Jackson And Associates
Current Trends

Alberta Genric Drug Pricing Changes

Effective March 15, 2013, the Minister of Finance for Alberta stated generic drugs, formerly priced at 35% of the corresponding brand name drug, will be priced at 18%. These changes apply to both public and private plans and the actual price changes will occur May 1, 2013.

Health and Safety Training in Ontario

By January 1, 2014, Ontario employers will be required to ensure all workers and supervisors in all workplaces covered by the Occupational Health and Safety Act receive mandatory health and safety awareness training.

The Ontario Ministry of Labour is developing an e-learning module that workers and supervisors can take to complete the orientation. The material for workers is already available and is called Worker Health and Safety Awareness in 4 Steps. Copies can be ordered at www.publications.serviceontario.ca and then searching for "worker awareness".

The supervisor materials are called "Supervisor Health and Safety Awareness in 5 Steps" and will be available soon.

Employee Absence Costs Rise

According to research by Group Risk Development, more employers are paying attention to employee absence. The majority (82%) are proactive in recording, monitoring and managing absences. Currently 27% of respondents publish their results in an annual report while 48% are intending to do so.

The average cost of employee absence (as a percentage of payroll) has increased from 2 and 2.5% over the three year period 2009-11 to 3.1% in 2012. The top reasons for absences in excess of 4 weeks are acute medical conditions, which represents 21.9% of total absence costs, stress-related mental health tied with musculoskeletal, both at 12.5% and home/family issues at 7.4%.

The fact absences are now being tracked and data complied suggests strategies for managing these costs will take a higher profile among employers.

Group Benefit Plan Cost Drivers

Based on findings from the Conference Board of Canada, benefit costs escalated an average of 6.2% between 2010-2011. Contributors include:

  • About 63% of insureds demonstrating three or more unhealthy behavioural patterns relating to physical activity, tobacco use, daily fruits and vegetable intake, hours of sleep and maintaining a healthy weight (based on 2010 Sun Life Canadian Health Index)
  • In 2011, 50% of insureds were taking three or more medications at once and 7% were taking seven or more (IMS Brogan)
  • Cost of absenteeism is $572 per employee per year according to the Conference Board of Canada with 73% of absences due to employee illness or disability

In the 2012 Sanofi Health Survey, 37% of employees indicated a willingness to pay more in order to maintain their benefits. A solution to ensuring these highly valued benefits are properly used to promote a healthy employee and workplace is effective communication.This should include a focus on wellness and certainly the effective use of programs through an Employee and Family Assistance Program.

Effective Tools for Managing Drug Plan Costs

There are a number of tools available to plan sponsors to help them comprehend and effectively manage drug plan costs.

With the continuing advancements in electronic processing of drug claims, the plan sponsor has the ability to develop and maintain sophisticated plan designs. These can include multiple tiered plans where 100% reimbursement is provided for a generic drug while only 50% reimbursement is available to someone buying a brand name drug.

Along the same lines, the drug benefit can mandate the use of generics even if a brand name is prescribed. These types of plans usually have a provision that a brand name can be used if the generic drug has not been effective or has caused an adverse reaction.

There are now pharmacy networks available — Costco, Loblaw Companies and Jean Coutu are all examples — that not only have lower than average dispensing fees but also offer new services and offerings that can add value and ultimately control costs. These include dietary services and diabetes management.

A review of the drug plan utilization in conjunction with other cost drivers under the benefit can aid an employer in designing a drug benefit that can now be adequately supported through technology and networks.