Group Benefits for Small Business Ontario: A Starter Plan

You just lost another good technician to a bigger company.

They didn’t leave for more pay. They left for a health and dental plan. Now you’re back to square one, posting on job boards and hoping to find someone who won’t need six months of training to be useful on a job site.

This is a story we hear constantly from owners of successful plumbing, HVAC, and electrical shops. You’ve built a great business, but you’re competing for talent against union shops or larger companies with full-blown HR departments. You feel stuck.

By the end of this article, you will have a clear, step-by-step framework for designing an affordable group benefits plan that helps you keep your best people. You'll know exactly what to include, what to skip for now, and how to control costs from day one.

The Cost of “Saving Money” on Benefits

Most owners think about the monthly premium first. That’s a mistake. The real cost is the cost of doing nothing.

Imagine your lead project manager, the one who knows every client and every job, gets a serious cancer diagnosis. They’re off work for a year. Without a Long-Term Disability (LTD) plan, their income stops. Their family is in crisis. And you are left trying to manage a dozen complex jobs while searching for a temporary replacement who has a fraction of their experience.

Or, consider the slow drain. A competitor across town offers a simple benefits plan. Your youngest, sharpest apprentice—the one you were mentoring to take over—leaves for that job. Now you have to calculate the cost of finding, hiring, and training their replacement over the next year. It’s almost always more than the annual cost of a starter benefits package.

A benefits plan isn't a cost centre; it's a system for protecting your business and your people from catastrophe.

The Foundation: What Absolutely Must Be in Your Plan

When your budget is tight, you don’t start with massage therapy and orthodontics. You start with the things that protect your team from financial ruin. These are the non-negotiables.

1. Long-Term Disability (LTD) Insurance: This is the single most important piece of any benefits plan. If an employee gets sick or injured and can't work for months or even years, LTD replaces a portion of their income (typically 60-70%). It's the benefit that keeps their mortgage paid and their family afloat. Without it, your employee is applying for government assistance, and you’ve lost a key person for good.

1. Life Insurance: A basic life insurance policy provides a lump-sum payment to an employee's family if they pass away. It’s typically a flat amount (like $25,000) or a multiple of their salary (1x or 2x earnings). This is inexpensive coverage that provides immense peace of mind.

1. Accidental Death & Dismemberment (AD&D): This is usually paired with life insurance. It pays out an additional benefit for a death or severe injury resulting from an accident. Given the nature of work in the trades, this coverage is essential.

Start with these three. They are the bedrock of a responsible plan. They cover the unthinkables. Everything else is about managing day-to-day health costs.

Layering on Health and Dental: A Smart Approach

Once the foundation is set, you can add health and dental coverage. This is where plan design becomes crucial for controlling costs.

What most owners do is ask an insurer for a “standard plan” and get a huge quote that includes everything. What actually works is building a plan piece by piece, based on your budget.

Prescription Drugs

This is the most-used part of any health plan. You have a few levers to pull:

• Coinsurance: This is the percentage the plan pays. 80% is the standard. This means the employee pays 20% of the prescription cost out-of-pocket. Requiring some employee contribution keeps everyone mindful of costs.
• Annual Maximum: You can set a cap on the total amount the plan will pay for drugs per person, per year. A starter plan might have a cap of $2,500 or $5,000. This protects the plan from a single person having extremely high drug costs.
• Dispensing Fee Caps: You can limit how much the plan will reimburse for the pharmacist’s fee, which can vary wildly.

Paramedical Services (The “Paras”)

This includes services like physiotherapy, massage therapy, chiropractors, and psychologists. This is the category that can drive premiums up quickly if not managed.

• What most owners do: Offer a combined maximum, like $1,000 for any and all services. This often leads to one employee using the entire amount on massage therapy in three months.
• What actually works: Set individual maximums for each service. For example, you could offer $400 per year for physiotherapy, $400 for a chiropractor, and $400 for massage. This ensures the benefit is available for various needs and isn't exhausted on a single type of treatment. You can also add a per-visit limit.

This is where an advisor who understands small business and the trades makes a difference. We design hundreds of group benefits plans for shops your size. We know which services are used most and how to structure the plan to provide real value without breaking your budget. For a small renovation contractor, for example, we'd emphasize physiotherapy coverage. See what a custom plan for your trade could look like in a no-cost Fit Review.

Dental Care

Dental benefits are typically broken into three categories. You don’t need all of them at the start.

1. Basic Services: This is the must-have. It covers cleanings, check-ups, fillings, and extractions. An 80% coinsurance level is standard and affordable.
2. Major Services: This includes crowns, bridges, and dentures. These are expensive procedures. A good starter plan can omit this category entirely or include it with 50% coinsurance. It's a great perk to add later as your business grows.
3. Orthodontics: This is for braces and is almost never included in a small business starter plan. It is very expensive and benefits a small number of employees. Save this for when you have 50+ employees.

A plan with LTD, Life/AD&D, 80% drugs, a $400 bundle of key paramedical services, and 80% basic dental is a fantastic, competitive starter plan.

Common Objections from Owners Like You

Even when the path is clear, there are hurdles. Here are the three we hear most often.

• “I’m too small for a real plan.”

A common myth is that you need a large team. In Ontario, you can set up a true group benefits plan with as few as two employees (not including the owner). You don't need an HR department. The setup and administration are straightforward when handled by a specialist.

• “It’s too expensive. I can’t afford it.”

A well-designed starter plan often costs less per employee than their company phone plan. Because the premiums are a tax-deductible business expense and the benefits are received tax-free by the employee (except for LTD), it's one of the most efficient ways to increase total compensation. You are not just paying premiums; you are investing in retention and stability.

• “My accountant handles this stuff.”

Your accountant is essential for tax strategy and financial reporting. They are not a licensed insurance advisor or a group benefits specialist. An accountant files your taxes; an advisor designs a plan, negotiates with multiple insurers for the best rates, helps you communicate it to your team, and advocates for you at renewal time or if a complex claim arises. It’s a completely different skill set.

Do This This Week

This isn't just theory. You can take action right now.

1. Poll your team informally: Ask what two things would be most helpful in a health plan: prescription drugs, dental check-ups, or physio/massage?
2. Set a preliminary budget: Decide what you could comfortably invest per employee per month. Is it $100? $150? Having a number in mind makes the next step productive.
3. Gather your employee data: To get a real quote, you'll need a list of employees with their birth dates, job titles, salaries, and whether they need single or family coverage. This is all confidential.
4. Schedule a discovery call: Find an advisor who works with other business owners in your industry.

This is general information, not tax or legal advice for your situation.

Designing and managing a group benefits plan is what we do for business owners across Durham Region. We can take your budget and your team's needs, and model a plan that makes sense for you right now. The process starts with a short, 30-minute Fit Review to see if we're the right partner for your business. We can show you exactly what a plan would look like using our quoting tools. Our client roster is intentionally limited to ensure every business gets the attention it deserves, and every application is read personally by a partner. Book a call with us today.