Group Benefits

Trends in Group Benefit Coverage

A recent survey by Benefits Canada, which polled 20 of Canada’s group benefits providers, focussed on the prevalence of certain benefits and found none of the respondents included gender affirmation coverage in all of their plan offerings, while only six per cent included fertility benefits coverage.

In addition, the survey found 68% of Canadian group benefit providers include paramedical coverage in all of their plan offerings followed by mental health services at 67%, vision care at 39% and dental care at 32%.

About 70% of the respondents indicated plan sponsors were expressing significant interest in coverage for virtual/online health care, followed by health coaching at 40% and pharmacy services also at 40%.

Almost 75% indicated plan sponsors are expressing little interest in medical cannabis coverage.

Focus on Overall Employee Wellness Growing

A new survey of Canadian employees, conducted by Environics Research and commissioned by Dialogue Health Technologies Inc., looked at how their health has been impacted over the past two years. The survey polled 1,500 Canadians who report their physical health (30% of participants), mental health (32% of participants) and financial situation (34% of participants) have significantly worsened over that period. The survey found that 70% were more conscious of their health which is an increase of 14% since 2021.

When focussing specifically on remote workers, the survey found 55% have noticed more stress and anxiety, followed by reduced productivity (39%) and increased absenteeism (33%). While most (80%) indicated they are comfortable seeking mental-health support, only half (40%) said they have the finances to do so while a lack of time (32%) prevented others from prioritizing their well-being.

The survey indicated 40% of respondents have never accessed their employee assistance plan (EAP) while a third consider mental-health support provided through benefit plans to be insufficient while 76% indicated their managers lack training to recognize and support their mental-health needs.

Beyond EAPs, 77% of respondents agreed that employer-paid virtual care that includes physical and mental-health professionals is of great value. Of those polled, 83% at organizations that have improved employee well-being find these initiatives helpful citing better job satisfaction (44%), a more positive work environment (44%), feeling more supported (39%), increased productivity (39%) and better retention (34%).

Drug Benefit Costs Increased in 2022

In a year when many employees started to return to work, the annual spend per private drug plan member increased by 6.3% according to the Express Scripts Canada annual drug trends report. The increase was primarily due to a 5.4% rise in the number of plan members making a claim.

Traditional drugs accounted for 99.3% of claims, which represented a 6.3% increase, and represented 73% of the annual drug spend and an increase per claim of 3%. Specialty drugs made up the 27% and had an increase of 4.8% per claim.

The top therapeutic classes did not change from prior years however the asthma/chronic pulmonary disease therapeutic class saw a 22% increase in claims driven by a 47% increase in claimants. At 18%, the diabetic therapeutic class saw the greatest increase in spend driven by a 10% rise in spend per claim.

The report also looked at weight loss drugs and found many drug plans exclude coverage (65%) while of those that have coverage, 35% indicate it’s limited by maximums. The report found weight loss drug spend increased by 9.9% and claimants by 7.5% in 2022.

There is no disputing the data however there are opportunities for both plan sponsors and benefit providers to retool their benefit plans to adjust to these trends with a goal to provide adequate and appropriate support to pan members while maintaining the long-term financial stability of the plan.

The pandemic has shown an increase in both mental health drugs and use of mental-health practitioners. According to Telus Health’s drug trend report, the stimulant ADHD drug class saw the highest year-over-year growth noting the majority of new claims came from millennials, generation X as well as female plan members. This is resulting in plan sponsors increasing annual limits for mental-health coverage significantly (for example, many plans have annual maximums for professional practitioners at $300 to $500 while one visit can burn though that amount) as a preventive measure to help plan members take preventive steps to manage these challenges.

The pandemic redefined an employee’s expectations of their company in terms of healthier work-life balance and flexibility but also opened up the dialogue around mental-health and well-being. A focus on the benefit plan’s claims can help identify individual needs and a Wellness strategy can also support an employee’s specific needs – both can help tailor the benefit plan to remain current with the new hybrid workplace challenges.

Group Savings

Majority Contributing to RRSPs

According to an Edward Jones Canada study, a majority (51%) of Canadians plan to contribute to their registered retirement savings plan (RRSP) this year which is up significantly from 18% last year. The report also indicates that, of those contributing, 23% plan to use the maximum amount.

This increase is driven by those aged 18 to 34, up by 22% from last year, and 35 to 54 who are up 23% from last year. For the 18 to 34 group, 17% expect to contribute the maximum and, for the 35 to 54 group, 15% will contribute the maximum.

The number of respondents that cited cost of living as a barrier to saving for their retirement actually plummeted from 29% to 16%.

Legislative

QPP Promotes Working Longer

Recent amendments to the Quebec Pension Plan (QPP) are designed to encourage people to work past age 65 by offering greater flexibility on contributions and retirement age.

As of January 1, 2024, the maximum age at which an individual can apply for QPP benefits will be raised from age 70 to age 72. At age 72, both employee and employer contributions to QPP will cease.

Also under these changes and similar to the Canada Pension Plan, Quebec workers age 65 and older who receive benefits will be able to opt out of contributing to the plan.

In addition, there will be a change in how pensions are calculated for workers whose salaries drop after age 65. Pension calculations are based on a worker’s average employment earnings which could have a negative impact, in the form of a lower pension, on someone who elects to remain in the labour market parttime. Under this new legislation, after age 65, lower earnings will not have a negative impact on pensions.

BC Pharmacare Expands Coverage

Residents of British Columbia will have the cost of prescription contraceptives covered by BC Pharmacare effective April 1, 2023. BC will be the first jurisdiction in Canada to cover the full cost of prescription contraception for its residents.

These types of contraceptives will be covered:

• Oral contraceptives
• Copper IUDs
• Hormonal IUDs
• Hormonal injections
• Hormonal implants
• Emergency oral contraceptives (no prescription required)

Most covered brands are generic versions of a brand name counterpart. If the prescription is for a brand name drug or item that isn’t fully covered, the resident can ask the pharmacist to dispense an eligible generic equivalent. Prescriptions will be filled at no out-of-pocket expense to residents as the pharmacist is not allowed to charge a dispensing fee,