Understanding What You Have Before a Major Life-Changing Event

I recently encountered a situation that highlighted the importance of understanding your employer’s benefits package. As a new employee, you are often provided with a benefits booklet. While many people file it away and forget about it, this document contains valuable information that can have a significant impact on your financial well-being and healthcare coverage.

Your Core Benefits

Most employer-sponsored benefit plans include several key components:

1. Health and Wellness Coverage

This typically includes coverage for:

• Prescription drugs
• Vision care
• Dental services
• Paramedical treatments such as physiotherapy, massage therapy, chiropractic care, and other eligible health services

2. Insurance Protection

Many plans provide financial protection through:

• Life insurance
• Accidental death and dismemberment coverage
• Short-term or long-term disability benefits if you become unable to work

3. Retirement Savings

Employer-sponsored retirement programs may include:

• Group RRSPs
• Pension plans
• Employer matching contributions

These programs can significantly accelerate your retirement savings and should be fully understood and utilized whenever possible.

4. Spending Accounts

Some employers also offer spending accounts that provide additional funds for eligible expenses, including:

• Health Spending Accounts (HSA)
• Wellness Spending Accounts (WSA)

Depending on the plan design, these funds may be provided on a tax-free or taxable basis.

Understanding Cost Sharing

Another important feature of any benefit plan is understanding who pays for the coverage.

Employer-Paid Plans

The employer covers 100% of the monthly premium costs.

Cost-Sharing Plans

The employer and employee share the premium costs, often through payroll deductions. A common arrangement is an 80/20 split, where the employer pays 80% and the employee pays 20%.

Out-of-Pocket Expenses

Even with insurance coverage, employees may still be responsible for:

• Deductibles
• Co-payments
• Expenses that exceed plan limits

Understanding these costs can help avoid unexpected expenses when making a claim.

What You Should Always Do

To maximize the value of your benefits package, consider the following:

1. Review your benefits booklet regularly to understand annual maximums, coverage limits, exclusions, and claim requirements.
2. Contribute enough to receive your employer’s full matching contribution in a Group RRSP or pension plan. Failing to do so may mean leaving valuable compensation on the table.
3. Coordinate benefits with your spouse’s plan whenever possible. Combining coverage often results in significantly higher reimbursement levels, sometimes approaching 100% for eligible medical and dental expenses.
4. Update your benefits during open enrollment periods or immediately following a major life event such as marriage, the birth or adoption of a child, or other significant family changes.

Final Thoughts

Your employee benefits package is much more than a collection of insurance policies. It is an important part of your overall compensation and financial security. Taking the time to understand your coverage before a major life-changing event occurs can help you make informed decisions, maximize available benefits, and avoid unnecessary financial stress when you need support the most.

Written by: Leric Bishop CFP

Insurance products and services are offered by Mandeville Advisors licensed as life agents through Mandeville Insurance Services Inc. or 1847165 Ontario Inc. Your Mandeville Advisor will ensure you understand which company you are dealing with for the products and services offered to you.