The Line-by-Line Breakdown: What You're Actually Paying For in Your Group Benefits Package
Your group benefits broker sends you a quote: $3,847 per month for 10 employees.
You think: "Okay, but what the hell am I actually paying for?"
That's the question nobody answers clearly. You get a benefits booklet with 47 pages of insurance jargon, a premium summary with cryptic line items, and a broker who says "this is a good plan" without explaining what each piece actually costs or does.
Let me fix that.
I'm going to break down a real group benefits quote for a 10-person Ontario company line by line, show you exactly what each coverage component costs, and explain what you're getting for that money. No jargon. No bullshit.
The Sample Company
Let's use a realistic example:
- 10 employees in Burlington, Ontario
- Ages: 28, 32, 34, 38, 41, 44, 48, 52, 54, 56 (average age 42.7)
- Industry: Construction/trades (electrical contractor)
- Coverage: Standard package, not bare-bones but not executive-level
The Total Monthly Premium: $3,421
Here's where every dollar goes:
Extended Health Care: $1,450/month
($145/employee/month)This is your prescription drugs, hospital coverage, medical equipment, and paramedical services.
What's included:
- •Prescription drug coverage: 80% reimbursement after $50 annual deductible
- •Hospital semi-private room
- •Ambulance services
- •Medical equipment and supplies (wheelchairs, diabetic supplies, etc.)
- •Paramedical practitioners: $500 annual maximum combined
Paramedical includes:
What drives this cost:
- •Drug coverage is 70-75% of this premium
- •Paramedical coverage adds ~$15-20/month per person
- •Age matters a lot (older employees = more prescriptions = higher cost)
Reality check: Your 56-year-old foreman with diabetes and blood pressure meds is probably costing $220/month just for health coverage. Your 28-year-old apprentice who takes nothing? Maybe $80/month. That's how risk pooling works.
What most people don't realize: The $50 deductible means your employee pays the first $50 of drug costs each year, then 20% of costs after that. If they fill a $200 prescription in January, they pay $50 (deductible) + $30 (20% of the remaining $150) = $80 out of pocket. The plan pays $120.
Could you save money here?
Total potential savings: ~$38/employee/month = $380/month = $4,560 annually
Dental Care: $780/month
($78/employee/month)This covers routine cleanings, fillings, crowns, root canals, and other dental work.
What's included:
- •Annual maximum: $1,500 per person
- •Basic services (cleanings, fillings, extractions): 80% coverage
- •Major services (crowns, bridges, dentures): 50% coverage
- •Recall cleanings: Every 9 months
- •No orthodontics (braces) included
What drives this cost:
- •Annual maximum ($1,500 vs $1,000 vs $2,000 makes a huge difference)
- •Coverage percentages (80/50 vs 80/60 vs 100/80)
- •Frequency of cleanings (every 6 months vs 9 months vs 12 months)
Reality check: If your employee needs a crown, that's typically a $1,200-$1,500 procedure. With 50% coverage, they're paying $600-750 out of pocket. If they hit their $1,500 maximum early in the year, they're paying 100% for any other work until next January.
What most people don't realize: Dental isn't insurance - it's a cost-sharing arrangement. The $1,500 maximum means that's the MOST the plan will pay per person per year. If your employee has $3,000 in dental work, they're paying at least $1,500 out of pocket no matter what.
Could you save money here?
Total potential savings: ~$43/employee/month = $430/month = $5,160 annually
Long-Term Disability (LTD): $520/month
($52/employee/month)This is your catastrophic income protection. If someone gets seriously injured or sick and can't work for months or years, LTD replaces their income.
What's included:
- •Benefit: 67% of gross salary (up to $3,500/month maximum)
- •Waiting period: 90 days (before benefits start paying)
- •Benefit period: To age 65
- •Definition of disability: "Own occupation" for 24 months, then "any occupation"
What drives this cost:
- •Benefit percentage (60% vs 67% vs 75%)
- •Monthly maximum ($3,500 vs $5,000 vs $10,000)
- •Waiting period (90 days vs 120 days vs 180 days)
- •Industry (construction = higher risk = higher cost)
Reality check: If your electrician making $65,000/year ($5,417/month) gets in a serious accident and can't work, after 90 days he starts receiving $3,500/month (the maximum, even though 67% of his salary would be $3,629). He gets this until age 65 or until he can work again.
What most people don't realize: The 90-day waiting period means your employee needs to survive 3 months with ZERO income before LTD kicks in. That's why short-term disability or sick days matter. Also, "own occupation" means if he can't do electrical work but could theoretically do desk work, he still qualifies for the first 24 months. After that, if he can do ANY job, benefits stop.
Could you save money here?
Total potential savings: ~$18/employee/month = $180/month = $2,160 annually
(But don't do this - LTD is THE most important coverage for construction workers. This is not where you cut costs.)
Life Insurance: $221/month
($22/employee/month)If an employee dies, their beneficiary gets a lump sum.
What's included:
- •Employee life insurance: $50,000
- •Accidental death & dismemberment (AD&D): $50,000
- •No dependent life insurance included
What drives this cost:
- •Coverage amount ($25K vs $50K vs $100K vs 2x salary)
- •Age (older employees = higher premiums)
- •Smoking status (usually not asked for small groups, but matters for large groups)
Reality check: $50,000 isn't a fortune, but it covers funeral expenses ($10,000-15,000) and provides something for the family. Many small businesses offer this amount as a baseline because it's affordable.
What most people don't realize: AD&D only pays if death is accidental (car crash, job site accident, etc.). Regular life insurance pays for any cause of death (heart attack, cancer, etc.). That's why you have both.
Could you save money here?
Total potential savings: ~$15/employee/month = $150/month = $1,800 annually
Employee Assistance Program (EAP): $80/month
($8/employee/month)Confidential counselling and mental health support for employees and their families.
What's included:
- •24/7 crisis phone line
- •Short-term counselling (typically 6-8 sessions per issue per year)
- •Work-life balance resources
- •Legal and financial consultation
- •Wellness resources and online tools
What drives this cost:
- •Number of counselling sessions included
- •24/7 access vs business hours only
- •Quality of provider network
- •Additional services (legal, financial, etc.)
Reality check: Most employees never use their EAP (utilization is typically 3-8%). But when someone needs it - divorce, grief, anxiety, substance use issues - it's invaluable and prevents bigger problems.
What most people don't realize: EAP is confidential. Employer never knows who called or why. You only get aggregate data ("5% of your employees used the EAP this year"). This matters because construction workers won't use it if they think management will find out.
Could you save money here?
(Don't do this. Mental health matters, construction has 4x higher suicide rates, and $960/year is nothing compared to preventing one crisis.)
Administrative Fees: $370/month
($37/employee/month)This is what you pay the insurance carrier to actually run the plan.
What's included:
- •Claims adjudication and processing
- •Customer service for employees
- •Online portals and mobile apps
- •Reporting to employer
- •Regulatory compliance
What drives this cost:
- •Carrier (some charge more than others)
- •Group size (smaller groups = higher per-person admin fees)
- •Plan complexity (more coverages = more admin)
Reality check: You're paying $4,440 annually just for the carrier to process claims and answer questions. For 10 employees, that's relatively high. Larger groups pay $15-25/employee/month because admin is more efficient at scale.
What most people don't realize: This fee exists whether claims are high or low. You're paying it just to have the plan in place.
Could you save money here?
Total potential savings: ~$10/employee/month = $100/month = $1,200 annually
The Total Breakdown
Here's the summary of where your $3,421/month goes:
| Coverage | Monthly Cost | Per Employee | % of Total |
|---|---|---|---|
| Extended Health | $1,450 | $145 | 42.4% |
| Dental | $780 | $78 | 22.8% |
| Long-Term Disability | $520 | $52 | 15.2% |
| Life Insurance | $221 | $22 | 6.5% |
| EAP | $80 | $8 | 2.3% |
| Admin Fees | $370 | $37 | 10.8% |
| TOTAL | $3,421 | $342 | 100% |
Annual cost: $41,052
Key observations:
- •Health care is 42% of your cost - drugs are expensive, especially for aging workforces
- •Dental is almost a quarter of your premium - and employees still pay a lot out of pocket
- •LTD is your third biggest cost - but it's also your most important coverage for construction
- •Admin fees are 11% of your total - that's $4,440/year just for administration
- •Life and EAP combined are under 9% - relatively cheap for the value they provide
How to Use This Information
Now that you know where your money goes, you can make informed tradeoffs:
If you need to cut $500/month from your premium:
Total: $540/month saved
If you want to enhance coverage within budget:
You'd need to find $1,000/month elsewhere or increase budget
If you want to verify you're not overpaying:
Compare each line item against market rates for your group size and age. If your extended health is costing $180/employee when market is $140, you're overpaying $400/month.
The Bottom Line
When you get a group benefits quote, don't just look at the total. Break it down line by line:
Because "group benefits cost $3,421/month" doesn't tell you anything useful. But "extended health is 42% of my cost and here's what I can adjust" gives you actual control over what you're buying and what you're paying.
Ready to Understand Your Actual Costs?
Want to see how this compares to what your 10-person company would actually pay in Ontario? I break down full pricing in this comprehensive guide with real examples for different industries.
Because understanding what you're actually paying for is the first step to making smart decisions about your benefits plan.
Written by: Steffen deGraaf
Group Benefits Consultant, AEC Benefits
Steffen specializes in helping construction and trades companies build cost-effective benefits plans that save money while keeping teams protected and valued. With over 20 years of experience in Ontario's construction industry, he understands the unique challenges business owners face.
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