Inflation on Health-care Costs Trending Down for 2019

A survey done by Aon suggests costs for providing medical benefits will trend down in 2019. While costs on these benefits continue to be growing at a rate higher than inflation, they are expected to rise by 6.0% next year against an average general inflation rate of 2.1%.

Globally, the report projects plan costs for medical will increase by 7.8% compared to an average general inflation rate of 3%.

The same report lists strategies companies are using to manage costs and they include traditional approaches like changes to plan design and negotiating costs with insurers but an emerging trend is to programs focussed on assisting the employee to a better state of overall Wellness through nutrition, exercise and financial planning.

Qualifying Value of Wellness Plans – A Struggle

Wellness programs are growing in popularity but measuring their value and getting employees to participate remain challenges.

The content in a Wellness Plan can vary dramatically in the Canadian market however, from our perspective there are three key areas that need to be included – nutrition and exercise, mental health and financial. Any chance of measuring the success of the plan is dependent on the provider’s ability to track information on utilization so the plan sponsor can ascertain what is working and what may need to be tweaked so the plan is being used by both more people as well as , the biggest challenge, those who need it the most.

A number of factors can skew the results including use of a formula that measures value to the plan sponsor, as well as outside factors such as the economy and company health. The latter in particular can influence employee behaviours.

A study done by the Employee Benefit Research Institute found executives wanted the Plan to demonstrate a Return On Investment (ROI) if they were going to provide additional money for it. The results they were looking for include lower turnover, higher employee satisfaction, and greater workforce productivity. The latter two can be difficult to measure however other metrics are easier and include a reduction in health-care costs and absenteeism.

A study by Aon Hewitt indicates that not all employers are just thinking about the bottom line when offering Wellness Plans. In that survey of roughly 250 employers, the most common reason cited for offering Wellness Plans was they thought it was “the right thing to do”.

It is a struggle to measure the success of a Wellness Plan as statistics that measure usage, participation and behaviour in the aggregate can easily miss the fact that usage by the most at risk, the ones that need the help the most may not be engaging in the solution.

New Rate Structure for WSIB

The Workplace Safety and Insurance Board (WSIB) has announced a new framework for employers which will replace the current policies on classification structure, rate setting and retroactive experience rating on January 1, 2020.

The new approach introduces 6 core policies to replace the current 13 that comprise the present system. Some highlights include:

• The severity of workplace accidents (as affected by the length of time that injured employees spend away from work) will be more important for setting premium rates
• The rate setting window used to establish premium rates will be extended from 3 or 4 years to 6 years to reduce the impact that any single year will have on an employer’s premium rate

Every business registered with WSIB should receive a letter about premium rates under the new framework later this year.

Quebec Pension Plan Changes

The Quebec Pension Plan (QPP) will implement changes starting in 2019 which will affect everyone working and contributing to QPP.

Key elements of the changes include:

• They will be implemented over a seven year timeframe
• Employees and employers will continue to each pay half the contribution rate
• QPP currently replaces 25% of a worker’s eligible pre-retirement earnings which, when all the changes are implemented, will reach 33.33%
• The contribution rate will increase from the current 10.8% to 11.1% in 2019 and will reach 12.8% in 2023
• Those currently receiving QPP benefits will not be affected by these changes

Canada Pension Plan Changes

There will be changes to the Canada Pension Plan (CPP) starting in 2019. These changes will affect everyone who works in 2019 and contributes to CPP with the exception of people working in Quebec and contributing to QPP who will benefit from the changes noted above.

Key highlights of the changes are:

• The changes will be phased in over a seven year timeframe
• The income replacement rate will increase from 25% of the Year’s Maximum Pensionable Earnings (YMPE) ro 33.33%. The YMPE will also increase by 14% by 2025.
• Employee contributions will increase from 4.95% of these earnings starting in 2019 to an ultimate 5.95% in 2023

Managing Cannabis in the Ontario Workplace

Bill 36 and the Smoke Free Ontario Act, 2017, were both passed by the Ontario Government in October of this year. For employers, a key feature of Bill 36 is that smoking or vaping in enclosed public spaces or enclosed workplaces is prohibited.

The Ontario Human Rights Commission (OHRC) has also provided guidance to employers with respect to the duty to accommodate and cannabis. In their newest policy, they state that employers can generally expect employees to be free from cannabis impairment while at work. Employers do need to keep in mind that there are exceptions to this general statement. For example, if an employee has a disability that requires medicinal cannabis or can establish addiction to cannabis then the duty to accommodate can apply. However, under the Ontario Human Rights Code, recreational users of cannabis have no rights and employers can limit and restrict recreational use of cannabis at work and also prohibit impairment.

Generally, a good approach is to align your cannabis policies with the policies and approach used for alcohol.

Termination of Employment After Disability-Related Absence

A common issue related to termination of an employee that can result in litigation relates to the employee’s medical leave or disability. Even where an employer makes a decision that is unrelated to an employee’s protected characteristics under human rights law, the timing often raises questions about the employer’s motivations.

The Ontario Human Rights Tribunal has dismissed complaints based largely on the timing between (a) the employer expressing concerns about the employee’s disability-related absences, and (b) the termination of that employee’s employment.

Two examples of these decisions can be found in Mou v. MHPM Project Leaders, 2017 HRTO 246 and Whitmore v. Dr HT Kelsall Inc.

While both of these legal actions affirm that bad timing itself may not be sufficient to establish discrimination by the terminated employee, it is recommended that employers document the non-discriminatory reason for termination of an employee’s employment, particularly when there has been a history of absences.