Independent contractors often face problems when it comes to such useful benefits as life insurance, prescription drug coverage, dental benefits, and more. In fact, companies sometimes favour the hiring of contractors rather than full-time employees. Self-employment and working as a contractor is a growth trend – Intuit did a study that shows it is likely that 45% of Canadians will be self-employed by 2020.
This rising trend will leave many independent contractors on their own when it comes to extended health coverage outside of provincial coverage. The first thing you should do is sign up for EI special benefits for self-employed people – this includes parental, sickness and compassionate care benefits. This is unless you are eligible through the regular program (which covers barbers, hairdressers, taxi drivers and fishermen).
Benefits are expensive for sole proprietors as they are a risk pool of one, which drives up cost, rather than it being spread across a large group of employees. This can also be the case for very small businesses with less than five employees.
The best option for independent contractors is to find a company that specializes in offering coverage to sole proprietors and individual business owners as well as small businesses. These companies offer plans which are designed to be affordable by understanding the specific risks and spreading them across multiple clients. Some of these plans are also ideal if you have a small number of employees. With increasing numbers of working Canadians becoming self-employed, the demand for these plans is likely to increase with more options becoming available.
Make sure you choose a plan that offers the benefits you need for your lifestyle and life stage (whether or not you have children, for example, can change things tremendously). You should also, of course, consider whether the plan expenses are actually less than what you would expect to pay. When doing so, take into account the fact that you can deduct the cost of both medical expenses and your benefit expenses.