Health Insurance
Health insurance is a type of coverage that helps pay for medical and healthcare expenses not fully covered by Canada’s public health system. It protects individuals and families from the high cost of prescription drugs, medical services, and treatments that fall outside provincial or territorial government health plans. Health insurance can be obtained through an employer’s group benefits plan or purchased individually from a private insurer.
How It Works
Canada runs a universal, tax-funded health care system, and eligible residents of a province or territory can apply for public health insurance to access publicly funded services. Under the Canada Health Act, each provincial and territorial plan must cover medically necessary hospital, physician, and certain surgical-dental services, known as insured health services. These public plans cover most core needs such as hospital stays and doctor visits, but they may leave out other care, so workplace or personal health insurance fills the gaps with extras like prescription drugs, dental care, and vision care. With private coverage you usually pay a monthly or yearly premium, and a policy covers the person named on it and may also cover a partner and children under 19, with older children still in school or disabled potentially eligible. Many plans apply a deductible you pay before coverage begins, may reimburse only a percentage of a service rather than the full cost, and most set per-service maximums that limit how much they pay in a given period.
Example:
Picture a salaried worker in Ontario who already has OHIP, which covers medically necessary hospital stays and visits to their family doctor. Their employer also offers a group extended health and dental plan that fills the gaps OHIP leaves out, such as prescription drugs, dental cleanings, and prescription glasses. After meeting any deductible, the plan reimburses a percentage of each eligible claim up to an annual maximum per service, and anything above that maximum stays the employee's own out-of-pocket cost.
What to Watch For:
Private coverage does not always pay for everything, so read a personal policy closely to learn whether the insurer only reimburses a percentage of each claim and whether it covers only a maximum annual amount. A plan may also have a deductible you pay before coverage kicks in, may cover the full cost of a service or only a percentage, and most set per-service maximums that limit how much they pay in a period, so the actual amount you can claim back may be smaller than expected. It also helps to confirm who is covered, since a policy may include a partner and children under 19, with children over 19 still in school or disabled potentially eligible. One added benefit of an employer plan is tax treatment, as medical expenses paid under a private health services plan are not a taxable benefit to the employee, and the CRA considers a plan a private health services plan where 90% or more of the premiums relate to medical expenses eligible for the medical expense tax credit.
