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Tag Archives: insurance

All Talent Development Centre posts for Canadian technology contractors relating to insurance.

Quick Poll Results: How do independent contractors handle health insurance?

Last month’s contractor quick poll tackled a topic that many independent contractors don’t like to think about — health insurance. There are a number of considerations when making the decision and plenty of research you could do on the topic, first about the type of insurance you’ll use and then on a specific supplier. While we do not have any recommendations on the best path or supplier for you, we do now have a bit more insight into what others are doing.

The results below show what our respondents do for health insurance and provides some insight if you’re currently evaluating your choices. Interestingly enough, the majority of respondents either get coverage through a spouses program or don’t have any medical coverage at all.

If you have any questions, leave them in the comments below and we’ll find you the answer or a resource that can help you.

How do you get medical coverage as an independent contractor?

Contractor Quick Poll: How do independent contractors cover their medical expenses

Towards the end of last year, we shared a post about health insurance options for independent contractors in Canada. It described two specific routes if you’re looking for coverage – standard insurance plans similar to those typically offered by employers, and Private Health Services Plans (PHSPs) which allow your contracting business to provide a non-taxable reimbursement for health expenses. Of course, there is also the option to forego any health insurance, possibly because you’re already fully covered through a spouse or you’d rather risk that any medical expenses will be less than insurance expenses. This month’s contractor quick poll seeks to find the most common practice among Canadian IT contractors.

Health Insurance for the Independent Contractor – What are your options?

When you make the switch from being a full-time IT employee with a great company to being an independent contractor with your own company, one of the stressful changes you’ll encounter is the loss of health coverage. Especially if you don’t have a spouse with sufficient coverage through their job or if your household medical expenses are relatively high, you want to find a new solution quickly. There are several great health insurance providers available to IT contractors across Canada and we are not providing one specific recommendation, but here are a couple options to help you start your research.

Insurance Plans

Standard health insurance plans, similar to those you received through your employer, are available through suppliers such as Blue Cross, Desjardins and PROLINK. As an incorporated contractor, your business pays a premium and selects a package that covers specific items, suitable for the needs of your employees (you and your family). When an employee needs to make a claim after paying for an appointment or purchasing prescription drugs, they (you) submit it to the insurance company and then get reimbursed.

While the process is easy and familiar, it’s recommended to do the math and research whether an insurance plan makes sense for your IT contracting company. Whether it’s an individual or group insurance plan, like any insurance, premiums can add up quickly depending how much is being claimed. In addition, there’s a good chance that the cost of those premiums include benefits that you are not ever going to use, but because they’re part of the package, you’re paying for them.

Private Health Services Plan (PHSP)

An alterative to regular insurance plans are Private Health Services Plans (PHSPs). These are CRA-approved solutions that allow your business to provide a non-taxable reimbursement for health expenses and claim a 100% tax deduction for the business. Compared to monthly premium plans, PHSPs can be a smart choice. In addition to the tax savings for both you as an individual and your business, they offer more flexibility in benefits. There is a wider range of choices in what you can claim and you only pay for what you do use. This gives you more control over costs and ultimately can lead to significant savings.

While PHSPs can be managed on your own, they require significant reporting and have some detailed rules to them, mandated by the CRA. As such, it is recommended to work through a middle-company, or an administrator, for example Brock Health, Trusted Advisor or PacifictFirst. These organizations will help you set-up and manage the right program for your small company and provide you with the proper reports for your accountant at the end of the year. There is an administration fee — sometimes fixed and sometimes a percentage (which is also charged HST) but this fee is usually much smaller than the premiums you’d pay with health insurance.

The options described above are a couple routes to explore when searching for the right health coverage solution for you and your IT contracting business; however, Eagle does not endorse any specific type or organization. We do strongly encourage you to discuss this further with your accountant and financial advisors. If you have anything to add on this topic based on your own experience, we’d love to hear it! Please let us know in the comments below…

Independent Contractor Insurance Coverage

The Importance of Securing Errors & Omissions and Commercial General Liability Insurance

 Guest Post from LMS ProLink

Independent contracting provides some of the best employment and career perks imaginable as the job flexibility, independence and variety is unparalleled. However, at the end of the day you are still self-employed and should protect yourself and your family from lawsuits that may arise. If either you or your corporation should be named in a lawsuit having the proper insurance coverage is key to long-term peace of mind.

When considering insurance options it is important to note that both the Errors & Omissions (“E&O”) and Commercial General Liability (“CGL”) policies are required to adequately protect you if you are incorporated or a sole proprietor. The E&O (also called Professional Liability) coverage protects, as the name implies, for your professional advice given. CGL coverage is focused on protecting you from claims as a result of Bodily Injury or Property Damage to a third party for whom you are legally liable. As litigation continues to be on the rise it is recommended that limits of at least $2,000,000 for both Errors & Omissions and Commercial General Liability be secured.

It is important to note that purchasing insurance is a fully tax deductible business expense. Also, by securing insurance coverage as an independent contractor you are investing in your business as this coverage reaffirms your independent contractor status with respect to Canada Revenue requirements.

LMS ProlinkLMS PROLINK Ltd. is an innovate and forward thinking insurance brokerage operating out of Toronto Ontario with satellite offices throughout the country.  We are an independent and a wholly Canadian operation that have specialized in professional insurance solutions for more than 30 years.  We understand the professions that we work with allowing us to provide industry leading coverage at extremely competitive prices.  Let our extensive knowledge work for you.

While prices can vary significantly at LMS PROLINK, there are a variety of independent contractor program options with rates starting at $24 month. Independent contractors working with a staffing agency like Eagle can get a customized insurance quote here. To learn more please visit www.prolink.insure/naccb/ or contact Fern Kako at fernk@lms.ca or 1-800-663-6828