Group Benefits Glossary

Current as of October 2026. Government programs, tax rules and prices change. Check the official sources listed at the end of this page before making a decision, and confirm details with a licensed advisor.

Coinsurance vs deductible: the two terms people mix up most

A deductible is a set dollar amount a plan member pays first in a benefits year before the plan starts reimbursing. Coinsurance is the percentage the plan pays on each eligible expense after that. Some plans use one, some use both, and some use neither for certain benefits.

Here is a simple illustration, not a real plan. If a plan has a small annual deductible and pays 80 percent coinsurance on physiotherapy, the employee first covers the deductible out of pocket, and after that the plan pays 80 percent of each eligible visit until the annual maximum is reached. The rest is the employee's share. A co-payment is different again: it is a fixed dollar amount per service, such as a set fee per prescription.

The actual numbers depend on the contract. An advisor can explain how these pieces work together in your current plan, or in a quote you are comparing. Our guide to comparing group benefits quotes shows where to find them.

A to C

From accidental death to critical illness. Terms that describe how plans start, who can help you set one up, and how claims get paid.

• Accidental death and dismemberment (AD&D): Insurance that pays a set benefit if a covered person dies or suffers a specific serious injury, such as loss of a limb or sight, because of an accident. It usually sits alongside group life insurance.
• Actively at work: A common plan condition requiring an employee to be working their regular duties on the day coverage would start. Someone off sick on that date may have their coverage start delayed until they return.
• Adjudication: The insurer's review of a claim to decide whether it is eligible under the contract and how much will be paid.
• Administrative Services Only (ASO): An arrangement where the employer pays the actual cost of claims and pays an insurer or administrator a fee to process them. See ASO plans.
• Advisor (benefits advisor or broker): A licensed professional who helps employers design, market and renew a group plan. In Ontario, people who sell accident and sickness insurance must hold a licence issued by FSRA.
• Annual maximum: The most a plan will pay for a benefit, or a group of benefits, in a plan year. Dental and paramedical benefits often have annual maximums.
• Assignment of benefits: An arrangement that lets a provider, such as a dentist or pharmacy, bill the insurer directly so the plan member does not pay the full amount up front.
• Assuris: An independent, not-for-profit organization that protects Canadian policyholders if their life or health insurance company fails. Life and health insurers operating in Canada are required to be members.
• Basic dental: Routine restorative care such as fillings, simple extractions and some periodontal work. Exactly what counts as basic varies by plan.
• Beneficiary: The person or estate named to receive a life insurance or AD&D benefit when the insured person dies.
• Benefits booklet: The plain-language summary given to employees that explains what the plan covers, limits and how to claim. The master contract is the governing document.
• Benefits year (plan year): The 12-month period used to track maximums and deductibles. It may follow the calendar year or the policy anniversary.
• Broker of record: The advisor or firm an employer formally names to act on its behalf with an insurer. Changing it is usually done with a signed letter to the insurer.
• Capital accumulation plan (CAP): A workplace savings plan where members make investment decisions, such as a group RRSP, DPSP or defined contribution pension.
• Carrier: Another word for the insurance company that underwrites a group plan.
• Certificate number (plan member ID): The identifier printed on a plan member's benefits card and used when submitting claims.
• Claims experience: The history of claims paid under a group plan. Larger plans are often priced partly on their own claims experience.
• Co-payment (co-pay): A fixed amount the plan member pays each time they use a service, such as a set fee per prescription, with the plan paying the rest of the eligible amount.
• Coinsurance: The percentage of an eligible expense the plan pays, for example 80 percent. The plan member pays the remaining share.
• Conversion privilege: An option that lets someone leaving a group plan convert some coverage, often life insurance, to an individual policy without new medical evidence, within a set time limit.
• Coordination of benefits (COB): The rules that decide which plan pays first when a person is covered by more than one plan, such as their own plan and a spouse's. See how coordination of benefits works.
• Critical illness insurance: Coverage that pays a lump sum if a covered person is diagnosed with a covered serious illness and meets the policy conditions.

D to F

Deductibles, dependants, disability and drug plans. Tax and payroll rules can change, so as of October 2026 treat anything tax-related here as a starting point and check the current CRA and Government of Ontario rules or ask an advisor.

• Deductible: A set dollar amount the plan member pays before the plan starts reimbursing eligible expenses in a benefits year.
• Deferred profit sharing plan (DPSP): An employer-funded retirement savings plan registered with the CRA, where contributions are linked to company profits. See DPSPs.
• Defined contribution pension plan (DC plan): A registered pension plan where the contributions are set and the retirement income depends on how the investments perform.
• Dental fee guide: A schedule of suggested fees for dental procedures, published by a provincial dental association, that many plans use to set the maximum eligible amount for each service.
• Dependant: A person, typically a spouse or child, who meets the plan's definition and can be covered under an employee's plan. See dependent coverage.
• Dependent life insurance: A small life insurance benefit paid to the employee if a covered spouse or child dies.
• Dispensing fee: The pharmacy's professional fee for filling a prescription. Some plans cap the dispensing fee they will reimburse.
• Drug formulary: The list of medications a plan covers. Formularies can be open (most prescription drugs) or managed (a narrower list).
• Elimination period (waiting period for disability): The time a person must be disabled before disability benefits begin.
• Employee assistance program (EAP): A confidential service, usually by phone, video or in person, that offers short-term counselling and support for personal and work issues. See employee assistance programs.
• Employee contribution: The portion of the premium paid by employees, usually through payroll deductions.
• Employer Health Tax (EHT): An Ontario payroll tax paid by employers on remuneration. Ask an advisor or accountant how benefits fit into your EHT calculation under the current rules.
• Enrolment: The process of signing employees and their dependants onto the plan, usually through an online portal or paper forms.
• EI premium reduction: A federal program that can lower an employer's Employment Insurance premiums if it offers a qualifying short-term disability plan.
• Evidence of insurability (EOI): Health information an insurer may require before approving coverage above a certain amount or for someone who enrols late.
• Exclusion: A situation, service or condition the plan does not cover.
• Experience-rated plan: A plan whose renewal pricing reflects the group's own claims history. See pooled vs. experience-rated plans.
• Extended health care (EHC): Coverage for health costs that provincial plans do not fully pay, such as prescription drugs, paramedical services and medical equipment.
• Flexible benefits (flex plan): A plan that lets employees choose among coverage options or levels, often using credits.
• Fully insured plan: A plan where the employer pays a set premium and the insurer takes on the risk of claims costs.

G to K

Group retirement and savings terms, life insurance basics and how health spending accounts fit in.

• Generic substitution: A plan rule that reimburses based on the lower-cost generic version of a drug when one is available.
• Grandfathering: Allowing existing members to keep an older plan rule or level of coverage when the plan changes for new members.
• Group plan: An insurance contract that covers a defined group of people, such as a company's employees, under one master policy.
• Group RRSP: A workplace registered retirement savings plan that employees contribute to through payroll, sometimes with an employer match.
• Group TFSA: A workplace tax-free savings account offered through payroll deductions.
• Group term life insurance: Life insurance that pays a benefit if a covered employee dies while insured. Employer-paid premiums are generally a taxable benefit to the employee.
• Guaranteed issue (non-evidence maximum): The amount of coverage each eligible employee can get without providing evidence of insurability.
• Health spending account (HSA): An employer-funded account that reimburses eligible medical and dental expenses. See health spending accounts.
• Hospital coverage: A benefit that pays for some hospital costs not covered by the provincial plan, such as a semi-private room.
• Insurer: The licensed company that issues the group contract and pays claims under it.
• Late applicant: An employee who enrols after the initial eligibility window and may need to provide evidence of insurability.

L to O

Spending accounts, disability definitions and the public plans group benefits are built around. For the gaps OHIP leaves, see what OHIP does not cover.

• Lifestyle spending account (LSA): An account the employer funds for broader wellness or lifestyle expenses, such as fitness or equipment. Sometimes called a wellness spending account. Its tax treatment differs from an HSA, so check the current CRA rules. See lifestyle spending accounts.
• Lifetime maximum: The most a plan will pay for a benefit over a person's lifetime, common for orthodontics.
• Long-term disability (LTD): Insurance that replaces part of a person's income when a disability lasts beyond the short-term period. See long-term disability.
• Major dental: Complex restorative work such as crowns, bridges and dentures. Plans often reimburse at a lower percentage than basic services.
• Mandatory participation: A rule requiring all eligible employees to join certain benefits, unless they qualify for a waiver.
• Master contract (master policy): The legal contract between the employer and the insurer that sets out exactly what the plan covers.
• Offset: A reduction in disability benefits by income from other sources, such as CPP disability benefits.
• OHIP: The Ontario Health Insurance Plan, which covers many medically necessary services for eligible residents. Group plans are designed to fill gaps it leaves.
• OmbudService for Life and Health Insurance (OLHI): An independent service that helps consumers resolve complaints with life and health insurers.
• Optional life insurance: Extra life coverage employees can buy for themselves or a spouse, usually paid by the employee.
• Orthodontics: Treatment to straighten teeth, such as braces. It is often an optional benefit with a lifetime maximum and age limits.
• Out-of-country coverage: Emergency medical coverage while travelling outside Canada, usually as part of extended health care. See group travel medical insurance.
• Own occupation and any occupation: Disability definitions. Own occupation means unable to do your own job. Any occupation means unable to do any job you are reasonably suited for. Many LTD plans switch from one to the other after a set period.

P to R

Plan roles, pricing terms and renewal language. The Ontario retail sales tax rate on group premiums is set by the province and was 8 percent as of October 2026, according to the Ontario Ministry of Finance.

• Paramedical services: Practitioners such as massage therapists, physiotherapists, chiropractors and psychologists. See paramedical coverage.
• Pay-direct drug card: A card that lets members pay only their share of a prescription at the pharmacy.
• Plan administrator: The person at the employer who manages day-to-day plan tasks such as enrolments and terminations.
• Plan member: An employee covered under the group plan.
• Plan sponsor: The employer or organization that offers the group plan.
• Pooled benefits: Coverage where a small group's risk is shared with other small groups, so one large claim affects rates less. See pooled plans.
• Pooling charge: The fee an experience-rated plan pays to protect itself against very large claims.
• Pre-determination (pre-authorization): A request to the insurer, before treatment, to confirm how much it will pay for an expensive service such as major dental work.
• Pre-existing condition limitation: A clause, common in disability and some optional benefits, that limits coverage for conditions treated before coverage began.
• Premium: The amount paid to the insurer for coverage, usually billed monthly.
• Private health services plan (PHSP): The CRA term for a plan that covers medical and hospital expenses on an insurance-like basis. Employer-paid PHSP premiums are not a taxable benefit when the plan meets CRA conditions.
• Rate guarantee: The length of time an insurer agrees not to change rates. The length is set in the contract or quote.
• Reasonable and customary: The usual fee for a service in an area. Plans may limit reimbursement to this amount.
• Retail Sales Tax (RST) on group premiums: Ontario applies retail sales tax to group insurance premiums and some benefit plan contributions.
• Renewal: The yearly review of rates and plan terms. See renewal reviews.

S to Z

From short-term disability to wellness accounts. If a term on your renewal or booklet is not here, the master contract or your advisor is the best place to check.

Ready to put the vocabulary to work? Get matched with a licensed benefits advisor who can walk you through your plan or a new quote, term by term.

• Short-term disability (STD): Income replacement for a temporary illness or injury, before LTD would start. See short-term disability.
• Single, couple and family coverage: Coverage tiers that set premiums by who is covered: the employee alone, the employee plus one, or the employee plus family.
• Spending account: A broad term for HSAs and LSAs, where the employer sets an amount employees can claim against.
• Stop-loss insurance: Protection an ASO plan can buy to limit the employer's cost from very large claims.
• Survivor benefit: Continuation of health and dental coverage for a deceased employee's dependants for a set period, in some plans.
• Target loss ratio: The share of premiums an insurer expects to pay out as claims. It affects renewal pricing for experience-rated plans.
• Taxable benefit: A benefit whose value is added to an employee's income for tax purposes, such as employer-paid group term life premiums.
• Termination of coverage: The date coverage ends, for example when employment ends or someone reaches a plan age limit.
• Third-party administrator (TPA): A company that administers benefits or spending accounts on behalf of an employer or insurer.
• Underwriting: The insurer's process for assessing risk and setting rates and terms.
• Utilization: How often members use a benefit. High utilization can raise renewal rates.
• Virtual care: Medical or mental health appointments delivered by phone, video or chat. See virtual care benefits.
• Vision care: Coverage for glasses, contact lenses and sometimes eye exams, often with a maximum over a set number of years.
• Waiting period: The time a new employee must work before becoming eligible for benefits. See waiting periods.
• Waiver: A form an employee signs to decline coverage, often because they are covered under a spouse's plan. See waiving benefits.
• Waiver of premium: A provision that keeps life or disability coverage in force without premiums while a member is disabled.
• Wage loss replacement plan (WLRP): The CRA term for a disability income plan. How benefits are taxed depends on how the plan is funded, so check the current CRA rules or ask an advisor.
• Wellness spending account (WSA): See lifestyle spending account. Rules on eligible expenses vary by plan.

Common questions

What is the difference between coinsurance and a deductible?

A deductible is a fixed dollar amount the member pays before the plan starts reimbursing in a benefits year. Coinsurance is the percentage of each eligible expense the plan pays after that, such as 80 percent. The amounts vary by plan, so check your benefits booklet or ask an advisor.

Is a co-payment the same as coinsurance?

No. A co-payment is a fixed dollar amount per service or prescription. Coinsurance is a percentage of the eligible cost. Some drug plans use one, some use the other, and a few combine them.

Which document actually decides what my plan covers?

The master contract between the employer and the insurer governs the plan. The employee benefits booklet summarizes it in plain language. If they ever seem to conflict, ask the plan administrator or the insurer to confirm.

Are employer-paid benefits taxable in Canada?

It depends on the benefit. As of October 2026, the CRA says employer-paid premiums for a qualifying private health services plan are not a taxable benefit, while employer-paid group term life premiums generally are. See our guide to benefits taxation and check the current CRA rules.

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