The competition for top talent extends north of the U.S. border for many companies. With one-third of the Canadian workforce employed by multinational companies, this highly motivated workforce is crucial to the success of many organizations.
Addressing market-specific, cross-border employee benefit needs and expectations of these workers, however, is also a top priority for brokers and their clients.
While most brokers recognize that Canada provides universal healthcare through its provinces, the practical implications for cross-border benefit strategies go well beyond medical coverage.
“The biggest challenge for employers to overcome is understanding they can't just pick up their benefit plans for U.S. employees and implement them in Canada,” says Tat Winnington, Vice President of Sales and Partnerships for Sterling Brokers. “Brokers add value by tapping into local advisors and third-party administrators to help clients ensure their benefits offering is competitive in the Canadian market.”
To optimize cross-border benefit strategies, brokers must navigate fundamental differences in supplemental benefit priorities, costs and administrative needs.
Supplemental benefits address unique workforce needs
While Canada’s universal healthcare covers core medical services like doctor visits and hospital stays, the coverage does not include prescription drugs, medical services and supplies, dental, vision or disability. Most employers provide supplemental benefits to help employees manage the costs of these services. Providing these supplemental benefits is crucial for attracting and retaining talent in Canada.
Employers are also likely to round out their benefits offerings by providing life insurance benefits for employees and dependents along with travel insurance for both business and personal travel. Beyond these standard supplemental benefit categories, Canadian employees expect their benefits packages to include paramedical coverage for various physical and mental health services such as physiotherapy, chiropractor, social worker, psychologist and more.
“Paramedical coverage is a big driver of employee satisfaction in the Canadian market,” Winnington explains. “Typically, paramedical benefits provide a per-person allocation to spend on services like massage therapy, physiotherapy, chiropractic care, nutritional counseling and psychotherapy.”
Reduced medical costs reinforce the need for benchmarking
Canada’s universal healthcare system reduces overall medical care costs. As a result, the premiums for life and disability insurance are often considerably lower.
While lower costs can reduce a company’s benefits budget, Winnington points out the need for benchmarking to ensure plan designs are competitive in the Canadian market based on company size, industry and geography. Benchmarking looks at current contributions and assesses the plan’s ability to evolve to the intended level. Because of the lower premiums, many employers offer richer plans, such as coverage for 75% of earnings for disability insurance or higher employer-funded life insurance amounts.
Brokers lead the way on administration technology
The Canadian system’s mandatory benefits enrollment process creates unique administrative needs. Unlike U.S. plans that require annual open enrollment periods, Canadian employers only have to make coverage updates after the initial implementation for new hires, terminations or as employees experience life events.
As a result, Canadian insurance carriers are less likely to have robust digital enrollment and service technologies, making employee benefit management a largely manual and paper-based process for client administrators.
Instead, brokerage firms and third-party administrators are driving technological innovation with administrative platforms that offer agile enrollment across multiple carriers and direct carrier integrations that streamline implementation and ongoing eligibility updates. For example, Sterling Brokers offers a 100% digital employee enrollment experience and a platform for benefits administration that integrates with payroll/HRIS providers and carrier partners. Unique in the Canadian market, the offering reduces administrative burden by providing clients with a single point of data entry for their employee benefit plans.
Local partnerships bolster client relationships
Navigating the Canadian benefit market requires specialized knowledge to ensure compliance and the best possible coverage for employees.
“Partnering with a local brokerage firm is key,” says Winnington. “We’re able to evaluate the U.S. benefits plan and recommend comparable options for Canadian employees based on different market expectations and regulations. We also help our broker partners avoid potential pitfalls to deliver competitive benefits that attract and retain employees.”
The differences in Canada's benefits landscape, from unique supplemental benefits priorities to lower cost structures and distinct administrative requirements, underscore the value of strong local partnerships in successful cross-border benefit strategies.
For more information about Sterling Partners check out our booth at the 2025 BenefitsPRO Broker Expo happening May 6-8 in Boston. To book an appointment or to find out more visit our website.
Ann Clifford is a freelance writer who translates her background in financial services marketing into specialized content focused on employee benefits and small business topics.
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