Design Tips

Eligibility for Benefits (Benefit Tips ® - © 2015)

Who gets Coverage?

It’s important to clearly define who qualifies for benefit coverage. If benefits are viewed as a component of total compensation then coverage can vary and be targeted specifically at unique groups of employees. Some coverage may be provided to all employees as an expression of corporate culture. Other benefits may be tailored to achieve specific recruitment and retention goals of key staff.

Variation Based on Classification

Employees can be grouped according to the characteristics they have in common. Classifications could be formed around method of compensation (hour, salaried), occupation (management, sales, office, production), seniority and employment type (full-time, permanent part-time, union).

Commencement of Coverage

Benefits may begin on the first day of employment or at some later date. Variations may be made by classification of employee as well as benefit type. An example would be to have life and disability benefits begin on the first day of employment, retirement benefits begin after 6 months and health benefits (drugs, dental, vision, medical) after 3 months for hourly staff and immediately for salaried staff.

Duration of Coverage

Unless otherwise stated benefits continue until the employee retires. Care should be taken when reducing or terminating benefits based on age in order not to violate discrimination laws. Some jurisdictions permit the termination of benefits at a specific age. For example, Ontario’s Employment Standards Act permits benefits to be changed at age 65.

Special Situations

Permanent seasonal staff can be covered if the minimum number of hours worked per week requirement is amended to minimum average hour worked per week over the past 12 months. The definition of earnings needs to be modified for income bases life and disability insurance to average earnings over the past 12 months.

Contract staff can be covered if they work exclusively for the policyholder and their names are listed in the insurance policy.