Executive Group Benefits: Closing the Gap Between the Standard Plan and What Owners Actually Need
Business owners and senior executives are often the most under-insured people on their own company's group benefits plan. Here is how supplemental executive coverage generally works and why it gets layered on top of a standard plan.
The Irony of the Standard Group Plan
Many business owners set up a group benefits plan primarily to attract and retain employees. But because standard group plans are usually designed around average employee needs and cost-controlled maximums, the owner and senior executives, often the highest earners with the greatest family or dependent needs, can end up with the least adequate coverage relative to their actual expenses, particularly for paramedical services, dental care, and other out-of-pocket health costs.
What Supplemental Executive Coverage Typically Adds
- Higher paramedical maximums, for services such as physiotherapy, massage therapy, or psychology, above the caps set for the broader employee group
- Enhanced dental or vision maximums beyond what the base plan provides
- An executive health spending account, which reimburses eligible medical and dental expenses not otherwise covered, generally on a tax-effective basis
- In some structures, additional life or disability coverage layered specifically for owners and key executives above the group plan's blanket amounts
Why This Gets Layered on Top, Not Built Into the Base Plan
Raising the base plan's maximums for the entire employee group is usually far more expensive than adding a targeted layer for a small number of owners and senior executives. A supplemental layer lets the business keep its broad employee plan cost-effective while still recognizing that ownership and senior leadership often carry different financial responsibilities and face higher out-of-pocket costs.
Where Owners Commonly End Up Under-Insured
Many owners simply assume that being on the company's own plan means they are adequately covered, without ever checking their personal maximums against their family's actual usage, or realizing that a health spending account could fill gaps the group plan does not, such as expenses above an annual cap or entire categories the base plan excludes.
Make Sure Your Own Coverage Keeps Pace With Your Company's Plan
If you're a business owner unsure whether your personal protection keeps up with the gaps in your company's group plan, DMPG's Corporate Strategies team offers a free, no-obligation consultation to review your own life, disability, and key person insurance.
Frequently Asked Questions
Why are business owners often under-insured on their own company's group benefit plan?
Standard group plans are usually designed around average employee needs and cost-controlled maximums. Owners and senior executives, who are often the highest earners with the greatest family or dependent needs, can end up with the least adequate coverage relative to their actual expenses.
What is an executive health spending account?
It is an account structure that reimburses eligible medical and dental expenses not otherwise covered by the group plan or provincial health coverage, generally on a tax-effective basis for both the business and the individual, often used to fill gaps a standard group plan leaves behind.
What kinds of coverage are typically added through supplemental executive benefits?
Common additions include higher paramedical maximums for services like physiotherapy or psychology, enhanced dental or vision maximums, an executive health spending account, and in some structures additional life or disability coverage layered specifically for owners and key executives.
Why not just raise the maximums for the whole group plan instead of adding an executive layer?
Raising the base plan's maximums for every employee is typically far more expensive than adding a targeted layer for a small group of owners and executives, so a supplemental layer lets the business keep its broad employee plan cost-effective while still addressing the different needs of ownership.
Does DMPG administer employee group benefit plans?
No. DMPG's Corporate Strategies practice does not administer or broker group benefit plans directly. Where a group plan leaves a gap, our role is to review the personal insurance strategies we do provide, such as key person, disability-related, and life insurance coverage, so they work together with whatever group plan is already in place.
Found this helpful?