Benchmarking Your Group Benefits Plan – Data-Driven Insights for Smarter Design

Executive Summary

In the Canadian benefits market, you can’t manage what you don’t measure—and that’s exactly why plan benchmarking has become a core discipline for forward-thinking HR and Finance leaders.

Without regular benchmarking, employers risk:

• Overpaying for insurance and administration

• Offering outdated or uncompetitive plan designs

• Missing out on innovations peers are already using

• Facing retention challenges from benefits gaps

In this article, we’ll break down:

• What to benchmark (plan design, pricing, utilization, governance)

• How to access credible market data

• Benchmarking methods for small, mid-size, and large employers

• Key metrics for health, dental, disability, and paramedical

• How to use benchmarking to drive plan redesign and insurer negotiations

• Common mistakes to avoid

1. What Is Benefits Benchmarking and Why It Matters

Benefits benchmarking is the process of comparing your group insurance plan design, pricing, and performance to relevant peer groups.

Why it matters:

• Ensures competitiveness in recruiting and retention

• Supports cost governance by identifying overspending

• Highlights innovation gaps before they impact culture

• Strengthens negotiation leverage with insurers

2. Four Types of Benchmarking Data

1. Plan Design Data – What benefits, coverage levels, and limits are typical in your market

2. Pricing Data – Premium rates, cost per employee, and insurer loadings

3. Utilization Data – How often employees use certain benefits and at what cost

4. Governance Data – Service levels, claims turnaround, reporting quality

3. Plan Design Benchmarks: Core Benefits

4. Pricing Benchmarks: Premiums and Claims Ratios

Key metrics:

• Single health premium: $120–$170/month

• Family health premium: $300–$450/month

• Dental: Single $50–$70, Family $125–$175

• Target loss ratio:

  • Health/Dental: 75–85%

  • LTD: 60–70%

  • Life: 25–35%

If your loss ratio is significantly below benchmark, you may be overpaying.

5. Utilization Benchmarks: What Employees Actually Use

This data guides design changes (e.g., increasing vision coverage if utilization is high and satisfaction is low).

6. Governance Benchmarks: Service Standards and SLAs

Best practice benchmarks:

• Claims turnaround: 95% in under 5 days

• Call centre service level: 80%+ answered in 30 seconds

• Reporting: Quarterly claims/utilization reports

• Renewal delivery: 60+ days before effective date

7. How to Access Benchmark Data in Canada

• Broker/consultant studies (e.g., Gallagher, Mercer, Morneau Shepell, Aon)

• Industry association surveys (CPBI, Benefits Canada)

• Insurer-provided benchmarking (for large clients)

• Peer network comparisons

• Third-party benchmarking tools (some subscription-based)

8. Small vs Large Employer Benchmarking Strategies

9. Using Benchmark Data to Redesign Plans

Benchmark data can help:

• Identify underused benefits (to reallocate budget)

• Add competitive perks missing in your plan

• Adjust coverage levels to match market norms

• Develop flex plan options based on demographic needs

10. Negotiating with Insurers Using Benchmarking Insights

Benchmark data is a negotiation tool:

• Compare proposed rates to market medians

• Challenge insurer trend assumptions

• Leverage loss ratio history vs benchmark

• Show where your plan is less rich than peers to argue for lower rates

11. Common Benchmarking Mistakes

• Using outdated data (>2 years old)

• Comparing against irrelevant peer groups

• Ignoring regional differences

• Failing to update plan design after benchmarking

• Treating benchmarking as one-time instead of annual

Final Thoughts

Benchmarking is not about copying competitors—it’s about informed decision-making.

The best Canadian employers:

• Benchmark annually

• Compare against relevant peers

• Use data to negotiate better terms

• Align plan design with workforce needs

If you haven’t benchmarked your plan in the last 2 years, you’re flying blind—and likely overspending.