What is supplemental health insurance and how does it work?

Supplemental health insurance, also called personal health insurance, can fill gaps in provincial health coverage. While government health plans cover medically necessary services, they typically don't cover some prescription drugs, dental care, vision care, physiotherapy, and other health-related expenses.

Think of it as a financial safety net. Just as you wear a seatbelt to protect yourself in a car crash or get regular medical checkups to catch health issues early, supplemental health insurance helps protect your financial security from the impact of illness or injury.

But protection from supplemental health insurance isn’t always easy to figure out. Understanding how it works can help you decide whether to buy coverage or how much you need. Here are answers to some common questions.

Key takeaways

• Evaluate your current coverage first – Review what your employer group plan (or spouse's) already covers before adding supplemental health insurance to identify gaps rather than duplicating existing benefits
• Consider supplemental health coverage during major life and employment transitions – Key moments include starting a new job without benefits, becoming self-employed, growing your family, preparing for retirement, or losing group coverage
• Sun Life offers three tiers of personal health insurance to match different needs and budgets – The Basic plan provides affordable coverage, the Standard plan is the most popular with comprehensive benefits, and the Enhanced plan offers maximum coverage including restorative dental and private duty nursing
• Get a personalized quote to understand your costs – Premiums vary significantly based on your age, health history, location, occupation, and chosen coverage level, so requesting an individualized quote is the best way to find the right balance between cost and protection for your situation

Check what your group plan might already cover first

Before adding supplemental coverage, it can help to look at what your current group plan - or your spouse's or common-law partner's - already covers.

Many group benefits booklets list reimbursement percentages and annual maximums for prescription drugs, dental care, and other common expenses. Reviewing this first can help you see where the gaps are, if any, so any additional coverage you consider fills those gaps instead of duplicating what you already have.

Enhanced plan: The most coverage

Our most comprehensive plan offers the highest drug coverage limits, vision care, and optional restorative dental and orthodontics:

• Prescription drugs: 80% reimbursement for the first $5,000, then 100%, up to $250,000 annually
• Dental care: 80% preventive (optional), plus 50% restorative and 60% orthodontics
• Supplemental healthcare: 100% reimbursement (higher limits than Standard)
• Paramedical practitioners: 100% reimbursement, up to $400 per year per type
• Vision care: 100% reimbursement, $300 every 2 years
• Emergency travel medical: $1 million lifetime maximum, first 60 days of trip
• Private duty nursing: 100% reimbursement, up to $10,000 annually

Best for: Those without employer benefits or seeking maximum coverage

Learn about our Enhanced plan

View sample contract - Enhanced plan

What can affect your supplemental health premiums?

The cost of supplemental health insurance depends on several factors, including your age, the level of coverage you choose, and your health history. Higher coverage limits and additional benefits like enhanced dental or vision care typically come with higher premiums. Your location and occupation may also influence rates in some plans.

Since these factors vary significantly by individual, the best way to understand your costs is to request a personalized quote. When reviewing options, consider comparing different coverage levels to find the right balance between premium cost and the protection you need for your family.

How are supplemental health premiums treated for tax purposes?

Tax treatment for supplemental health insurance premiums depends largely on how your coverage is set up. Premiums paid through a group plan at work may be deducted pre-tax from your paycheck, reducing your taxable income. Conversely, premiums you pay personally or through a business may be handled differently for tax purposes.

Additionally, premiums funded through a Health Savings Account (HSA) or flexible spending account (FSA) may qualify for special tax advantages. Since tax rules vary by jurisdiction and can change, it's important to speak with a tax professional about how your specific situation may be affected and what deductions or credits you may be eligible for.