Table of Contents
- 4.1 Types of extended health coverage to protect savings
- 4.2 Types of individual extended health coverage
- 4.3 Group extended health coverage
- 4.4 Comparing individual and group policies
4.1 Types of extended health coverage to protect savings
Extended health insurance helps individuals and families pay for healthcare expenses that may not be fully covered by provincial health care plans.
💡 Extended health coverage helps protect:
- 💰 Personal savings
- 🏠 Family finances
- 📈 Retirement assets
📋 Common expenses covered may include:
- Prescription drugs
- Dental care
- Vision care
- Paramedical services
- Hospital expenses
- Medical equipment
4.1.1 Individual extended health insurance
🛡️ Individual extended health insurance is purchased directly from an insurance company.
📋 Key features include:
- Applicant owns the policy
- Applicant pays the premiums
- Benefits are usually paid to the insured person
- Coverage can be customized
💡 Individual plans are especially useful for people who:
- Do not have employer group benefits
- Are self-employed
- Need additional protection beyond group coverage
📌 Individual plans may be used to:
- Supplement provincial healthcare coverage
- “Top up” gaps in employer plans
- Increase benefit limits
- Add family coverage
⚠️ Policyholders may generally terminate the policy at any time.
4.1.2 Group extended health coverage
👥 Group extended health coverage is the most common source of extended health insurance outside provincial healthcare plans.
🏢 Group plans are commonly offered through:
- Employers
- Professional associations
- Unions
- Industry organizations
💡 Most group plans provide:
- Core health benefits
- Optional family coverage
- Shared group pricing advantages
📋 Group plans cover individuals who share a common connection, such as:
- Employment with the same employer
- Membership in the same association
- Similar occupations or professions
⚠️ Coverage terms are generally determined by the group contract rather than individual customization.
📌 Key Takeaway
Extended health insurance helps individuals manage healthcare expenses that provincial plans may not fully cover.
💡 Main types of coverage include:
- 🛡️ Individual extended health insurance → Personalized and flexible coverage
- 👥 Group extended health coverage → Affordable coverage through employers or associations
These plans help preserve savings and reduce the financial impact of unexpected medical expenses.
4.2 Types of individual extended health coverage
4.2.1 Medical care
🏥 Most Canadians are covered by provincial healthcare plans, but these plans do not cover every medical expense.
💡 Individual medical insurance helps:
- Fill gaps in provincial coverage
- Protect savings from unexpected healthcare costs
- Supplement employer group plans
- Provide coverage during provincial waiting periods
📋 Individual plans are often used for services such as:
- Chiropractic care
- Prescription drugs
- Vision care
- Dental care
- Emergency travel coverage
4.2.1.1 Coverage provided
🛡️ Individual medical care plans may include a wide range of benefits.
📋 Common coverages include:
- Extended health care
- Prescription drug coverage
- Accidental death and dismemberment (AD&D)
- Dental care
- Vision care
- Emergency travel medical insurance
💡 Policyholders can usually customize:
- Coverage types
- Benefit levels
- Deductibles
- Co-insurance percentages
- Annual maximums
⚠️ Broader coverage generally results in higher premiums.
4.2.1.2 Deductibles and co-insurance
💰 Insurers use deductibles and co-insurance to help control claim costs and premiums.
Deductibles
📋 A deductible is the amount the insured must pay before the insurer begins covering expenses.
💡 Deductibles:
- Reset annually
- Reduce insurance premiums
- Shift some costs to the insured
Co-insurance
📊 Co-insurance refers to the percentage of expenses shared between the insurer and the insured.
Example:
- Insurance covers 80%
- Insured pays 20%
⚠️ Co-insurance encourages responsible use of healthcare services and reduces unnecessary claims.
4.2.2 Dental care
🦷 Dental care is a major component of extended health insurance because provincial healthcare plans generally provide little or no dental coverage.
4.2.2.1 Coverage provided
Dental coverage usually falls into two categories:
- Routine maintenance
- Major restorative services
Routine maintenance
📋 Common routine dental services include:
- Regular check-ups
- X-rays
- Cleanings
- Fillings
- Extractions
💡 These services are usually covered up to an annual maximum.
Major restorative services
🦷 Major procedures may include:
- Crowns
- Inlays
- Advanced restorative treatments
⚠️ Major services often have lower co-insurance coverage, meaning the insured pays a larger share of the cost.
📌 Dental reimbursement is usually based on provincial dental association fee schedules.
⚠️ Charges above the approved schedule may not be covered.
4.2.2.2 Deductibles and co-insurance
💰 Dental plans commonly use deductibles and co-insurance because provincial plans rarely cover dental services.
📋 Common arrangements include:
- Insured pays 20–25% for routine services
- Insured pays around 50% for major restorative work
💡 These cost-sharing arrangements help reduce premiums and limit excessive claims.
4.2.3 Travel insurance
✈️ Travel insurance protects individuals travelling outside their home province or country.
📋 Coverage may include:
- Emergency medical expenses
- Lost luggage protection
- Trip cancellation
- Emergency transportation
- Return home assistance
⚠️ Healthcare costs outside Canada, especially in the United States, can be extremely expensive.
4.2.3.1 Coverage provided by an insurer
🛡️ Comprehensive travel insurance purchased directly from an insurer may cover:
- Doctors’ fees
- Hospitalization costs
- Ambulance services
- Medical equipment
- Emergency dental treatment
- Return transportation
- Repatriation of remains
- Lost baggage
- Trip interruption or cancellation
📞 Insurers also commonly provide emergency assistance services for travellers abroad.
Examples include:
- Hospital referrals
- Ambulance arrangements
- Emergency support lines
4.2.3.2 Coverage provided through a credit card
💳 Many credit cards include travel insurance benefits.
⚠️ However, credit card travel insurance is often:
- More limited
- Automatically issued
- Subject to claim-time underwriting
💡 Coverage terms vary widely between card issuers and card types.
⚠️ A major concern is pre-existing condition exclusions, which may only be reviewed after a claim occurs.
4.2.3.3 Pre-existing conditions
🩺 Pre-existing conditions are one of the most common reasons travel insurance claims are denied.
📋 A pre-existing condition may exist if, before travel, the insured:
- Saw a doctor for symptoms
- Received treatment
- Changed medications
- Was advised to undergo tests
⚠️ Chronic conditions such as diabetes or heart disease may also affect coverage eligibility.
💡 Insurers often require the condition to remain stable and symptom-free for a specific period before travel.
4.2.3.4 Benefits
💵 Travel insurance benefits are often paid on a reimbursement basis.
📋 Typical process:
- Insured pays expenses upfront
- Claim submitted to insurer
- Insurer reimburses eligible costs
📞 Insured individuals are generally expected to contact the insurer immediately in emergencies.
⚠️ Failure to notify the insurer promptly may reduce or void benefits.
Standard exclusions
🚫 Travel insurance usually excludes claims related to:
- Attempted suicide
- Self-inflicted injuries
- War
- Drug or alcohol abuse
- Normal pregnancy
Travel-specific exclusions
✈️ Additional exclusions may include:
- Hazardous activities
- Travel to high-risk countries
- Non-emergency medical treatment abroad
4.2.3.5 Factors affecting premiums
💰 Travel insurance premiums depend on several factors.
Amount of coverage
📋 Policies with broader protection cost more.
Example:
- Trip cancellation coverage increases premiums.
Length of trip
📅 Longer trips generally result in higher premiums.
Destination
🌍 Travel destinations strongly affect premiums.
Examples:
- Travel within Canada → Lower cost
- Travel to the U.S. → Higher cost
- High-risk regions → Much higher premiums
⚠️ Some destinations may be uninsurable.
Age and medical history
👴 Older travellers and individuals with medical conditions generally pay higher premiums.
⚠️ Individuals over age 65 often face significantly increased costs.
4.2.4 Taxation of individual extended health insurance premiums and benefits
📋 Tax treatment of individual extended health insurance:
Premiums
❌ Premiums are generally not tax-deductible.
✅ However, premiums may qualify for the:
- Medical Expense Tax Credit (METC)
Benefits
✅ Benefits received under individual extended health insurance policies are generally tax-free.
💡 Tax-free reimbursement helps protect personal savings from medical and healthcare expenses.
4.3 Group extended health coverage
4.3.1 Types of coverage
👥 Group extended health plans provide additional healthcare protection beyond provincial healthcare coverage.
📋 Common group health benefits include:
- 💊 Prescription drugs
- 🏥 Enhanced medical and hospital care
- 🦷 Dental care
- 👓 Vision care
- 🚑 Accidental death and dismemberment (AD&D)
4.3.1.1 Prescription drugs
💊 Prescription drug coverage is one of the most important components of group health insurance.
📋 Group plans generally cover:
- Prescription medications only
- Drugs prescribed by authorized medical professionals
- Medications dispensed through pharmacies
⚠️ Over-the-counter medications (such as aspirin) are usually not covered.
Brand-name vs generic drugs
💡 Covered prescription drugs are often divided into:
- Brand-name drugs
- Generic drugs
📌 Generic drugs usually cost less because manufacturers do not bear original research and development costs.
📋 Group plans may:
- Cover generic drugs only
- Reimburse only up to the generic price
- Require the insured to pay the difference for brand-name drugs
⚠️ Each insurer maintains a formulary (approved drug list) that determines covered medications and reimbursement limits.
4.3.1.2 Enhanced medical and hospital care
🏥 Provincial healthcare plans do not cover every medical expense.
💡 Enhanced medical benefits help “top up” provincial coverage.
📋 Covered services may include:
- Chiropractors
- Massage therapists
- Naturopaths
- Optometrists
- Ambulance services
- Medical equipment
- Wheelchairs
- Oxygen equipment
Hospital accommodation upgrades
🛏️ Group plans may also cover upgraded hospital accommodations such as:
- Semi-private rooms
- Private rooms
⚠️ Coverage is usually subject to daily maximum limits and maximum number of covered days.
📌 Enhanced medical benefits often include:
- No annual deductible
- Co-insurance requirements
4.3.1.3 Dental care
🦷 Dental care is often the most expensive component of group health plans.
⚠️ Provincial healthcare plans generally provide little or no routine dental coverage.
Common dental services covered
📋 Group dental plans commonly cover:
- Teeth cleanings
- Check-ups
- X-rays
- Fillings
- Extractions
- Restorative procedures
Orthodontic coverage
😁 Orthodontic treatment may also be covered, subject to:
- Maximum limits
- Predetermination of treatment costs
⚠️ Cosmetic dental procedures are generally excluded.
Examples:
- Teeth whitening
- Cosmetic caps
- Purely cosmetic straightening
Cost control methods
💰 Insurers manage dental plan costs through:
- Deductibles
- Co-insurance
- Annual maximums
- Lifetime maximums
4.3.1.4 Vision care
👓 Vision care coverage helps pay for visual correction expenses.
📋 Covered expenses may include:
- Prescription eyeglasses
- Contact lenses
- Optometrist fees
💡 Typical vision care limits:
- $100–$350 every 24 months
⚠️ Benefits are usually payable only when:
- Glasses are prescribed
- A prescription change occurs
- The insured requires a first pair of glasses
4.3.1.5 Accidental death and dismemberment (AD&D)
🚑 AD&D coverage pays benefits for accidental:
- Death
- Loss of limbs
- Loss of hearing
- Loss of eyesight
⚠️ Coverage applies only to accidental events, not illnesses or diseases.
Benefit structure
💰 AD&D benefits are based on a principal sum.
Examples:
- Full principal sum → Accidental death
- Partial percentage → Loss of one limb or sight
📌 More severe losses generally result in larger benefits.
⚠️ To qualify:
- Loss or death must occur within 365 days of the accident
- The accident must directly cause the loss
4.3.2 Benefits
💡 Group extended health plans may not cover every expense fully.
📋 Common plan limitations include:
- Annual maximums
- Visit limits
- Co-payments
- Coverage restrictions
Example:
- Maximum of 12 professional visits annually
- Maximum reimbursement per visit
4.3.2.1 Deductibles and co-insurance
💰 Group plans often require plan members to share costs through:
- Deductibles
- Co-insurance
Deductibles
📋 Deductibles must be paid before benefits begin.
Some plans may include:
- Individual deductibles
- Family deductibles
💡 Family claims may reduce the family deductible collectively.
Co-insurance
📊 Co-insurance applies after deductibles are satisfied.
Example:
- Plan covers 80%
- Member pays 20%
⚠️ Dental claims commonly use co-insurance arrangements.
4.3.2.2 Reimbursement
📄 Under reimbursement systems:
- Plan member pays expenses upfront
- Claim submitted with receipts
- Insurer reimburses eligible amount
💡 Payments are usually made by cheque or direct deposit.
4.3.2.3 Direct billing
💳 Direct billing allows providers to bill the insurer directly.
📋 Common examples include:
- Pharmacies
- Dentists
💡 The member only pays:
- Deductibles
- Co-insurance
- Amounts above plan limits
4.3.3 Taxation of group extended health insurance premiums and benefits
Employer-sponsored plans
🏢 In most provinces:
- Employer-paid premiums are tax-deductible to the employer
- Premiums are not taxable benefits to employees
- Benefits received are tax-free
Québec exception
⚠️ In Québec:
- Employer-paid premiums are taxable benefits to employees
- Benefits received remain tax-free
4.3.3.1 Premiums and the medical expense tax credit
💡 In non-employer group plans:
- Member-paid premiums are not tax-deductible
- Premiums may qualify for the Medical Expense Tax Credit (METC)
4.3.4 Integrating an individual policy with a group policy
🛡️ Individuals may combine:
- Group extended health coverage
- Individual extended health insurance
💡 Reasons for adding individual coverage include:
- Filling coverage gaps
- Increasing benefit limits
- Reducing co-insurance exposure
- Supplementing limited group benefits
📌 Individual policies can provide valuable “top-up” protection where group plans are limited.
4.4 Comparing individual and group policies
🛡️ Individual and group extended health insurance plans both help protect individuals from medical and healthcare expenses, but they differ significantly in:
- Ownership
- Cost
- Flexibility
- Underwriting
- Portability
- Tax treatment
💡 Understanding these differences helps individuals choose the type of coverage best suited to their personal and financial needs.
Comparison of Individual and Group Extended Health Insurance Policies
| Feature | 🛡️ Individual Policy | 👥 Group Policy |
|---|---|---|
| Policyholder | Applicant/insured | Group sponsor (usually employer or association) |
| Control by Insured | Full control over coverage | Limited control under master contract |
| Portability | ✅ Fully portable | ❌ Usually ends when leaving the group |
| Underwriting at Application | Full underwriting usually required | Minimal or no underwriting for basic coverage |
| Retroactive Underwriting at Claim Time | ❌ Usually no | ❌ Claims adjudication only |
| Premium Basis | Based on individual risk factors | Based on group characteristics and claims history |
| Premium Cost | Generally higher | Generally lower |
| Coverage Flexibility | Highly customizable | Limited by group plan rules |
| Family Coverage | Available for extra premium | Usually available |
| Coverage Limits | Often lower maximums | Usually higher coverage limits |
| Pre-existing Conditions | Often excluded by rider | Usually covered under group plan |
| Cost Sharing | Paid entirely by insured | May be employer-paid or shared |
| Deductibles | Less common | Common, especially dental |
| Co-insurance | Common | Common |
| Taxation of Premiums | May qualify for Medical Expense Tax Credit | Employer-paid premiums usually deductible to employer |
| Taxation of Benefits | Benefits tax-free | Benefits tax-free |
🛡️ Individual Extended Health Policies
Individual policies provide greater flexibility and customization.
✅ Advantages include:
- Full ownership and control
- Portable coverage
- Customized benefit options
- Flexible coverage selection
⚠️ Disadvantages include:
- Higher premiums
- Medical underwriting requirements
- Possible exclusions for pre-existing conditions
💡 Individual coverage is often preferred by:
- Self-employed individuals
- People without group benefits
- Individuals seeking customized protection
👥 Group Extended Health Policies
Group policies are commonly offered through employers or associations.
✅ Advantages include:
- Lower premiums
- Easier qualification
- Higher coverage limits
- Coverage for pre-existing conditions
⚠️ Disadvantages include:
- Less flexibility
- Coverage tied to employment or membership
- Limited personal control over plan design
💡 Employers may also share or fully pay premiums, reducing costs for employees.
📌 Deductibles and Co-insurance
💰 Both individual and group plans commonly use:
- Deductibles
- Co-insurance
⚠️ These cost-sharing features help reduce premiums and control claim costs.
📋 Common examples:
- 80/20 co-insurance
- Annual dental deductibles
- Maximum reimbursement limits
📌 Tax Treatment
💡 Tax treatment differs depending on the type of coverage.
Individual policies
- ❌ Premiums are generally not tax-deductible
- ✅ Premiums may qualify for the Medical Expense Tax Credit
- ✅ Benefits are tax-free
Group policies
🏢 In most provinces:
- Employer-paid premiums are deductible to the employer
- Premiums are not taxable benefits to employees
- Benefits are tax-free
⚠️ Québec is an exception, where employer-paid premiums are considered taxable benefits to employees.
📌 Key Takeaway
Both individual and group extended health insurance plans provide valuable protection against healthcare expenses.
💡 Main differences include:
- 🛡️ Individual plans → Greater flexibility and portability
- 👥 Group plans → Lower cost and easier access
Many individuals combine both types of coverage to maximize healthcare protection and reduce out-of-pocket medical expenses.
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