase medical travel coverage on an individual basis. People over age 65 are at a much greater risk of having a medical emergency while away on vacation or business, especially those who have a pre-existing health condition.

I'm in no rush to get older but when I'm 65 I too hope to head south each Winter to get a break from the miserable weather and all the inconveniences that can go with it.

As of April 1st insureds up to age 64 can enjoy 180 days of continuous Out-of-Country coverage. 65 - 69 year olds will be covered for 90 days, 70 - 74 year olds will be insured for 60 days and people 75 and older will be provided with coverage for 30 days.

It's my understanding that the people at the Chambers Plan are presently working on an out-of-country emergency medical top up coverage that they hope to make available later this year. Emergency Medical Coverage is also important to have when travelling to other Provinces.

An Employer's Obligation to their Employees

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Once an employer has a benefit plan in place for their firm they are obligated to inform their insurer whenever their employee's earnings change. The purpose of keeping employee's earnings current is to ensure that their disability coverage stays current. Failure to do so could be a costly mistake for any employer, because if an employee becomes disabled and they receive less disability income than what they are eligible for, the employer could be held responsible by the employee for the shortfall.

In January of every year, the Administrators of the Chambers of Commerce Group Insurance Plan mail a form called the Annual Firm Update to each and every firm who is insured on the Plan. The form provides a list of all of the employees who participate in a firm's benefit plan as well as each person's gross monthly earnings. It also shows the dates of birth of each participant, asks if there has been any changes to anyone's earnings and provides a place to show everyone's current earnings.

The reason this form is sent out in January each year is because many firms use December 31st as their year end. Therefore, for many employees January is a time for raises and other income adjustments.

Most other group benefit insurers use the annual renewal date of their firm clients group plan to remind clients to update their employee's earnings.

As an increase in income will provide a higher level of disability coverage, many employees will be asked to provide medical evidence for proof of their good health. It's typical for an insurance company to request eligible employees to complete and submit health statements for underwriting. Additional questionnaires and a visit by a Nurse for further medical information may also be required.

Employees don't have to apply for the excess disability coverage if for some reason they don't wish to, as it's their choice. Not wanting to pay the additional premium cost or having a pre-existing health condition that would cause them to be declined the excess coverage are two reasons that come to mind why an employee may not want to apply.

A firm can and should notify their insurer of changes to the earnings of their employees right when they take place. And I further recommend to my firm clients to retain documents as proof of their actions.

Coverage and Claim Payments for Separated & Divorced Individuals

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Throughout the year I receive a good number of calls and emails from insured individuals who have recently separated from their spouses and they wish to terminate their ex-partners from their benefit plan. Conversely, I receive an almost equal number of calls from ex-spouses who are distraught because they have had their coverage terminated. As the frequency of these types of calls have increased lately I thought it might be appropriate to write about these issues.

Although an insured employee can request to terminate their dependents from their coverage any time they wish, I recommend to people to leave their ex-spouse's coverage in place until they have a separation agreement in place. I think if you were to call a Lawyer that specializes in Family Law they would provide this same advice. As "Family" premium rates for health and dental is the same regardless of the number of family members insured, there is no difference in the cost to keep an ex-spouse insured when children are being covered too.

With the Chambers of Commerce Group Insurance Plan a separated ex-dependent can still be an eligible dependent under the Plan. Even in the case of a divorce, the ex-dependent would be recognized as an eligible dependent if the courts rule that the Certificate holder is liable to continue coverage for the former spouse.

Looking at the Policy Contract that one of my firm clients has who is insured with RBC Insurance, I see that they define "Spouse" as a person who is living with the employee and who is legally married or who has resided with the employee for at least 12 months in a conjugal-like relationship or any other formal union defined and recognized by law.

I recall a couple of years ago that an employee of one of my firm clients terminated their ex-spouse from his coverage and was later ordered by the court to reinstate his ex-spouse's coverage. Regardless, a court cannot order something which is contrary to the policy itself. So, if a group plan only permits coverage while the parties are married and residing together there is nothing a court can do to order otherwise. It can however, provide that an individual is to maintain substitute insurance which would be obtained privately if available. That is a situation that could turn into a terrible burden for anyone and well worth avoiding.

Another related issue I receive calls about is from ex-spouses who are not receiving their claim reimbursements, because the insurance companies are sending their cheques to their ex-partner, the insured Certificate holder, who is pocketing the money.

A solution for ex-spouses who are in this position is to make arrangements with your service providers to bill the Chambers Plan directly. In cases where the court has ruled that a Certificate holder is liable to continue coverage for their ex-spouse the Chambers Plan will make claim payments directly to the ex-spouse.

Permanent Life Insurance Premiums Are Facing Significant Increases

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Individual permanent life insurance premiums are expected to increase by as much as 30% in the upcoming months. One major Canadian insurance company has announced that they are increasing their rates on October 15th and of course others will soon follow.

There are two factors that make these premium rate increases necessary and might actually threaten the long term sustainability of these products. The first is that bond yields have decreased substantially in the last ten years. Life insurance companies in Canada invest the premium money they receive from permanent policyholders in safe assets like bonds. While bond yields in the year 2000 were 6.3% they are now almost 50% less at 3.3% and they're expected to stay low into the foreseeable future.

The second factor is that the Canadian insurance industry is going to be obliged to adopt new international accounting standards that require them to put more capital into their business. The primary reason for this is because strong price and benefit guarantees are included in most permanent products that Canadian consumers currently enjoy.

Broadly defined life insurance products can be broken into two categories; term and permanent. Initially term insurance is a very inexpensive product. It's easy to understand and provides a benefit for a set period of time; The most popular being ten or twenty years. One of the main drawbacks of term insurance is that for most people the coverage expires before you die. Therefore, even though you will pay premiums for a long period of time your estate or beneficiaries won't receive any benefit. Further, as you get older, the price of term insurance increases dramatically and often makes it unfeasible for you to continue to keep the coverage.

Permanent insurance on the other hand, will provide you with a guaranteed amount of coverage for your entire life. It provides you with an opportunity for a guaranteed cost with a payment period of your choosing. It's an excellent financial protection product and estate planning tool. Whole Life and Universal Life are permanent life insurance products.

I recommend that you contact a Life Insurance Broker as soon as possible to discuss your particular circumstances to see if permanent life insurance is right for you now or in the near future. And due to pricing differences be sure to speak to more than one or two Advisors to ensure that you get the best product and premium available. Premiums will never be lower than right now, so don't delay.

Certainty in Uncertain Times

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The economic world is changing all around us. Businesses large and small are looking at their operations and trying to navigate through uncertain waters. This means looking at all aspects of their operations and searching for ways to reduce costs - from capital expenditures, to labour costs and even employee benefits.

Employee benefits can be viewed as a cost in the short-term or as an investment in your company's future success. Employee benefits are an important tool for employers to attract and retain the best employees. Although the current economic pressures have affected individuals across the country, long term projections still show a shortage of skilled workers in the future.

Employee benefits should be viewed as an investment in employee engagement and retention. Your employees are your most important asset, and an engaged and healthy workforce is a key component to any firm's future success.

Even giants of industry struggle with the issue of providing benefits for their employees. According to the New York Times, Wal-Mart's benefit costs have risen by 15% per year on average since 2002.

Your Chambers of Commerce Group Insurance Plan is available exclusively through your membership in your local Chamber of Commerce or Board of Trade. For over 35 years, the Chambers Plan has provided affordable and competitive benefit plans to businesses like yours all across Canada. Your financial concerns are understood and the renewal rates for participating firm's have averaged less than 5% a year over the past 5 years.

The need to satisfy the needs of many employee groups in your organization is also well understood. Young Generation Y employees (born after 1980) want their employers to be interested in them and their good health. Generation X employees (born 1965 - 1980) have competing responsibilities - working on their careers, raising a family and perhaps contributing toward the care of elderly parents. And Baby Boomers (born 1964 and earlier) have started to focus on health issues as they grapple with the effects of aging.

Whether it's covering prescription drugs for Baby Boomers, having Best Doctors or Employee Assistance Programs available for Generation Xs, or the services of a Massage Therapist or Dietician for the Generation Yer's, the Chambers Plan's goal is to give you and your employees security and peace of mind.

If you want to achieve certainty in uncertain times think Chambers of Commerce Group Benefit Plan for you and your employees.

Group Life Insurance Should Be Just One Part Of Your Over All Life Insurance Coverage

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If there's one thing I'm passionate about it's Life Insurance. One of the reasons for this is because two to three times per year on average I have the duty of delivering life claim cheques to the beneficiaries of recently deceased participants of the more than 325 firms that I provide group insurance plans to. This may sound like a rather unpleasant job, but it's actually quite gratifying to be able to be of some help at such a sorrowful time. I've been doing this for more than 25 years and someone made the remark to me a number of years ago, "That I'm the only one who meets with the family with money in hand, whereas all the other key people involved are looking to get paid for their services."

Besides the passing of the insured person, what I find distressing is the fact that most of the time the deceased person has little or no other life insurance in place and has not made sufficient provisions to enable their family to continue with their present life-style. Some families are left down right destitute, because the deceased person was the main income earner, they had debt and like many people they didn't have an emergency fund and lived from paycheque to paycheque. It's therefore not uncommon for people left in this position to have to sell their home and even file for personal bankruptcy; What a horrid position to be left in.

Having a shortfall of life insurance, by the way, exists with people from all walks of life and all levels of income, and based on my experiences there's a high probability that you may be one of them.

Most benefit plans today provide a minimum amount of life insurance coverage for the employees, which could be $15,000 to $30,000 or in some cases an amount equal to one year's income. As you know, in today's world that's not a lot of money. And when you consider that the cost for final expenses is $12,000 to $15,000 that doesn't leave surviving family members with much money to face the future with.

When purchasing life insurance you should keep in mind that the amount of coverage should pay for your final expenses, outstanding debts and the replacement of future earnings!

Calculating your life insurance requirements involves comparing your debts and other liabilities to your assets, as well as setting goals for what you want your policy to achieve. A Life Insurance Broker/Agent will help you make the calculations and explain your options at no cost to you. There are between 40 to 50 leading life insurance companies operating in Ontario. The difference in premium costs among these companies for the exact same product can be considerable, so I strongly recommend calling a minimum of two Brokers when making inquiries. Also, if you have a spouse make sure that you're both fully involved when shopping for your coverage. And lastly, don't make the mistake of putting it off. We're all going to bite the biscuit one day; We just don't know when.

Ontario's HST, Your Group Benefit Plan and My Rant

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On July 1, 2010, the Ontario Provincial Government, in conjunction with the Federal Government, implemented a single 13% Harmonized Sales Tax (HST). HST will, for the most part, replace Ontario's current 8% Retail Sales Tax (RST) and the 5% Federal Goods & Services Tax (GST). This new single sales tax will be administered by the Federal Government and will be applicable on goods and services purchased in Ontario.

Despite this transition to a 13% single sales tax, Ontario has stated their intention to retain the existing RST on insurance at 8%, so for group insurance billings nothing will change. Firms will continue to be charged 8% Ontario RST and the levy will continue to be a non-refundable tax.

Firms that utilize Cost Plus as part of their Plan will see a slight change. The 8% RST will continue to apply to the claim amount and will be non-refundable as it is now. For the Administration Fee however, it appears an exemption will be provided for the 8% RST, and instead, the 13% HST will apply; Thankfully this is a very modest increase. Based on my understanding of the proposed legislation, some businesses will be entitled to recover this 13% HST as an input tax credit. This is a slight benefit to some, since previously, only the 5% GST was recoverable.

You may recall that it was Bob Rae's NDP Ontario Government that first applied tax to insurance in 1993. When they announced it's implementation, I remember thinking, how rotten can they get. Responsible people buy insurance so that they won't be a liability to the Province and they're now going to be penalized for it. Unfortunately, at the time Canada was in a recession and Bob and his crew were convinced that Ontario could spend their way out of it. The tax on insurance was a huge cash cow and was going to save the day. It might have worked, but the concept of reduced spending and paying down the debt with the additional millions coming in was somehow elusive to them.

For many small business owners in Ontario, myself included, the HST is another unwelcome and excessive tax that will provide no direct benefit to my business what-so-ever. It will push many business owner's marginal tax rate ever closer to 50% and will act as a disincentive to business growth. After all, why would anyone consider working any harder than they absolutely need to when 47% to 50% of their income is being taken away by taxes.

The ones who are benefiting the most financially from this additional tax are the Provincial Liberals, the Federal Conservatives and the underground economy. But what do I know, our elected representatives at Queens Park in Toronto and at the Parliament Buildings in Ottawa have such terrific business acumen and histories of unparalleled successful money management that I must surely be wrong.

Employees Looking For Long Term Relationships with Employers

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Uncertainty in the economy has changed the way Canadians are looking at their jobs, according to a study by Towers Watson, a global professional services company. In the past, the survey indicated that Canadians viewed themselves as "free agents", switching from employers on a regular basis. These days, Canadians are looking for enduring relationships with employers, seeking to work for just one or two companies over a lifetime.

According to Towers Watson, almost 8 out of 10 employees (77%) indicated they wanted to remain with their current employer for the long term, with 43 per cent saying they wanted to work for the same company for their entire career, and 34 per cent wanted to work for no more than two or three companies.

The move towards long term loyalty should be welcomed by employers, however employees expect that employers will reciprocate their loyalty. The key concern of employees is the availability of learning and development opportunities. Employees are looking for their employers to be partners in their development and in fact, according to the study, career opportunity is the number one reason to remain working for an employer. The potential to grow within an organization is also one of the top reasons to join a company, along with pay, vacation and health benefits.

Knowing what employees want from their employers can assist you in enticing the best people to join your business, and help you to ensure that your current employees remain with the company.

Other tips to help keep employees with your company are:

• Listen to employee concerns - keeping an open dialogue gives them a stake in the business's success.
• Share your vision - discuss long-term plans and how the employees fit into your plans.
• Get to know your employees - learn what motivates them.
• Invest in training - support your employees with growth opportunities.
• Pay your employees what they're worth - not getting paid fairly is a major reason employees seek other jobs.

Cuba Forces Tourists to Buy Medical Insurance

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Over the past couple of months I have received a number of calls from a good number of people who have booked vacations to countries with much warmer climates than Canada, the lucky dogs. They have all wanted to confirm that they have the necessary medical emergency coverage in place for the duration of their trips and that no other supplementary coverage is required.

I have reminded them all that the Chambers of Commerce Group Insurance Plan provides unlimited medical emergency coverage; That being worldwide medical care for an unexpected medical emergency, for an unlimited period of travel time. I also point out it's important to have this coverage even when we travel to another Province within Canada.

Some are travelling to Cuba and have been told by their Travel Agents that they now require to provide written evidence of Travel Medical Health Insurance upon their arrival. Furthermore, if they cannot provide proof of coverage they will require to purchase a local Cuban insurance product for the length of their stay. Although I am not aware of the cost of the local insurance, I imagine Cuba is doing this because of a drain on their medical resources imposed by past vacationers who have required medical treatment.

According to a communique I received from the Chambers Plan in April 2010, effective May 1, 2010, the Cuban Government began imposing this medical insurance requirements on all visitors to their country. We have therefore been providing to our clients the following information and paperwork for their trips to Cuba.

1. A letter from the insurer which provides their policy and certificate numbers, the name of the insured as well as the names of their insured family members who are travelling with them, their date(s) of birth and written confirmation of their coverage during the specified dates of their visit.

2. We also recommend that they take along a copy of their Benefit Booklet with their enclosed Certificate of Insurance, their wallet size Summary ID Card and a Voyage Assistance Brochure/Claim Form which provides further details of their Travel Medical Emergency Coverage

To date, none of our clients have had to utilize their Travel Medical Coverage while vacationing in Cuba, and although we're confident that their medical needs would be taken care of, we hope their good fortune continues.

New Enrollments and the Late Entrant Provision

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In most cases firms with benefit plans in place have a 3 month waiting period before new employees are eligible for coverage for themselves and their dependents/family members. If a firm is in an industry that has a high employee turnover rate, they may be better suited to a 6 month waiting period; this can be arranged with many insurers. Firms can also choose to waive the waiting period for key employees if they wish or need to do so.

All new, full-time employees require to complete their portion of an Employee Application when they join a firm. The signed and completed application must be received by the insurer within 120 days of the date full-time employment began.

It's a good idea to have a system in place so that this process does not get overlooked. Failure to add an eligible employee to your firm's benefit plan within the above mentioned time period will cause that person to be a Late Entrant. Medical evidence of insurability will be required for the employee and their dependents and no coverage will be provided until they are all underwritten.

If such an employee and or their dependents have a a pre-existing medical condition they could be excluded coverage for their present medical treatments and drug requirements, or be declined coverage altogether. Also, rather than having the usual $1,000 - $1,500 per calendar year of dental coverage for each family member, Late Entrants are subject to just a $250 dental benefit maximum during the first 12 months of coverage.

The Late Entrant Provision was created to stop employees from jumping on and off their employer's benefit plan whenever they need something covered. To allow such a thing to happen would ultimately have an adverse affect on the cost of the benefit plan. It's purpose is to protect the insurer, the employer and all the employees who participate and share in the cost of the benefit plan.

The Late Entrant provision also applies to insured employees who get married, give birth or adopt children. In these cases the employee has 30 days in which to submit an Employee Change Form with all the pertinent information.

Common-law couples require to add their spouses as a dependent to their benefit plan when they have co-habitated for a period of one year. This particular situation should be confirmed as it is not always the standard unless the firm has specifically requested it.

Let me tell you, when a firm causes a new employee to become a Late Entrant it usually spoils any chance of creating a good working relationship with that individual. Having the dental coverage reduced is bad enough, but when someone's coverage is declined it's like trying to repair a wound that just won't heal.

Disability Insurance - Who Needs It?

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If you're a business owner or a full-time employed individual, you need disability insurance. Quite often I meet people who say that they don't require disability insurance because they are covered under their spouse's benefit plan. In this case, they may be covered for Extended Health Care and Dental benefits, but not for disability. I explain to them that disability is for income replacement based on their own earnings at their own place of work. It simply cannot be acquired by them through their spouse's plan.

The three typical sources where a person can acquire disability coverage are; 1. An individual disability policy, 2. An association group individual disability policy or 3. A group benefit plan. I have read that 95% of the people who have disability insurance in North America, do so with an employer's group benefit plan. The cost of disability insurance through a group benefit plan can be 50% less or better than an individual disability policy. It's really the best deal, if you want to look at it in those terms, out of any other coverage provided within a group benefit plan.

To many people, myself included, disability is the most important coverage provided within a group benefit plan. Think about it, although it's great to have dental coverage in place, if you're unable to work for 12 months or more due to a disability and you have no money coming in, what good will dental coverage do. If you are single and living on your own with no other means of support it's even more important to have disability coverage.

Every year or two I spot articles in different insurance publications which provide the statistics on disability in Canada. More than once in these related articles I have read that 1 in 3 Canadians are off work during our working lifetimes due to a disability. And every time I see those figures, 1 in 3, I think wow, that can't be right, that's a lot of people.

On the other hand though, in regards to my firm clients there is a constant average of 8 to 10 business owners and employees who are off work due to a variety of illnesses and injuries, who are either collecting disability income or applying for it. I can tell you, most of these unfortunate people lead healthy life-styles and never thought that they would be in the position they're in now.

Now, a funny thing happens when I talk to people about disability insurance. Almost everyone thinks that the main causes of disabilities are accidents and injuries. The fact of the matter is, 9 out of every 10 disabilities my clients experience are due to unforeseen illnesses. I suspect my experiences are very similar across the country. And in case you're wondering, the national average for the length of time a person is off work due to a disability is just under 12 months.

If you presently don't have disability insurance, don't despair, you are far from being alone. In fact, the company you are in includes Doctors and Lawyers and many others who are top income earners. The very ones who you would automatically think would be crazy not to have it, and can afford it more than most, are some of the best procrastinators I've ever met.

It's a no brainer to me, so of course I have disability insurance. As you can imagine, I'm sold on it everyday I come to work. Remember, like many types of insurance, you buy disability with your good health. If you wait until you have a problem, you'll be out of luck.

Couple Rates for Health and Dental Options: They're Smart and they Save Firms Money

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A few years ago the Chambers of Commerce Group Insurance Plan introduced a third marital status to their benefit program. In addition to the Single and Family rates, which are the industry standard, they created a Couple rate for a number of their health and dental coverage options.

The Couple rate is available to employees who require health and dental coverage for themselves and an adult partner, and also to employees who are single parents with any number of children.

When you consider that Baby Boomers make up approximately 30% of the work force and many of them are now empty nesters, the introduction of Couple rates is perfectly timed. I'm not sure if the number of single parent families are growing but I find that their numbers are also significant today.

Not only is this a more equitable way of providing benefits to insured firms, it is also current with the times and can save considerable money for firms and their employees. When I compare the premium costs between the two statuses within the Chambers Plan the Couple health rates are a little better than 23% less than the Family health rates. The Couple dental rates are even better at close to 30% less than Family rates.

Family health and dental rates are priced for families with three or more members. So if your firm has employees who require coverage for only themselves and their spouse, you're paying more than your fair share for them to your group insurance provider. Take a moment right now and consider how many of your present employees would qualify for Couple rates. For each one of them your firm could save between $800 to $1,000 per year on average for their combined health and dental coverage.

Creating a Couple status for health and dental rates is just one of many reasons why the Chambers of Commerce Group Insurance Plan is the largest insurer of group benefits for small businesses in Canada. Due to being well received the number of health and dental options that offer Couple rates is being expanded upon over the next few months.

The Importance of Beneficiary Designations

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For many benefit plan participants, naming a beneficiary for the life insurance portion of their firm's group insurance plan is something that's done at the time of enrollment and then it's pretty much forgotten.

Not only is it quite important to designate a beneficiary, it's something that should be reviewed from time to time, as it could provide protection to the insurance funds as well as to the assets of the insured person's family.

When a person dies, having a designated beneficiary will ensure that the life insurance funds are paid directly to the beneficiary, whether it's an individual, a number of people or an organization. It provides quick access to funds that might be needed for funeral costs and other important immediate financial needs.

Some people simply name their Estate as their beneficiary as they don't feel it's of much importance or they think it's the right thing to do. And when there is no signed and dated beneficiary designation, the insurance settlement is usually made to a person's Estate. The Estate's assets normally cannot be distributed until the proper process has been followed. This usually means that the Will ( if there is a Will ) may need to be probated ( which involves legal fees ) and final tax returns may need to be prepared for the deceased as well.

When a life insurance settlement is paid to a named beneficiary rather than to the Estate, the insurance money is protected from seizure by any creditors the deceased may have had.

Plan sponsors and administrators should remind their employees about the importance of designating a beneficiary and to inform the insurer if and when their wishes change. A change in marital status, for example, is a time to reconsider one's beneficiary designation. I am quite sure that there are thousands of separated and divorced people in Canada who have overlooked changing their beneficiaries; Talk about having an unexpected surprise.

People need to put some time and thought into their choice of beneficiaries. Although it may seem like a nice thing to do naming a girlfriend or nephew as a beneficiary, it is neither practical nor fair if the people who would be responsible to pay for a deceased family member's final expenses weren't left any money to pay the bills.

Finally, a person can designate a beneficiary Revocable or Irrevocable on some group benefit plans. A revocable beneficiary allows the insured person to change their beneficiary anytime they wish providing they submit a request in writing to the insurer. If however an irrevocable beneficiary is designated, the insured person will require a written consent from the irrevocable beneficiary in order to make a change. And if a minor is named irrevocable their consent may be impossible to obtain. You can bet that that holds true for many ex-spouses too.

The Non-Evidence Maximum Benefit and What it Guarantees

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The Non-Evidence Maximum (NEM) is the maximum limit of coverage available to employees within a group benefit plan without the need to provide medical evidence of insurability. It is a design of benefit plans that pertains to the Life and Disability coverages.

Many of the insurance companies who underwrite group insurance in Canada require firm clients to have a minimum of five or more employees in order to be eligible for a group benefit plan. All the participants of the policy may be guaranteed the Extended Health Coverage and Dental options chosen by the firm, regardless of any pre-existing medical conditions.

The guaranteed NEM an employee would have for Life insurance with a 5 - 9 person firm could be as much as $150,000 and $2,000 for their monthly Long Term Disability (LTD) coverage. Insurance companies will offer to increase a firm client's NEMs over time, however a firm can decline such an offer if they wish. The larger the firm the higher the NEM limits that are offered.

Many firms today "cap" their employee's life insurance coverage at $25,000 to $30,000, and when this happens the NEM for their Life insurance becomes an non-issue. The vast majority of insured firms today do not cap their LTD coverage and so it is with the disability coverage where the NEM can be a concern.

For example, if a firm had an LTD NEM of $2,000, and the percentage payable to their disabled employees was 67% of gross monthly earnings, anyone earning $3,000 per month or more would require to provide medical evidence of good health in order to acquire coverage for the excess LTD coverage; The amount over and above the guaranteed $2,000. This can pose a real problem for the presidents, owners and other higher income earners if they cannot pass a medical.

And be aware that when a firm moves their benefit plan from one insurance company to another, the higher income earners may require to provide medical evidence for the excess Life and LTD coverage if the new insurer won't grandfather the present limits of coverage.

You should also know that there is a clause written into most group plans, that any amount paid by the employer to a disabled employee will be deducted from the amount paid in benefits by the insurer. So topping up an insured's disability benefit is technically not allowed. I don't doubt that a few Policyholders have ignored this clause by not telling their insurance company and risked the rare chance that their insurer may retain their right to audit the firm's payroll records.

The Chambers of Commerce Group Insurance Plan will insure firms with 1 - 100 employees. Their guaranteed NEM for firms with 3 - 4 employees is $25,000 for Life and $1,200 per month for the LTD. With 5 - 9 employee firms it's $150,000 Life and $2,000 for the LTD. Their NEMs are higher for larger firms.

How to Avoid Claim Delays with your Group Benefit Plan

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Every month I receive a number of calls from business owners and employees who are experiencing delays and difficulties with claims that they have submitted. No matter who the insurance company is the reasons for the delays are almost always the same.

The majority of the delays are for health and dental claims, where most of the claims take place, however some delays for life and disability claims sometimes occur too. The following is a list of the main reasons why delays happen:

• Claim Forms are missing information and are not completed correctly.
• Claim Forms are submitted without a signature or are signed by someone other than the insured Employee.
• The original receipts are not submitted with the claim forms.
• Paramedical credentials are not indicated on the receipts.
• A Doctor's referral is not provided with insured Paramedical Service claims.
• The Dentist's office sends the claim form to the wrong insurance company.
• Dependent Students age 21 - 25 do not provide their school information on their dental claim forms.

By communicating the following information and solutions to your employees you can eliminate most if not all of your firm's claim delays:

• Suggest to employees to take a few minutes to read their claim forms twice; once before filling out their forms and again while completing them.
• Confirm with employees that it is they who require to sign their claim forms.
• & 4. Insurance companies want the original copies of the bills issued by Chiropractors and other paramedical service providers to validate each claim. Original receipts provide the credentials of the service provider. Visa and Bank Card chits will not do.
• Clinical Dieticians offer a paramedical service that most insurers require a Doctor's referral (prescription), for the first visit and also if there is a six month lapse between appointments. They must be dated prior to the treatment date(s).
• Participating employees and their spouses are provided with Summary ID Cards and Benefit Booklets. The insuring company and the address where claims require to be sent are on the cards and in the booklets. Be sure that everyone's Dentist is presented with this information.
• 21 - 25 year old students are considered Over-Age Dependents. There is an area on Dental Claim Forms where they require to provide the name of the College or University they are attending. The student or the insured employee need to remember to include this information on their claim forms.

Why not make this article a communique to your employees? If it helps one person, it's one less time consuming problem to deal with in your future.

When A Deal Isn't A Good Deal

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As a small business owner, you won't have many experiences worse than offering group benefits to your employees one year, then finding you can't afford the plan the next year. It happens more than you would think, and it's generally due to two common mistakes.

It happens when a business owner chooses an insurer and their plan based on a remarkably low premium. Some insurers try to attract customers by offering 'too good to be true' or especially low introductory premium rates at application time.

It also happens when an Agent recommends a plush benefit plan to a small firm. As premium rates are affected by claims experience ( usage ) a small firm doesn't generate enough premium to pay for the higher claims made with such plans. The fact of the matter is, even firms with 100 - 1,000 employees can no longer afford to provide their employees with a 'Cadillac' type benefit plan today.

When firms face 20% to 40% premium increases in year two, many business owners have little choice but to terminate their benefit plans. Who knows maybe the insurers hope inertia will keep customers from cancelling their coverage.

The Chambers of Commerce Group Insurance Plan and it's Agents take a different approach. We aim for stable competitive pricing and recommend a customized program that includes a sustainable premium for years to come. Although there are numerous options for every type of coverage I personally promote firms to consider 'Chev' type plans to ensure this goal.

As a small business owner, your company will appreciate the advantages of budgeting for the more predictable premiums the Chambers Plan delivers. Most of our benefits are pooled, which simply means claims are averaged across participants to keep coverage affordable. And too, it's a non-profit program that doesn't require to make a profit for any shareholders.

So, if you find that last year's or this year's 'great deal' isn't so great after all, try a different approach with the Chambers Plan. You'll get competitive prices today, the flexibility to build a custom program for your firm and guaranteed renewable coverage for years to come.

Using Cost Plus Can Save A Firm Hundreds of Dollars Per Year

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Employees who have group benefit coverages through their spouse's employer's plan have the option to opt out of the Extended Health and Dental coverages with their firm's plan if they wish to do so. These employees would then be insured for all other coverages such as Life, Long Term Disability (LTD) and Dependent Life, if they were provided.

When an employee is required to pay 50% of the premium, which is much the norm today, and their spouse's plan provides more comprehensive coverage this would be a logical thing to do. It would also make good financial sense to have the spouse who has the higher earnings to be the one to carry these coverages, or the spouse who receives their coverage at no cost because it's part of their employment package.

Employees can co-ordinate benefits with their spouse's benefit plan in order to top up any shortfalls with their own employer's plan. So if each person has 80% Basic Dental coverage for example, it is one way for them and their family to receive 100% coverage.

At times when employees wish to co-ordinate benefits I recommend my firm clients to inquire as to what these employee's main concerns are and what the amount of money is that they plan to save by being able to co-ordinate benefits. The reason for this is because it could very well make more sense to reimburse these employees the difference through the Cost Plus Program rather then having them co-ordinate benefits.

To give an example, a few months ago I was contacted by a client of mine who explained that one of his employees wanted to add the Health and Dental back on to her coverage because her spouse had changed jobs and his new coverage is not as comprehensive as his previous benefit plan. He asked me to speak with this employee in order to explain what forms and information was required to initiate this process.

After talking with this employee for a short period of time I found out that she was mainly concerned about a $200 annual shortfall that her and her spouse would now realize due to the recent reduction in her spouse's dental benefits. I in turn explained that it was going to cost both her and her employer $1,200 a year each to add the Health and Dental coverage back on to her plan. We all agreed that paying out $2,400 in premium order to save $200 a year didn't make any sense at all.

I recommended to my client that he utilize the Cost Plus Program, that is available with the Chambers Plan, to reimburse this employee her out-of-pocket dental expenses as it arises each year. They readily agreed and who wouldn't. After all the firm saves approximately $1,000 per year, the employee saves $1,200, it's considered a business expense similar to a premium payment and it's not considered a taxable benefit to the employee.

In this particular case the co-ordination of benefits was going to be complicated as well, because the employee would have been considered a Late Entrant for not applying for the health and dental when her coverage first began. This however is another topic for another time.

The Importance of Guarantees With Group Benefit Plans

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When you look at benefit plan options, most firms want a minimum of exclusions and a maximum number of guarantees. Some plans are particularly hard on small firms; rejecting many industry types, companies less than one or two years old, firms with too few employees, non-profit organizations and or in the case of family businesses where more than 50% of the staff are related. Benefit plans like these are also unlikely to offer guaranteed renewable coverage.

Solid product features, like reasonable entry requirements and coverage guarantees, not only make coverage more valuable to you, they tell you a lot about the organization you will be dealing with. When you compare the cost of various benefit plans, you should also take into account the value of each plan's rules and guarantees.

The Chambers of Commerce Group Insurance Plan not only provides these guarantees, but it also guarantees that firms with one to nine employees cannot be targeted for a premium increase based on your own firm's claims experience. This is really significant for a small firm!

The Chambers Plan is structured to provincially " pool " the claims of all of it's one to nine person firms with all other similar size insured firms. Health and Dental premiums are adjusted each year upon the April 1st renewal based on the overall claims experience of all the insured one to nine person firms. Like all benefit plans inflation also has an effect on the cost, as well as the increasing ages of the participating employees in regards to the life and disability premium rates.

The fact that the Chambers Plan is a non-profit plan, and therefore doesn't require to make a profit for any shareholders, is a big factor in it's ability to keep premiums stable. This latter point assists the plan in providing attractive benefit plans to larger firms with ten plus employees too.

It is my opinion, that because the claims experience for firms with fewer than 25 employees is so very volatile, and the Chambers Plan guarantees to; 1. Not target one to nine person firms for premium increases based on their own claims experience and 2. Not terminate any size firm for excessive claims, makes the Chambers Plan with their very stable premium rates, the #1 benefit plan available to small firms in Canada today.

Taxation of Benefit Plans is a Bad Idea

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Currently, it is only the cost of the Life insurance that is a taxable benefit within a group benefit plan. Premiums paid by an employer on behalf of it's employees for Long Term Disability (LTD), Extended Health Care and Dental benefits are not included in employee income as taxable benefits. (Note: If a firm pays any portion of an employee's LTD premium the disability income itself will be taxable upon receipt to the employee.)

This issue continues to be brought up by successive governments as a possible additional source of tax revenue. Obviously and to no surprise, the bureaucrats and politicians who bring up this subject do not have an understanding of how these benefits are funded.

Insurance companies take a big portion of the premium dollars as "retention". As the retention is up to 35% of the premium, that means insurance companies will only pay 65 cents back on the dollar, on average, to their insured groups without putting up the rates.

In short, the 35% represents the cost for administration, claims, profit and an amount put into a reserve for protection against big claims.

If employer contributions were considered as taxable income to employees, participating in a group plan would make little financial sense to employees. First of all, employees usually pay 50% of the total premium with after tax dollars, so to treat the employer's portion as a taxable benefit, when a plan loses up to 35% to the insurance company in retention costs, there would be no savings or benefits to employees. Employees who don't make regular claims would no doubt reconsider their options and want to opt out of the coverage completely.

The conclusion has to be that taxing employer contributions to premiums, and thereby eliminating their tax effectiveness, would put an end to group benefit plans as they exist today. This would leave thousands of Canadians exposed to the high medical costs related to the treatment of numerous illnesses and injuries. And too, as the majority of people who actually have LTD coverage in Canada, receive it through an employer's benefit plan, the financial consequences would be an additional burden of horrendous proportions to the uninsured families and eventually, who else, but the taxpayers of Canada.

Smart Parents Study Student Benefit Coverages

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If a student in your family is enrolling in a school outside your home province, make sure you understand how the move will affect his or her health insurance - under both OHIP and your firm's group benefit plan. If they're studying in another country, it's even more critical because private plans do not typically cover students attending foreign schools.

Students who attend college or university in another province are covered when their parents are insured with the Chambers Of Commerce Group Insurance Plan. However, OHIP needs to be contacted in order to acquire a formal extension of coverage well before the school year begins.

Before your student leaves home, you should also take a few minutes to review your group plan's full eligibility requirements for dependent students. Your plan may require the child carry a minimum course load to qualify as a full time student. Many benefit plans extend coverage for students from age 21 to 25, but this too should be confirmed with the insurer.

The Chambers Plan simply requires receipt of an Employee Change Request form from insured employees to confirm that their children are age 21 to 25 and are a full-time student. The form will confirm the name and date of birth of the employee's dependent.

Most benefit plans do not provide medical coverage for students who enroll in a school in another country. However, in some cases a dependent student could be covered while in route to and from the foreign country if they have plans to do some sight-seeing prior to and after their course ends.

If your child is heading off to college or university in September, now is the time to do your homework to ensure they will be covered.

Short-Term Disability

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For business owners and self employed people who require income right away, and who don't have other sources of immediate income, Short-Term Disability (STD) can help save the day.

STD insurance, often referred to as Weekly Indemnity (WI), is a group insurance benefit that offers replacement income for up to 104 weeks. The usual payment periods acquired are either for a maximum of 15 or 17 weeks. These particular periods are used to coincide with the maximum sick-leave period payable under Employment Insurance (EI). This is called EI integration.

The typical amounts payable to a disabled employee with STD range from 50% to 75% of gross weekly earnings. The most common is 60% to 66.67%. If a firm has WSIB it may be possible to set up their STD to pay only if employees become disabled away from work and reduce their insurance costs.

The definition of disability for STD is usually Any Occupation. In other words a person cannot be able to do "any" occupation due to their disability to be eligible.

Benefits can begin on the 1st, 8th, 15th, 31st and 61st day. The longer the waiting period, the lower the premiums will be. One of the more costly options would be a 1-8-17 week plan, meaning that the benefit payments begin on the first day of accident, the eighth day of sickness and continue for 17 weeks. A more popular option is 15-15; 15 day wait, payable for 15 weeks.

I find that most firms today do not include STD within their benefit plans. The simple reason a firm wouldn't, is because most employees are eligible for the sick-leave benefit through EI. After a two week waiting period EI will pay 55% of a disabled employee's weekly earnings, to a maximum of $447 per week for 15 weeks.

A firm can decide on the maximum benefit that their STD will pay. It's important to consider, because a low maximum benefit will greatly affect the higher income earners in a firm. For example, if a plan is set up to pay 66.67% of weekly earnings with a maximum benefit of $500, employees earning more than $675 per week will have a shortfall in coverage.

If a firm has STD in place they can receive an EI rate reduction on their employer payment portion so long as their STD coverage matches or is better than the EI sick-leave benefit.

The most cost effective way to provide STD to employees is to use EI, and if necessary consider topping up the EI sick-leave payments for anyone who experiences a shortfall.

Price Isn't Everything, Not By A Long Shot

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Traditionally, Group Benefit Insurance Plans are " experienced rated." What this means is insurance companies sets each firm's premiums based on each firm's own employee's claims experience. Other factors that affect premiums are administration and expense charges, inflation and marketplace changes like government health plan cutbacks.

With these types of plans the insurance company has the right to increase the premiums without limit, or decline to renew your coverage entirely. This is especially a risk for small businesses where, if just one employee or insured family member has a serious accident or illness, health claims can skyrocket.

To protect your employees and company from this uncertainty, look for a " pooled plan " where premiums are set for a large number of employers under one umbrella. Pooled plans will offer you more stable, predictable premiums.

This past summer I was contacted by and assisted two small firms who's benefit plans were not renewed by their insurers due to continuously high health claims. These firms experienced considerable increases to their health premiums during their plan's previous two renewals because they each had one employee who's state of health had changed and they required costly drugs and other medical necessities.

These firms were quite upset because after faithfully paying their premiums for many years their plans were not renewed by the insurers at a time when it was most needed.

They were taken by surprise because they were totally unaware that this could even happen. Another thing that both of these firms had in common was that they had purchased their coverage based on the fact that they offered the lowest priced plan at the time of purchase.

The Chambers of Commerce Group Insurance Plan is the largest pooled plan for small businesses in Canada. It guarantees against termination of coverage, so long as the premiums are paid and your firm is a paid up member of a local Chamber of Commerce or Board of Trade. It may not be the lowest priced plan for every single firm, but if your firm is struck with high claims, this particular guarantee will be priceless.

Home Based Business?

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Join the crowd!

If you run a home-based business, chances are you're part of the fastest growing segment of the economy. And, chances are your resume includes a previous job with a larger employer; where you enjoyed a wide range of group benefits.

If you've been in operation for at least six months, you can apply for the same kind of benefits again, under your Chamber of Commerce Group Benefit Insurance Plan. They recognize that "small business", including home-based firms, is a vital part of today's business environment. Traditionally, smaller firms haven't been well served by group insurers and that's why the Chamber Plan was developed more than 30 years ago.

Today, the plan serves more than 27,000 firms nationally, from one person operations to firms with up to 100 employees, and it offers a full range of benefits. It can provide Life, Disability, Extended Health with drugs, Dental, and Vision Care coverages. There is also a Cost Plus Program, Business Overhead Expense, and a Group RRSP Program.

For more information visit to the Chamber of Commerce Group Insurance Plan website.

Presently there are 50 leading life insurance companies in Canada that provide individual Life and Disability Insurance. I have a continuously updated computer software program which provides every company's premium costs for all of their life products. After inputting a clients personal information, one of the functions it can do is rank every company's rates from lowest to highest cost. Comparisons show that premiums can range as much as 150% from the least to most expensive of any one policy product. It pays to have a Broker who can shop for you!

Taxation in the Area of Group Benefits in Ontario

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At the present time premiums paid by an employer for a group insurance plan, for any and all coverages, is a business expense and tax deductible by the business. Prior to 1998 a business required to be incorporated in order to be eligible to do this but this is no longer the case.

Generally, employees pay for their share of coverage with after-tax dollars. Their share of premium is not tax deductible by the employees for any benefit, with one exception. When an employee who pays premiums into a "taxable" group disability policy receives claim payments, they can deduct the amount of premiums paid from the claim amount when determining income tax for the year claim payments are received. Also, should an employee's total health care expenses, including group health and dental premiums, in a particular tax year either equal $1,614, or exceed 3 percent of net income, then those premiums may be considered as a tax deduction.

A "taxable" group disability policy (either weekly indemnity/short term disability or long term disability) is one in which the employer pays any portion of the disability premium even if it's just one cent per year. Canada Revenue Agency allows a disability benefit to be "non-taxable" when received, if employees pay 100% of the premium for that benefit. It is possible to set up a non-taxable short term disability benefit and a taxable long term disability benefit or vice versa.

Employer contributions to group life insurance premiums for an employee are considered a taxable benefit to the employee. Prior to the Conservative Government's Federal 1994 Budget, Canadians were allowed up to $25,000 group life coverage as a non-taxable benefit.

When a life insurance claim payment is made to an employee's beneficiary the life benefit amount is tax free money. There is however tax payable on the interest earned by the life insurance proceeds after the date of death.

Interestingly, an employer is allowed to pay up to $10,000 as a death benefit to an employee's family outside the group insurance plan as it is allowed as a deduction by Canada Revenue Agency. The amount paid to the family is treated as a life insurance benefit, and as such, is not taxable upon receipt. Employers may also deduct expenses incurred and claims paid out under self-insured group plans.

Extended Health Care and Dental benefits are not included in employee income as taxable benefits unless there isn't a contracted plan, an insured plan or a union agreement in place.

GST is payable on Broker consulting fees only and PST was applied to group benefit plan premiums in 1993 by the NDP Government. The Ontario Government assess a "hidden" tax on all group insurance premiums. It's called hidden because most people are not aware it exists. The charge in Ontario is 2%, is built into the premium and paid to the Government by the insurance companies. (This hidden tax is not applicable to the health and dental premiums provided by non-profit benefit plan providers, such as the Chambers of Commerce Group Insurance Plan.)

Are My Prescriptions Covered?

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As government programs change their benefits, often reducing the coverage, it's more important than ever to understand how your group insurance plan can provide a financial safety net - especially when it comes to prescription drugs.

All group health plans base their benefits on a list of eligible drugs called a formulary. Most insurance companies have several formularies available. This allows employers to choose from comprehensive plans that cover most prescription drugs to more restrictive plans where only certain types of drugs are covered.

Some group plans even let the employer add or remove specific drugs to control coverage and cost. For example, smoking cessation or erectile dysfunction drugs may be covered under some plans but not under others. These particular coverages are costly items to include in a firm's benefit plan by the way.

If a firm opts for the most comprehensive plan, one that includes all medications with a DIN (Drug Identification Number), your plan will allow reimbursement for over 10,000 items. Such plan are not common today because of the very high cost. Today's more typically chosen formularies would cover drugs which, by law, require a prescription; approximately 8,300 items.

"Managed Formularies" are popular today as they have cost containment features. For example, these programs may pay for generic drugs, but not the additional cost of brand name versions. Some group plans use a provincial drug listing which cover between 3,500 and 7,500 items. Privately developed formularies, such as Emergis "National Formulary", cover between 6,200 and 6,700 DIN designated items.

Whichever formulary you choose, keep in mind that medications may have multiple DINs. That's the case with a 200 mg tablet, a 400 mg tablet and a 400 mg time-released capsule, all with the same active ingredient. With some formularies the 400 mg tablet may be covered while the time-released capsule might not.

Too many choices? Your Chambers Plan Agent can help you select the right formulary for your firm's needs.

The Chambers Group Insurance Plan Has Been A Successful Mission

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The Chambers Group Insurance Plan is overseen by the Chamber Insurance Corporation of Canada (CICC). Their board consists of two representatives from each participating region of the country; One member being a permanent Chamber staff person, and the other being a volunteer member. As a board they ensure the Plan is being operated to the best interests of the Chamber members across Canada. Their mission is to provide a competitively priced comprehensive group insurance benefit plan available to all participating Chamber members and their employees.

Since the inception of the Plan in 1970 the day to day operations have been managed by Johnston Group Inc., located in Winnipeg. They specialize in the administration of group plans for large corporations and organizations and all that this service entails. They have been named as one of Canada's 50 Best Managed Private Companies for seven consecutive years.

Over the last year more than 4,000 new businesses chose to acquire their group benefits with the Chambers of Commerce Group Insurance Plan. Equally important, 92.5% of existing insured firm members chose to renew their current Chambers Plan coverage; A very strong sign of overall satisfaction with the product offering.

As of April 1, 2008, there was $213,416,643.00 of in force annual premium and 27,257 insured firms providing coverage to 109,846 employees and their family members. For the 12 month period preceding the above date, 268 Life claims were paid, in addition to 1,149 Disability claims, 1,097,930 Extended Health claims and 288,313 Dental claims were paid.

Health and dental claims are settled within 24 - 48 hours of their receipt by the Chambers Plan Claim Departments, and employees can have their claim payments deposited directly into their personal bank accounts if they so wish.

The Management at Johnston Group Inc., meet with their Agents twice per year to review all aspects of the Plan and to request advice and suggestions on how to improve the Chamber Plan's service and coverage offerings. To my knowledge no other group benefit market in Canada is similarly supportive and committed to their clients and Agents.

The Board of Directors also meet twice per year to ensure the Plan remains financially sound and competitive, and to review the many new options, benefits and enhancements that are introduced every year.

A coast to coast network of very fortunate Advisors/Agents, of which I am one, work closely with local Chambers to market the Plan and service participating firms. Chambers and Boards of Trade receive an administration fee for endorsing the Plan to it's members.

A benefit plan is an excellent recruitment and retention tool for all sized businesses. If you're thinking about acquiring coverage for yourself or firm be sure to get quotations and solutions with the Chambers Plan, the most progressive provider of group benefits to small firms in Canada.

Choices, Choices, Choices: How Do You Know Who To Go To For Your Firm's Group Benefit Plan Needs?

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Almost 24 million Canadians are protected today by one or more life and health industry products. These coverages have been acquired from the 100 plus life and health insurance companies who are licensed to operate in Canada.

Out of approximately 116,000 people who work to deliver these insurance products and services more than 50,000 are full-time employees and Agents, with close to another 64,000 Independent Agents and Brokers, working coast to coast.

So the question is, how do you know who to go to for your firm's group benefit plan needs? As you look for a Group Benefit Plan Carrier, Agent or Broker keep these four things in mind.

First, decide what's more important to you, the insuring company or the person you will be dealing with? Insurance Agents who work exclusively for one company have extensive knowledge of one insurer's products. If you have comfort in dealing with a particular Agent or his/her market, it may be the way to go. On the other hand, an Independent Agent or Broker who has access to numerous markets may satisfy your need to compare a number of different companies and what benefit packages they have to offer.

Second, don't let an Agent or Broker start "selling" you a plan. Make sure your firm's needs and objectives are thoroughly understood, and that the Agent/Broker works with you to find the best coverage and plan design that will provide a sustainable premium.

Third, as in any business, on-going "service" is very important. Will the Agent or Broker be able to assist you quickly and efficiently upon request. Will your claims be paid promptly? Ask as many people as possible who you know who have group benefit plans in place for their recommendations.

Fourth and last, inquire about the Agent or Broker's experience, the number of markets they have access to and do business with and how many firm clients do they presently have. If you were considering taking a flight to a far away destination tomorrow wouldn't you want to have a Pilot who has flown the route five hundred times rather than one who is just making his fifteenth trip?

Your group benefit plan provides protection to your business's most important asset - you and your employees. Take the time to find the best possible solution for your firm.

Using Cost Plus Instead of Co-ordinating Benefits Can Save A Firm Hundreds of Dollars Per Year

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Employees who have group benefit coverages through their spouse's employer's plan have the option to opt out of the Extended Health and Dental coverages with their firm's plan if they wish to do so. These employees would then be insured for all other coverages such as Life, Long Term Disability (LTD) and Dependent Life, if they were provided.

When an employee is required to pay 50% of the premium, which is much the norm today, and their spouse's plan provides more comprehensive coverage this would be a logical thing to do. It would also make good financial sense to have the spouse who has the higher earnings to be the one to carry these coverages, or the spouse who receives their coverage at no cost because it's part of their employment package.

Employees can co-ordinate benefits with their spouse's benefit plan in order to top up any shortfalls with their own employer's plan. So if each person has 80% Basic Dental coverage for example, it is one way for them and their family to receive 100% coverage.

At times when employees wish to co-ordinate benefits I recommend my firm clients to inquire as to what these employee's main concerns are and what the amount of money is that they plan to save by being able to co-ordinate benefits. The reason for this is because it could very well make more sense to reimburse these employees the difference through the Cost Plus Program rather then having them co-ordinate benefits.

To give an example, a few months ago I was contacted by a client of mine who explained that one of his employees wanted to add the Health and Dental back on to her coverage because her spouse had changed jobs and his new coverage is not as comprehensive as his previous benefit plan. He asked me to speak with this employee in order to explain what forms and information was required to initiate this process.

After talking with this employee for a short period of time I found out that she was mainly concerned about a $200 annual shortfall that her and her spouse would now realize due to the recent reduction in her spouse's dental benefits. I in turn explained that it was going to cost both her and her employer $1,200 a year each to add the Health and Dental coverage back on to her plan. We all agreed that paying out $2,400 in premium order to save $200 a year didn't make any sense at all.

I recommended to my client that he utilize the Cost Plus Program, that is available with the Chambers Plan, to reimburse this employee her out-of-pocket dental expenses as it arises each year. They readily agreed and who wouldn't. After all the firm saves approximately $1,000 per year, the employee saves $1,200, it's considered a business expense similar to a premium payment, it's not considered a taxable benefit to the employee.

In this particular case the co-ordination of benefits was going to be complicated as well, because the employee would have been considered a Late Entrant for not applying for the health and dental when her coverage first began. This however is another topic for another time.

Changes to Benefit Rules Reflect Market: More Owners Now Work Past Age 65

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Across North America, there are more and more people working past age 65. It used to be you couldn't get group benefits past age 65 - and you certainly couldn't start a group plan after age 65, but those rules just don't make sense in today's work force.

Under the Chambers Plan, you can apply for a new benefit plan once your company has been in operation for 6 months. Every Chambers Plan program is a custom program, and coverage for participants up to age 75 can include:

• Health Care, including paramedical services, ambulance, semi-private hospital, medical appliances and equipment and prescription drugs ( if desired ).
• Visioncare and Preferred Vision eyewear discounts.
• Health Access telephone line offering information on health, nutrition and regional resources.
• Unlimited Out-Of-Country Emergency Medical for an unlimited period of time.
• Group Life benefits with accidental death and injury payments.
• Dependent Life Insurance.
• Dental Benefits.
• Best Doctors for serious illness diagnosis and treatment planning services.
• Employee Assistance Counseling services for confidential help for personal issues.

So if age 65 is just another birthday to you and not retirement, remember your Chambers of Commerce Plan wishes you all the best - then keeps offering you the best in group benefits for small business.

Find Out If You Can Offer What You're Promising

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Every year I receive a few phone calls from business owners who ask if I can help them to provide group benefit coverages for just one key employee. The background and industry of every business has been different but their stories are very similar.

The owner tells me that they don't have coverage for themselves or their present employees, but they need it for just one person. In most cases this person has recently been hired, is in a managerial or supervisory position and they are key to the operation of the business. Some of these key people have been lured from a competing firm who offered group benefits. They consider the coverage important and they have negotiated for it to be part of their employment package with their new position.

The business owner explains that he promised their key person the same benefit plan coverages that they had with their past employer. No, they didn't make any inquiries beforehand and they are very surprised and disturbed that they have had no luck what-so-ever trying to fulfill their promise of coverage.

How big of a disaster do you think this might be? One business owner complained to me that his new key employee and his spouse were quite perturbed with him because they couldn't make appointments for their family with their new local Dentist because they still didn't have coverage after three month's employment and time. That's nothing I told him. Just imagine what would happen if your key employee or family member experienced a serious illness or injury while being without insurance benefits? Now that's trouble I said, and guess who could be held responsible for the employee's loss of income, drugs bills and other medical costs? It would be bad news for him but a dream come true for the firm of Shapiro and Shapiro.

There are presently 15 markets in Ontario who underwrite group benefit plans for businesses and as well there are a vast number of associations who offer group plans to their firm members. The majority of the 15 markets, (Great-West Life, Manulife, Sun Life and etc.), who I have access to, require firms with 5 or more full-time employees in order to provide coverage. In addition, most of these insurers require 100% participation for firms with fewer than 10 employees.

It is also important to know that many of these insurers require 5 - 10 or more employees in order to provide a benefit plan with guaranteed coverages. Therefore, if an employee with a small firm has a pre-existing health condition they could be declined some or all coverages.

The list of criterium of the different group insurance markets are too many to mention in one article. The point I wish to make is that business owners should take the time to consult a Group Benefits Broker to ensure that their promises can be honored in full.

Has Your Group Travel Insurance Taken A Holiday?

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Many group benefit plans cover emergency medical expenses for employees and their family members, so long as the claim is for an " accident or unexpected illness " outside the home province.

In many jurisdictions, if you have such a claim, you will first require to send your bills to your provincial health plan. Once the government has paid it's share, you then need to send the bills to your group insurer for reimbursement of any outstanding amounts. (As a regular service and to simplify the process, travel medical bills can be sent directly to the Chambers of Commerce Group Insurance Plan, and they then submit the bills to OHIP on your behalf. Also, their Out-of-Country coverage provides unlimited medical costs for an unlimited period of travel time).

It's important to review and understand your Out of Country/Province Coverage before you leave on your trip so that you are not faced with any costly surprises. It's possible that medical treatments received before you leave home could affect you or a family member's eligibility for travel coverage. Therefore before you travel:

• Check with your group insurer if you have had an illness that has been previously diagnosed or treated, especially if the condition has been identified within the 12 months prior to your departure.
• Check with your insurer if your treatment has changed, even if only the level of medication has changed and even if you're taking less of it.

Typically, group insurance plans cover unforeseen events that require immediate medical attention. If you know you have a medical condition now, be sure you share your insurer's understanding of what would qualify as an " unforeseen " event.

If your benefit program doesn't give you the travel safety net that you need, consider shopping for another program that will or an individual plan to fill any gaps.

so that I can assist you to aquire your own affordable insurance policy. Free quotations can be provided by phone, fax or email.