Jackson And Associates
Current Trends

Group Benefits

Technology’s Impact on Group Benefits

The Sanofi Canada Health-care Survey indicates a trend by plan sponsors, insurers and third-party administrators to provide plan members with a consumer-grade experience by doing away with the traditional benefit booklet in favour of providing the plan member with information at the exact moment they need it and using their personal claims data to nudge them to healthier choices.

The survey also indicated:

  • 62% of plan members would consent to receive targeted health-related information from their benefits provider (this jumps to 74% when respondents are confident their personal information will be protected)
  • Within this group, 45%are interested in recommendations from local healthcare professionals
  • 44% are interested in information on their medications
  • 44% would value help managing their health conditions
  • 43% would be interested in help learning how to stay healthy

Providers with apps and online portals are increasingly being measured against apps in the retail market for effectiveness, intuitiveness and creativity.

The key takeaways from the survey pertaining to the impact of technology on benefit plans are:

  1. Consumer-grade technologies and communications can contribute healthier outcomes and more engaged plan members
  2. Just-in-time nudges can connect members with underused areas of their benefit plan and offer information on preventative health solutions
  3. Plan member communications should be clear and tailored for the target audience

Each industry and even specific operations within an organization will have different comfort levels with technology and our experience indicates communications need to be sensitive to that to ensure the best outcomes.

Drug Plan Spending Increases

Private drug plan spending increased 5.4% according to the Express Scripts Canada annual drug trends report. The report attributed the increase in cost per claimant to a number of factors including higher costs associated with the COVID-19 pandemic and specialty drugs.

The onset of the pandemic led to stockpiling of chronic medications and a conversion from 90 to 30 day supply claims across many provinces resulting in additional claims and dispensing fees.

Specialty drugs priced between $10,000 to $100,000 annually accounted for 30 per cent of all specialty medications, 36 per cent of the volume and 70 per cent of the specialty drug spend; whereas specialty drugs priced below the $10,000 annual threshold accounted for 66 per cent of all specialty medications, 63 per cent of the volume and 22 per cent of the costs. In 2020, the overall spend for specialty drugs over $100,000 increased by 23.3 per cent while the increase for drugs between $10,000 and $100,000 increased by 9.4 per cent. The overall spend for specialty drugs priced under $10,000 increased a little over eight per cent.

According to a 2020 report by Telus Health, specialty drugs share of eligible costs has increased from 14% in 2010 to 30% in 2019 while representing 1.1% of all claimants. As much as 60% of the pipeline for new drugs being developed is focused on specialty medications, according to a 2020 report from Express Scripts Canada, with about 50% of drugs in that pipeline designed for oral administration, meaning they will be covered by private plans.

While most benefit plans have a high-cost pooling level – for example, $10,000 is common however some insurers are moving that to $15,000 – to cover any individual claims that reach that amount, the insurers are increasing the costs for the Pooling insurance every year.

As referenced in earlier editions of Current Trends, there are reforms expected in July 2021 from the Patented Medicines Price Review Board that are expected to lower the prices of new drugs.

The solution for managing drug benefit costs is specific to each benefit plan and while there are several options available to manage costs, it is important to review the impact on overall costs if restrictions were placed on specific drugs. For example, if an employee was taking medication for rheumatoid arthritis and was being productive at work as a result, .is the cost of that prescription lower than costs associated with casual absenteeism or a disability claim.

HCSA Extension Update

In previous editions, we let you know that Canada Revenue Agency (CRA) would allow a one-time extension for Health Care Spending Account (HCSA) plans that have unused credits expiring between March 15, 2020 and December, 31, 2020.

The CRA has now, due to COVID-19, updated their position to allow a one-time extension of unused HCSA credits that expire between March 15, 2020 and March 16, 2021 to be carried forward for a period of up to 12 months.

Plan sponsors will need to notify their insurer if they wish to apply for this extension and also keep in mind, it can only be used once.

Group Savings

Fixing Contribution Errors

The recent Federal budget proposes to allow pension plan administrators to make additional contributions to an employee’s defined contribution pension plan to compensate for an under-contribution, and to refund the contributor (employer or employee) to correct an over-contribution error. This measure applies to errors made in any of the preceding five years.

Plan administrators will be required to file a prescribed form for each affected employee, rather than amend T4 slips for prior years. Additional contributions to correct for under-contributions would reduce the employee’s registered retirement savings plan (RRSP) contribution room for the taxation year following the year in which the retroactive contribution is made.

New Brunswick Pension Legislation Changes

New pension regulations in New Brunswick will affect plan sponsors and plan members with life income fund (LIF) plans.

The rate used to determine LIF minimum withdrawal amounts is now the same as those in other provinces and will affect people age 72 and older. If members still have money in their LIFs when they’re 90, they will continue to receive payments.

Sponsors need to create a governance policy for their pension plans and be prepared to provide it to the provincial regulator beginning in 2022.

Individual pension plans no longer need to be registered in New Brunswick, only registered with the Canada Revenue Agency.


Some Provincial Drug Plans expanding use of Biosimilars

Alberta’s biosimilar initiative will replace the use of biologic drugs with their biosimilar versions whenever possible. The original focus is on three of the top four drivers of drug spending in Alberta – Remicade, Humira and Enbrel. Depending on the health condition that is being treated by one of these biologics, the patients had to switch to the biosimilar version by January 15, 2021 for some conditions, including rheumatoid arthritis and psoriasis, and no later than May 1, 2021.

The Saskatchewan government announced that effective March 1, 2021, new patients will no longer be eligible for coverage of Enbrel under its public plan and only be eligible for biosimilar versions.

The Manitoba government also announced changes to its biologics program. Currently, claimants are expected to try biosimilars listed under Tier 1 of the public plan before they can be considered for coverage for either Enbrel or Remicade, which are Tier 2 drugs in their model. Manitoba continues to introduce biosimilars to their Tier 1 coverage as preferred therapies over originator biologics.

The New Brunswick government has notified approximately 3,000 members of the province’s drug plans who are living with diseases such as inflammatory arthritis, inflammatory bowel disease, diabetes and psoriasis, that they have until November 30, 2021 to switch from a biologic to the biosimilar version. After that time, the plan will only cover biosimilars unless a patient’s physician determines they’re medically unable to switch to a biosimilar.