Health & Dental Insurance for Contract Workers
Health insurance for contract workers in Ontario: what OHIP leaves out, how individual plans work, indicative monthly costs, and covering gaps between jobs.
If you work on contract, whether through an agency, as an incorporated consultant or as a gig worker with a dozen clients, you almost certainly don’t have employer health benefits. The good news is that the gap is easy to close: individual health and dental plans are designed for exactly this situation, and a basic plan for one adult costs roughly what a phone plan does.
This guide is for Ontario contract workers who want to understand what OHIP leaves out, what an individual plan actually covers, what it costs, and how to structure it so the premium is tax-efficient. It’s also for people who just finished a contract that did include benefits and want to keep coverage without a break.
Why contract workers need their own health insurance in Ontario
OHIP covers medically necessary physician and hospital care. That’s the foundation, and it’s a good one. What it doesn’t cover is most of what you’ll actually pay for in a normal year:
- Prescription drugs outside hospital. Unless you qualify for OHIP+ (under 25 with no private plan), the Ontario Drug Benefit (65 and over) or the Trillium Drug Program (high drug costs relative to income), drugs at the pharmacy counter are your expense.
- Dental. Cleanings, fillings, crowns, root canals. None of it is covered by OHIP for most adults.
- Vision. Routine eye exams for adults aged 20 to 64 and all glasses and contacts.
- Paramedical services. Physiotherapy, massage therapy, chiropractic, psychology and counselling, almost entirely out of pocket outside hospital.
An employee with group benefits rarely thinks about these costs. A contractor pays them directly, and the total surprises people. A single root canal and crown can run well over a thousand dollars; a course of physiotherapy after an injury adds up quickly. Our article on what OHIP does not cover goes through the full list.
There’s a second reason contractors specifically need their own plan: portability. Group benefits belong to the employer, not the worker, so they end with every contract. A plan you own yourself carries across clients and gaps, and you never have to requalify for it.
Two kinds of individual health plans
Insurers sell individual health and dental plans in two broad families. Which one you qualify for, and which one you should pick, depends mostly on your health history.
Guaranteed-acceptance plans
These plans ask no health questions. Anyone who applies is accepted. In exchange, the insurer sets lower drug maximums, may exclude pre-existing conditions for an initial period, and phases in dental coverage over the first year or two (basic services early, major services later).
They suit contractors with an ongoing condition or medication that would be rated or excluded under an underwritten plan, and anyone who has been declined elsewhere. Our guide to guaranteed acceptance health insurance covers the trade-offs in more depth.
Underwritten plans
These plans ask health questions on the application and may request more detail on medications or diagnoses. In return, they offer higher drug limits (often tens of thousands of dollars a year rather than a few thousand), broader dental coverage sooner, and more generous paramedical maximums.
If you’re generally healthy, an underwritten plan is usually better value. If you have a condition that gets excluded, the plan may still be worth having for everything else, but compare it against the guaranteed option.
A third route exists if you just came off a contract that had group coverage: a conversion plan. Most group insurers let departing members switch to an individual plan within a fixed window, commonly 60 days, without health questions. The coverage is usually lighter than the group plan, but it’s a way to keep continuity if your health has changed. We cover the details in how to replace group benefits when leaving a job.
What a contractor’s plan typically covers
Individual plans are sold in tiers. Names vary by insurer (basic/enhanced/premier, bronze/silver/gold) but the structure is consistent. Here’s a representative comparison of what changes between tiers. Limits are typical of the Ontario market, not quotes from any single insurer.
| Coverage area | Basic tier (typical) | Mid tier (typical) | Comprehensive tier (typical) |
|---|---|---|---|
| Prescription drugs | 70–80% reimbursement, low annual cap | 80% reimbursement, moderate cap | 80–90% reimbursement, high cap |
| Dental (basic: exams, cleanings, fillings) | 70–80%, modest annual maximum | 80%, higher maximum | 80–100%, highest maximum |
| Dental (major: crowns, bridges) | Often not included | 50% after a waiting period | 50–60% after a waiting period |
| Vision | Small allowance every 2 years or none | Moderate allowance every 2 years | Larger allowance, plus eye exams |
| Paramedical (physio, massage, psychology) | Low per-practitioner cap | Moderate cap | Higher cap, more practitioners |
| Emergency travel medical | Sometimes included | Usually included | Included, longer trip limit |
| Hospital (semi-private room) | Rarely | Sometimes | Usually |
Two things to look at closely as a contractor:
Drug coverage structure. Some plans pay a percentage with an annual maximum; others use a deductible plus co-pay. If you take a regular medication, do the arithmetic on your actual prescriptions rather than picking by tier name.
Paramedical limits. If you sit at a desk for ten hours a day, physiotherapy, massage and mental health coverage may matter more than dental. Mid-tier plans often set a per-practitioner annual maximum in the few-hundred-dollar range; comprehensive plans go higher. Our article on mental health and therapy coverage explains what to expect for psychology and counselling specifically.
Indicative monthly costs for contract workers
The ranges below are illustrative for Ontario residents under about 55, based on the Canadian individual health and dental market. Actual premiums depend on age, plan tier, deductibles, the insurer, and whether the plan is underwritten or guaranteed acceptance. These are not quotes.
| Who is covered | Basic tier (indicative) | Comprehensive tier (indicative) |
|---|---|---|
| One adult | roughly $60–$90/mo | roughly $100–$150/mo |
| Couple | roughly $120–$170/mo | roughly $190–$280/mo |
| Family (2 adults, children) | roughly $170–$240/mo | roughly $280–$400/mo |
Premiums step up with age, particularly past 55 and 65, and a guaranteed-acceptance plan usually costs a little more than an underwritten plan with comparable limits because the insurer takes on unknown risk. For a broader look at pricing, see our guide to private health insurance cost in Ontario.
A useful way to judge value: add up last year’s dental, drug, vision and paramedical spending. If it’s well under the annual premium and you’re healthy, a basic plan mainly buys protection against an expensive year. If you’re already spending close to the premium, a mid or comprehensive plan will likely come out ahead.
Making premiums tax-efficient: HSA, PHSP and the medical expense credit
How you pay for coverage matters almost as much as what you buy, and it depends on how your contracting is structured.
Sole proprietors and unincorporated contractors. Generally, self-employed Canadians can deduct premiums paid to a private health services plan against business income, within CRA’s limits, provided they meet the eligibility conditions (broadly, that self-employment is your main source of income or your other income is modest). Premiums that don’t qualify for the deduction can usually still be claimed under the medical expense tax credit.
Incorporated contractors. A corporation can set up a Health Spending Account (HSA) or a broader Private Health Services Plan (PHSP). The corporation pays for eligible medical and dental expenses, generally deducts them as a business expense, and the amounts are generally received tax-free by you as the employee. Many incorporated consultants pair a modest insured plan (for catastrophic drug costs and travel emergencies) with an HSA for routine dental, vision and paramedical spending. See our guides to Health Spending Accounts and PHSPs for business owners.
Agency contractors paid as employees. If an agency issues you a T4 without benefits, you’re an employee for tax purposes and the self-employed deduction doesn’t apply, but the medical expense tax credit still does.
The rules have thresholds and edge cases. Confirm the right approach with your accountant before setting anything up, especially if you’re incorporated.
Common mistakes contractors make with health coverage
We see the same handful of avoidable problems:
- Waiting until something hurts. Underwritten plans ask about existing conditions, and guaranteed plans phase dental in over time. Buying while healthy gets you the richest coverage at the lowest price.
- Missing the conversion window. If a contract’s group plan ends, the option to convert without health questions expires quickly, often at 60 days. Put a reminder in your calendar the day the contract closes.
- Assuming travel coverage is included. Some individual plans include emergency out-of-country medical; others don’t, or cap trip length at a few days. If you travel for work or pleasure, check, and read our note on whether OHIP covers travel.
- Ignoring income protection. A health plan pays for treatment. It does not replace income if you can’t work. For most contractors, disability insurance is the more important gap, because there is no sick pay and no employer to bridge you.
- Buying the family plan when a spouse has group coverage. If your partner’s employer plan can add you as a dependant, that’s often cheaper and richer than an individual plan. Coordinate first.
How to choose a plan as a contract worker
A practical sequence:
- List last year’s spending on drugs, dental, vision and paramedical services. This tells you which tier is worth paying for.
- Note your medications and diagnoses. This determines whether an underwritten plan will cover you cleanly or whether guaranteed acceptance makes more sense.
- Decide on structure. Incorporated? Consider an HSA plus a modest insured plan. Sole proprietor? Look at deducting a PHSP premium. T4 agency worker? A straightforward individual plan claimed under the medical expense credit.
- Check the conversion deadline if you’re coming off a group plan.
- Compare across insurers. Plans with the same tier name differ in drug caps, dental waiting periods and paramedical limits. The cheapest premium isn’t always the cheapest year.
Our companion guide to health and dental insurance for the self-employed in Ontario covers the broader picture for people running a business rather than working contract to contract.
How Hayes can help
We’re an independent brokerage in Ottawa, and we compare individual health and dental insurance plans from Canada’s major insurers for contractors across Ontario. We’ll tell you which tier matches your actual spending, whether an underwritten or guaranteed plan is the better fit for your health history, and how to structure the premium so you’re not overpaying tax. Our advice costs you nothing; insurers pay us.
Between contracts, or starting a new one without benefits? Get a free health and dental quote and we’ll send options the same day, or contact us if you’d rather talk it through first.
Frequently asked questions
Do contract workers get health benefits in Ontario?
Usually not. Most fixed-term and independent contracts pay a higher rate in exchange for no benefits, though some agencies and longer contracts do include a group plan. If yours does not, you rely on OHIP for doctors and hospitals and pay out of pocket for drugs, dental, vision and paramedical care unless you buy an individual plan.
How much is private health insurance for a self-employed contractor?
Indicatively, a basic individual health and dental plan costs roughly $60–$90 a month for one adult, and a comprehensive plan with higher drug and dental limits roughly $100–$150. Couples run about $120–$280 and families $170–$400. These are illustrative ranges; your premium depends on age, plan design, deductibles and the insurer.
Can I deduct health insurance premiums as a contractor?
Generally, self-employed Canadians can deduct premiums paid to a private health services plan against business income, subject to CRA limits, and anyone can claim eligible premiums under the medical expense tax credit. Incorporated contractors can often set up a Health Spending Account through the corporation. Confirm the approach that fits your structure with an accountant.
What happens to my benefits between contracts?
Group benefits attached to a contract end when the contract does. If you had group coverage, ask about converting to an individual plan within the insurer's conversion window, usually 60 days, which avoids health questions. Otherwise, an individual plan you own yourself continues regardless of who your client is.