The Employer's Guide to LMIA + Health Insurance Compliance
What would happen if government inspectors showed up at your door tomorrow, asking for proof of health insurance for your foreign workers?
If you're like most Canadian employers navigating the LMIA process, it’s easy to overlook one critical detail that could cost you more than you expect: mandatory health insurance coverage.
Canadian employers must purchase and fully pay for private health insurance for every LMIA-based temporary foreign worker from day one of their arrival.
Miss this requirement, and you're looking at fines up to $100,000 per violation and potential bans from hiring foreign workers. So, how can you make sure your company is protected?
What Is LMIA?
A Labour Market Impact Assessment (LMIA) confirms you've demonstrated a genuine need for foreign workers and couldn't find qualified Canadians for the position. It allows you to hire a temporary foreign worker for a specific job, and they can only work for the employer and in the position specified on their work permit.
But getting that positive LMIA is just the beginning of the process.
You'll need to advertise positions for at least four weeks on Job Bank and other platforms while proving your recruitment efforts to find Canadian workers. There's the $1,000 processing fee per position to consider, along with meeting prevailing wage requirements.
And don't forget, you must maintain detailed records for six years after hiring!
But here's what catches employers off guard: health insurance isn't optional—it's a mandatory condition of your LMIA approval.
A Hidden Health Insurance Trap
Here’s a scenario that may hit close to home.
You've successfully recruited skilled greenhouse workers from Mexico. They arrive eager to work, but Ontario's 3-month waiting period means they won't have provincial coverage until late summer.
During that gap, who's responsible if someone needs emergency surgery?
You are – completely.
The regulations leave no room for interpretation. Employers must provide private health insurance from the moment workers arrive until provincial coverage begins.
Plus, the coverage must include emergency medical care, hospital services, and repatriation if medically necessary. Employers can’t deduct these costs from workers' wages.
In some provinces, like Quebec, your insurance must be equivalent to provincial standards for certain worker categories.
What Inspectors Look For
When ESDC conducts compliance reviews, it digs deep into your documentation. They're not just checking if you have insurance, but verifying every detail of your coverage.
Inspectors will demand proof of insurance purchase and confirm coverage started on the exact arrival date with no gaps in protection.
You'll need evidence showing you paid 100% of premiums without any wage deductions. Your records must demonstrate continuous coverage throughout the provincial waiting period.
The coverage itself faces scrutiny, too.
Does it include emergency medical and hospital care?
Are prescription medications covered?
What about repatriation if medically necessary?
In Quebec, does it meet RAMQ equivalency requirements for applicable workers?
Provincial Variations Add Complexity
Each province operates under different rules, creating a compliance maze for employers with workers across Canada.
Ontario and British Columbia impose a three-month waiting period before provincial coverage kicks in.
Alberta and Manitoba often provide immediate coverage if workers meet eligibility requirements.
Quebec has specific requirements for coverage equivalent to its provincial plan, while Atlantic provinces generally offer immediate coverage.
This patchwork system means a one-size-fits-all approach to insurance might fail insurance reviews. What works for your workers in Calgary won't necessarily meet requirements in Toronto or Montreal.
Protecting Your Employees Goes Beyond Basic Compliance
Smart employers recognize that minimum compliance isn't enough. Inadequate coverage costs your business more than you might expect.
When a worker needs emergency care, you're looking at $3,000 or more per day for hospital services alone. Then add in prescription medications and potential medical repatriation expenses, and the numbers become staggering. But those are just the direct costs.
The indirect costs often hurt more. You'll spend thousands recruiting and training replacements when workers leave due to inadequate protection.
Plus, your reputation in foreign worker communities will suffer, and in tight-knit communities, word spreads quickly.
Soon, you're struggling to attract quality candidates while competitors with comprehensive coverage have their pick of skilled workers. The administrative burden of managing claims and dealing with coverage gaps drains resources from productive activities.
FWCHP Makes Compliance Simple
More Canadian employers are moving to specialized solutions like the FWCHP.
Unlike generic insurance products retrofitted for foreign workers, the FWCHP provides immediate protection from day one of arrival, eliminating any coverage gaps that could trigger compliance issues.
The comprehensive coverage includes life insurance protecting families back home, income replacement during illness or injury, and full health coverage meeting all provincial requirements.
Most importantly, the FWCHP provides the compliance documentation inspectors require, formatted exactly as ESDC expects. No scrambling during audits or wondering if your coverage meets requirements.
Take Action Today to Protect Your Team
Every day without proper health insurance coverage is a day you're risking your entire foreign worker program. While the LMIA process is complex enough, health insurance compliance doesn't have to be.
Contact us today to ensure your foreign worker's health insurance meets all LMIA requirements. Protect your business and support your workers with the FWCHP!
Looking to provide your foreign workers with the necessary healthcare coverage?
Click through the video below to learn about the FWCHP.
