I just finished my probation period and received an email from HR outlining my benefits package. Some of my benefits (including dental and health) show up as 'employee paid benefits' meaning an amount is deducted from my paycheck. These "benefits" will end up deducting around $2000 a year.

I live in Ontario, Canada, and was considering opting out of the health plan, but after re-reading my employment contract it said all benefits are mandatory.

I've worked at 3 other companies in the past and I've never had any money deducted for benefits (except EI and CPP).

Barring the whole shadiness of the process, Are companies even allowed to deduct your paycheck with mandatory benefits? Is this a common practice? It seems to me I should at least be able opt out and that options was not given to me.

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    Possibly off-topic, as it seems to be a legal question? – Time4Tea Jul 10 '18 at 21:00
  • Are you sure they are charging you for mandatory benefits? It would be very unusual. Are they perhaps charging you tax on benefits? – DJClayworth Jul 10 '18 at 21:19
  • You signed the contract that said these benefits are mandatory, right? This isn't some kind of hidden thing? – Erik Jul 10 '18 at 21:20
  • Where I work, an employee does pay (a pretty small) part of the health insurance. But, one can opt out, and are then responsible for getting your own health coverage. But, it is conceivable that the company got a deal with an insurer that required 100% participation, perhaps in exchange for a better rate. Double check with HR. – Jon Custer Jul 10 '18 at 21:46
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    When you asked them if you could opt out of these benefits, what did they say? – Masked Man Jul 11 '18 at 0:50

Since you live in Ontario, where going to the doctor and hospital is free, it's likely that this coverage is prescription drugs, glasses, dentist, and disability insurance. In my experience only that last part is employee-paid.

First, why you pay for them: that makes the benefits you get from them (eg replacing most of your salary if you're disabled) non taxable. Since it's not your full salary, this is important: 60% of your income, tax-free, is likely to be a lot closer to your regular take-home than 60% of your income that you have to pay taxes on.

Second, why it's mandatory: the rates are based on average people: if super healthy people, or those without children, or those who already got braces all opted out, the insurance would be processing claims from a larger fraction of the covered people than they expected and calculated for.

Third, are you sure you're really paying for it? When we did this for our staff, let's say a person had a salary of X a month and the insurance cost Y, we would actually pay them X+Y and then deduct Y to pay for the insurance.

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