Personal Finance

Opt out of company medical

  • Last Updated:
  • Mar 9th, 2018 11:25 am
[OP]
Newbie
Sep 30, 2014
4 posts
North Saanich

Opt out of company medical

I just started the first job where I have part of my extended benefits deducted from my pay. (Past jobs have had no benefits or have been 100% employer paid.) I am shocked to learn how much they cost. It is my opinion that I am not getting sufficient value for money, so I would like to opt out. The only way to opt out, according to the form (from Great West Life) is: "Health and/or dental coverage can only be refused if you and/or your dependants are covered by duplicate group benefits through your spouse's employer."

My spouse is self-employed, currently as a sole-proprietor. Therefore she does not have an employer. She could incorporate and she could become an employee of the corporation. If for some reason it is a problem being an employee-shareholder, we could put me as the sole shareholder. Anyway, the idea is the corporation would provide "duplicate group benefits" to my wife, and then I could opt out.

Does anybody know the exact definition used by Great West Life as to what qualifies as "duplicate group benefits?"
18 replies
Deal Addict
Jan 1, 2017
1425 posts
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How much do you contribute each pay cheque? Maybe start making use of the benefits and you will see the return. Go to a massage therapist or chiro, go get an eye exam, get prescription glasses and sunglasses, go get a dental check up, dental work you might need and a dental cleaning.
Deal Addict
Sep 5, 2005
1033 posts
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Victoria
themorb wrote: Does anybody know the exact definition used by Great West Life as to what qualifies as "duplicate group benefits?"
My guess is that they would need to see that you are receiving equivalent coverage from another benefits provider. It doesn't sound like that's the case.
[OP]
Newbie
Sep 30, 2014
4 posts
North Saanich
tofinoguy wrote: My guess is that they would need to see that you are receiving equivalent coverage from another benefits provider. It doesn't sound like that's the case.
Maybe I wasn't clear. My idea is to buy "duplicate group benefits" for our family, provided to my spouse, through her employer, being an incorporation we would set up. I want to know what would qualify as "duplicate group benefits" so I can shop around the insurance providers and find the cheapest plan that qualifies.
Deal Addict
Jan 16, 2016
1464 posts
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Hamilton, ON
themorb wrote: Maybe I wasn't clear. My idea is to buy "duplicate group benefits" for our family, provided to my spouse, through her employer, being an incorporation we would set up. I want to know what would qualify as "duplicate group benefits" so I can shop around the insurance providers and find the cheapest plan that qualifies.
Just forge some proof of insurance document so you can opt out and be done with it, or get one from a close friend and change the name on the document. This is the most stupid thing ever, 'mandatory' health benefits... ridiculous. If I want to take the risk and self-insure against any accident or illness I should be allowed to do so.
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Nov 19, 2004
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Cambridge, ON
Have your wife use a PHSP. She doesn't have to be incorporated. Not equivalent coverage since there is a maximum per year per dependent, but it should be proof enough that you have coverage.

The other suggestion is to keep the coverage and have your wife claim the health and dental premiums through the PHSP, so at least the first $1500 becomes a direct deduction for her.
Deal Addict
Jul 3, 2017
3860 posts
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Unlikely to work.

The reason that the insurance company contract with your employer requires all employees to be covered is that their rates are based on your company demographic, including a certain portion of young healthy workers who will under-use the benefits. If they allowed people to opt out easily, then the young healthy workers would be more likely to opt out, leaving them with an altered pool of higher-risk employees

Hence the restriction, and they will ask for proof that you are receiving equivalent benefits under a spousal plan.

If you think that your wife's small business can get a better rate, especially if you are both young and healthy, that's unfortunately probably not the case. Insurance companies generally offer better rates to larger companies because of the larger pool of employees. They consider small companies with just a couple of employees a high risk, because they won't be able to average any high claim over a large pool. You can try shopping around with any industry associations your wife's company belongs to, which may offer a larger pool, and of course you could try reducing the benefits slightly so that they still qualify as equivalent, but a bit less costly. But I think you'll find in the end that any potential savings are slim or none.

I know it seems like a ripoff to be forced to participate in an insurance program where you are probably paying 10x what the benefits are worth to you, but that's the way insurance risk pooling works. You'll be the beneficiary of it later in life.
[OP]
Newbie
Sep 30, 2014
4 posts
North Saanich
don242 wrote: Have your wife use a PHSP. She doesn't have to be incorporated. Not equivalent coverage since there is a maximum per year per dependent, but it should be proof enough that you have coverage.
This is basically what I was thinking. My question is whether the PHSP will be enough for GWL to let me opt out...
don242 wrote: The other suggestion is to keep the coverage and have your wife claim the health and dental premiums through the PHSP, so at least the first $1500 becomes a direct deduction for her.
Can you elaborate on this?
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Nov 19, 2004
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themorb wrote: Can you elaborate on this?
Health premiums are an eligible expense, so if your wife has a PHSP setup she can submit your premiums to the plan. Her plan would cover immediate family, $1500 for each adult and $750 for each child since she is a sole proprietor. She just submits the premiums under your name (since you are covered under her plan) and now she can now deduct the PHSP expense from her income as a straight deduction.

Not perfect as you are still paying the premiums, but at least this way it gives your wife a bit more of a tax break than just claiming them as medical expenses. This is of course, assuming your wife has enough income to benefit from the expense.
Sr. Member
Sep 23, 2013
513 posts
289 upvotes
Windsor, Ontario
You'll have to call GWL directly to see if they'll accept and HSP account as a duplicate group benefit. I don't see why they wouldn't, it covers everything the group plan would cover, with less restriction. There are other perks to the PSHP (especially if you're incorporated) that you might find use of, especially since it's a tax deductible benefit.
Life and Health Insurance Agent.
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Jan 27, 2004
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Exp315 wrote: Unlikely to work.

The reason that the insurance company contract with your employer requires all employees to be covered is that their rates are based on your company demographic, including a certain portion of young healthy workers who will under-use the benefits. If they allowed people to opt out easily, then the young healthy workers would be more likely to opt out, leaving them with an altered pool of higher-risk employees

Hence the restriction, and they will ask for proof that you are receiving equivalent benefits under a spousal plan.

If you think that your wife's small business can get a better rate, especially if you are both young and healthy, that's unfortunately probably not the case. Insurance companies generally offer better rates to larger companies because of the larger pool of employees. They consider small companies with just a couple of employees a high risk, because they won't be able to average any high claim over a large pool. You can try shopping around with any industry associations your wife's company belongs to, which may offer a larger pool, and of course you could try reducing the benefits slightly so that they still qualify as equivalent, but a bit less costly. But I think you'll find in the end that any potential savings are slim or none.

I know it seems like a ripoff to be forced to participate in an insurance program where you are probably paying 10x what the benefits are worth to you, but that's the way insurance risk pooling works. You'll be the beneficiary of it later in life.
Disike! We pay so much for insurance.... mind as well use it!
So far I'm loving my
-Orthotics
-Glasses
-Registered massage
-dental
-deeply discounted otc meds. just ask your doc for a prescription of something simple like cough syrup or even tylenol if you need it... you'd surprised whats covered!
-$500 worhtof nicorette
Deal Addict
Aug 30, 2011
3462 posts
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UrbanPoet wrote: Disike! We pay so much for insurance.... mind as well use it!
So far I'm loving my
-Orthotics
-Glasses
-Registered massage
-dental
-deeply discounted otc meds. just ask your doc for a prescription of something simple like cough syrup or even tylenol if you need it... you'd surprised whats covered!
-$500 worhtof nicorette
I upvoted Exp315 because I read that he believes the insurance IS a good idea, even though it doesn't seem like it when you're young and healthy. And it's certainly going to be cheaper when there are a large number of individuals in the group who are paying premiums.

I think you're agreeing with him, no? Hubby and I use our health benefits, although there is never 100% coverage.
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Jan 27, 2004
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OttawaGardener wrote: I upvoted Exp315 because I read that he believes the insurance IS a good idea, even though it doesn't seem like it when you're young and healthy. And it's certainly going to be cheaper when there are a large number of individuals in the group who are paying premiums.

I think you're agreeing with him, no? Hubby and I use our health benefits, although there is never 100% coverage.
oh I dislike how they depend on younger people under using the plan.
But its true... Even if I max out all this stuff... ITs nothing compared to say... someone who needs a hip replaced, and 2 weeks in hospital bed...
Sr. Member
Sep 23, 2013
513 posts
289 upvotes
Windsor, Ontario
The problem with everyone maximizing benefit use every year is that premiums in pooled plans have limits (ex: 12-16 months) at which point the insurance company will hike the prices. This will then force the company to find another plan, the next company can look at the employee claims past and also list higher premiums. Those extra costs might eventually fall in the hands of the employees.
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Dec 27, 2009
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ProductGuy wrote: How much do you contribute each pay cheque? Maybe start making use of the benefits and you will see the return. Go to a massage therapist or chiro, go get an eye exam, get prescription glasses and sunglasses, go get a dental check up, dental work you might need and a dental cleaning.
The medical benefits are through the roof these days, and for every bit you use it is calculated into your companies increase the next year. Total rip-off. Probably not so bad in huge companies/government, but a small company - yikes!
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Sep 19, 2013
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I am also stuck in such a plan for 6 years. When I joined the company, there was an option to go for essentials or extended. I (foolishly) opted for the extended. Now I cant change it back.
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Newbie
Feb 14, 2015
60 posts
5 upvotes
Surrey, BC
don242 wrote: Health premiums are an eligible expense, so if your wife has a PHSP setup she can submit your premiums to the plan. Her plan would cover immediate family, $1500 for each adult and $750 for each child since she is a sole proprietor. She just submits the premiums under your name (since you are covered under her plan) and now she can now deduct the PHSP expense from her income as a straight deduction.

Not perfect as you are still paying the premiums, but at least this way it gives your wife a bit more of a tax break than just claiming them as medical expenses. This is of course, assuming your wife has enough income to benefit from the expense.

Is that correct that the portion of a benefits plan not paid for by the company is deductible? Is this information required to be input on a T4 somewhere? I see that box 40 matches with my pay stub, the total amount of employer paid benefits for the year. However my bi-weekly portion of the benefits is sizeable and not shown anywhere on my T4. Any reason for this? Am I ok to use the amount shown on my pay stub (paid by me) for the year as a medical expense? Would I need any further proof? I am far over the 3% of total salary to make this claim as this tax year I've had out of pocket corrective orthodontic work.

Appreciate any insight.
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Nov 19, 2004
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Hockeyguy3 wrote: Is that correct that the portion of a benefits plan not paid for by the company is deductible? Is this information required to be input on a T4 somewhere? I see that box 40 matches with my pay stub, the total amount of employer paid benefits for the year. However my bi-weekly portion of the benefits is sizeable and not shown anywhere on my T4. Any reason for this? Am I ok to use the amount shown on my pay stub (paid by me) for the year as a medical expense? Would I need any further proof? I am far over the 3% of total salary to make this claim as this tax year I've had out of pocket corrective orthodontic work.

Appreciate any insight.
The premiums paid by you are deductible as long as they are health premiums. It cannot include disability, life insurance, etc. premiums.

Only the employer portion would appear on your T4. The portion paid by you wouldn't be on the T4 since you are paying. So yes, you can use your pay stubs to show how much you are paying. Again, as long as it is clear that it is for a health plan only and does not include the others.

My post was in reference to using a PHSP, but you could apply it to your medical expenses instead and claim it that way.
Deal Addict
Nov 8, 2017
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Is it part of the condition of employment?
Did you know about this medical plan when you applied?
If you did, or is a condition of employment, then you're hooped
It's like saying you'd only like to work from 9-3 when the requirements of the job say 9-5

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