Take control of your wellbeing by learning about the various health care options available to independent contractors! As a Canadian citizen or legal resident, you have access to free, standard healthcare through your provincial plan, regardless of your employment status.
How can independent contractors get health benefits that provincial health insurance does not provide? Discover the health coverage alternatives for independent contractors below.
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Health Insurance Alternatives for Independent Contractors
As a full-time business owner, you have a few options to choose from when shopping for supplemental health insurance. To decide between them, you will need to assess your business, including your immediate health care needs, future risk factors, and current budget. Discover some of your health insurance alternatives below.
Supplemental Health Plans
Under Canadian law, every Canadian resident enjoys free access to provincial health insurance. Canadian Medicare provides standard health care services, including:
- All medically necessary care
- Preventative care
- Diagnostic services
- Medical treatment
What Do Supplemental Health Insurance Plans Cover?
Unfortunately, Medicare only covers about three-quarters of the average person’s health care needs. Canadians must pay out of pocket for everything else unless they have supplemental health insurance.
If you find yourself wondering how can independent contractors get health benefits in Canada, take a look at some of the services that gap health insurance covers, including:
- Prescription medications
- Dental care
- Massage and physiotherapy
- Podiatry
- Chiropractic services
- Psychological care
- Nutrition and naturopathy
- Speech therapy
- Ambulance services
- Prescription eyeglasses
- Audiology and hearing aids
- Prosthetics, canes, and crutches
- Home care supplies
What Are the Benefits of Purchasing Supplemental Health Insurance?
Some independent contractors question whether they need supplemental health insurance. However, supplemental health coverage offers a whole host of crucial benefits. Some of the advantages to taking out a gap health insurance policy include:
- Peace of mind — Stop worrying about potential health issues and set your mind at ease
- Extensive coverage — Receive compensation for treatments not covered under Medicare
- Avoid financial ruin — Guard yourself against the soaring costs of medical care
- Tax deductions — Insurance premiums remain tax-deductible as a business expense.
Private Health Services Plan
A Private Health Services Plan (PHSP), also referred to as a Health Spending Account (HSA), allows an independent contractor to pay for medical treatment with funds from the business and claim the expenses as a tax deduction. The benefits of a PHSP include:
- No monthly insurance premiums
- Flexible, customizable benefits
- Pay only for what you need
- Greater control over healthcare costs
- Access to a wide array of healthcare services
- Save money when healthy
Some of the drawbacks of a PHSP include:
- Possibility of high out-of-pocket costs
- Burdensome government reporting requirements
- Potential need to hire third-party administrators to help with paperwork
Can Contractors Get Insurance to Cover Costs While Healing?
Covering the costs of your medical treatment will help you avoid significant medical debt. But what about the cost of missing work while you recuperate? With each day that passes, lost wages push you further away from your financial goals. Fortunately, independent contractors have a solid option to protect against lost earnings: Employment Insurance special benefits.
What Are Special Benefits?
Although regular Employment Insurance (EI) remains unavailable to independent contractors, you can still take advantage of special benefits from EI.
After registering for special benefits, it will take a minimum of 12 months for you to gain access to them. Once you can draw upon your special benefits, you may receive up to 55% of your regular income while tending to your health or the wellbeing of family members. However, keep in mind that EI caps special benefits at around $600 per week.
What Types of Special Benefits Are There?
EI offers six different types of special benefits to independent contractors, including:
- Maternity
- Parental
- Sickness
- Caregiver for children
- Caregiver for adults
- Compassionate care
Let’s discuss each type of benefit below.
Maternity Benefits
Maternity benefits allow people to take time off work during pregnancy and immediately after childbirth. The benefits last for a maximum of 15 weeks, so parents can cope with the difficulties of late-stage pregnancy and enjoy time with their newborn during the first few weeks of life.
Parental Benefits
Parents who wish to continue taking care of their own baby during the first year of life may do so if they have special benefits from EI. When you apply for disbursement of funds, you may select parental benefits that last for 40 or 69 weeks. You will receive the same total amount of money for either program, spread out evenly each week.
Sickness Benefits
If you fall ill or suffer a grievous injury, you can receive monetary benefits that partially offset your lost wages while you recover. With this benefit, you can recoup some of your losses for a maximum of 15 weeks.
Caregiver for Children Benefits
Individuals who need to care for sick or injured children can take time off work and receive special benefits for 35 weeks. This benefit applies to caregivers of people under the age of 18.
Caregiver for Adults Benefits
Independent contractors who intend to provide home care services to ill or injured adults will receive special benefits for 15 weeks. The weekly benefits go to individuals who care for adults 18 years of age or older.
Compassionate Care Benefits
Compassionate Care special benefits provide support to independent contractors who need to provide end-of-life care to another individual. The benefits last for 26 weeks.
Who Is Eligible for Special Benefits?
To become eligible for special benefits, you must:
- Be a citizen or legal resident of Canada
- Have registered for special benefits at least 12 months ago
- Experience a 40% decrease in time spent at work for one week
- Earn a net self-employment income of $5,300+ during the previous calendar year
Fishers, hairstylists, and taxi drivers do not need to apply for special benefits. Their special status makes them eligible for regular EI benefits.
How Do I Register for Special Benefits?
To register for EI special benefits, you must fill out the required forms on Canada’s Employment Insurance website. Then, you must pay your premiums and wait 12 months before you can apply for the benefits. You can pay your premiums every year when you file your tax returns.
How Much Do Special Benefits Cost?
To calculate your special benefits premiums, multiply your annual income by 0.0158.
The maximum premiums anyone needs to pay stand at about $890 per year. Employees and independent contractors must both pay the same rate for their EI premiums.
7 Group Healthcare Benefits for Small Businesses in Canada
Learn more about healthcare benefits in Canada in this article.
Group Enroll | Health Benefits for Independent Contractors
How can independent contractors get health benefits in Canada? Receive a free online quote for supplemental health insurance brokered by Group Enroll! We will compare quotes from the best available insurance providers and send you the best offer. You can also contact us at [email protected] or 10 Great Gulf Drive, Unit 5, Vaughan, ON, L4K 0K7.
