Broker’s View: Don’t rely on employers for health/life coverage

by David Keelaghan13 Nov 2017
The Sears Canada bankruptcy has brought workplace benefits into the spotlight in a major way. The retailer’s employees losing their health/life insurance has caused many to consider their own circumstances. Many, but not nearly enough, believes Ken MacCoy, broker with RitePartner Financial Services.

“The problem is the average worker does not know a lot about insurance – they have group insurance and think that everything is good, but you can never depend on group insurance.”

The Sears case has brought home the message that assuming workplace benefits are guaranteed is to folly. The thought of such an iconic retailer going out of business 10 years ago would have been unthinkable, but that’s the business environment we find ourselves in today. The Amazon Effect has been devastating for a whole host of firms, so the prospect of further bankruptcies looms large. Such a likelihood means workers need to act proactively when it comes to their own benefits, explains MacCoy.

“What happens if the company goes down? As we have seen here (with Sears),” he says. “The government isn’t really protecting people and employers really don’t care. But the real problem is employees are too dependent on group insurance. Having personal coverage and savings is important.”

The dispute with the Sears Canada workers has dominated headlines, but it’s far from an isolated case. Speaking to LHP last week, NDP MP Scott Duvall outlined how prevalent it was for employees to be left in the lurch when a company goes broke. In MacCoy’s opinion, it emphasises the need for individuals to organize their own health and life coverage.

“If you work for the government, you will always get your money, but if you work for a private company, there’s no guarantees,” he says. “Also, what is not guaranteed is good health. But you can go in and get personal coverage – Edge Benefits does a plan where even if you are on group benefits, you can get coverage limited issue.”

Life insurance prevalence rates have been declining for years now, but with the working environment in a state of flux, people really need to organize their own policies outside of employer direction, adds MacCoy.

“Life insurance, people should start early because there are no guarantees they will still be in the same job,” he says. “It’s the same thing with retirement income – you will never has as much money as you had when you were working so having personal savings makes sense.”

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