Internet Service Provider - 1996

A 3-year-old internet service provider decided it was time to introduce employee benefits for their staff of six. Growth had been on-target and they needed to attract and retain competent staff is a tight labour market.

Medical & Dental Benefits

The cost and benefits of an insured health benefits was compared to a health spending account. The staff chose a health spending account in order to accommodate the unique needs of each employee. The initial contribution level was 2% of the average monthly salary, costing the employer $75 per employee. The contribution level was modified to 2% of the individual's prior year's earnings in 1998.

Long-term Disability Benefits

The staff purchased the best quality long-term disability insurance available. The policy included residual benefits and a conversion feature. The age banded payroll deductions ranged from 0.6% to 2.2% and averaged 1.1% of insurable payroll. Staff who terminate often become self-employed consultants and take advantage of continuing their disability insurance coverage.


Employee continue to appreciate the plan design and the cost of benefits as a percentage of salary has not changed in over 15 years.