Canadian Dental Fee Guide Increases for 2019

Each provincial dental association publishes an annual fee guide and dentists use these guides when determining their own fees for the year ahead.

It should be noted that not all Fee Guides have been listed here for the following reasons:

• the Manitoba Dental Association also has a Northern Manitoba Fee Guide which is not listed here
• the Fee Guides have not been released for Nova Scotia but the adjustment listed is what they have announced
• the Fee Guides for Saskatchewan and Yukon have not been released however, in the case for Yukon, the B.C. increases are being used by most insurers

These increases are the overall average increase for all services combined and the actual increases do vary by service. For example, in Ontario the increase for Major Restorative and Orthodontics is 6.36% while the increase for routine services is 3.97%.

Insurers will use these increases when establishing rates for the dental benefit and it’s important to ensure they are aligning the rate increases to the services being claimed under your benefit plan.

Increase in Employment Insurance Maximum

Effective January 1, 2019, the federal government announced an increase in the 2019 employment insurance (EI) maximum insurable earnings amount and a corresponding increase in the EI weekly maximum benefit.

The maximum insurable earnings increases from $ 51,700 to $ 53,100 and the weekly benefit increases from $ 547 to $ 562.

If your Short term Disability plan is self-insured and you participate in the EI premium reduction plan, then you’ll need to ensure the weekly benefit provided is at least $ 562 to remain eligible for the program.

Employer Reactions to CPP Enhancements

The changes to the Canada pension Plan (CPP) did kick in on January 1, 2019. While it’s still early, some of the reactions from employers to date are, in our view interesting.

To help frame their reaction, following are the changes that are being phased in until they are fully implemented in 2025:

• in the first stage, employees and employers will have their CPP contributions increase from the prior 4.95% to 5.95% each by 2023 for a total of 11.9% to the year’s maximum pensionable earnings (YMPE)
• the YMPE is projected to rise from $ 55,900 to $ 72,500 by 2025
• a second phase of the change begins in 2024 when a secondary contribution rate for earnings kicks in up to 14% of the annual YMPE and employees and employers will each be responsible for contributions equal to 4% of earnings over the YMPE

To further illustrate the impact of these changes, for a person earning around $ 83,000 (the expected YMPE in 2025) the employer will pay approximately $ 1,100 more than they do for the same employee in 2018.

A survey of 325 of their clients by AON had the following results regarding employer reactions to these changes:

• 17% of employers are starting to make changes to their pension plans to accommodate the CPP changes
• 37% indicated they expect to start preparing this year
• Only 6% have communicated these changes to employees

As retirement savings plans are part of the overall compensation/reward strategy for an employee, we believe consideration should be given to ensuring these changes continue to fit within the budget percentage of cash compensation designated for benefits and, as a minimum, communicated to employees who are sharing the costs.

Telecommuting Growing in Popularity

According to a survey by IWG, part-time telecommuting is becoming the norm with 50% of Canadian employees working at least 2.5 days a week outside the office. A further analysis indicates 74% of Canadians work away from the office at least one day a week and 20% work offsite every day of the work week.

The Canadian employers in the survey indicated they realized a number of benefits from this approach including business growth (88% of those surveyed), increased profitability (83%), a reduction in real estate costs (81%) and an improved ability to attract and retain talent (71%). The Canadian employees reported a number of benefits as well including reduced commute time (83%), increased productivity (80%), improved work/life balance (75%) while improving their ability to participate in educational events (82%) and make meetings more efficient (52%).

Calculating the Value of Benefits

When an employee is dismissed, it is easy to calculate the value of lost wages for the purposes of severance but there are a few options used to calculate the value of benefits.

Different arguments have been used by employers and employees as to how to properly value lost entitlements. These can generally be placed into three competing approaches, consisting of the following:

Premiums Theory: providing cash in lieu of the employer’s contribution to premiums for the employer’s benefits
Percentage-in-lieu Theory: providing a fixed percentage of base salary in lieu of the lost benefits, and
Replacement Costs Theory: providing evidence of the actual cost of comparable benefits available in the market and ordering payment of this amount to the employee.

Each situation merits a review to ensure it fits the employer and employee goals but the majority fit into these three categories.