Jackson And Associates
Current Trends

Group Benefits

Salaries Expected to Increase in 2022

Based on a new survey from Willis Towers Watson, Canadian employers expect salaries to increase from an average of just over two per cent in 2021 to about three per cent in 2022.

There are a number of reasons for this including employers experimenting with hybrid work models which better fit employees’ lifestyles and result in lower operating costs. Actually, fifty-one per cent of companies surveyed are reporting better than expected performance in 2021. As well, forty-seven per cent indicated their rate of recruitment far outpaces their efforts in 2020 and that organizations that stalled efforts to recruit last year are now starting to actively recruit.

Medical Benefit Costs Expected to Rise

According to a recent survey by Aon, employer-sponsored medical benefit costs in Canada will rise seven per cent in 2022. The cost drivers continue to be for dental care, paramedical expenses and prescription drugs. The predicted increase is mainly due to the expectation that medical utilization will return to pre-pandemic levels, higher unit costs for medical services and an anticipated increase in the rate of inflation.

Canada Lagging in Use of Biosimilar Drugs

The Institute for Optimizing Health Outcomes recently published a scorecard rating the biosimilar policy frameworks across success factors for biosimilar sustainability, defined broadly as “…improving patient access and physician prescription choice of safe and high-quality biologic medicines, in a framework that considers the needs of all stakeholders…..and provides a means to manage existing health-care budgets while safeguarding a healthy level of competition and supply.”

Canada’s public drug plans would have scored at the bottom with the three major hurdles to biosimilar sustainability listed as : lack of physician and patient education; limited benefits to physicians to encourage use; and unsustainable purchasing policies.

As annual spending on biologics continues to rise dramatically for private drug plans in Canada, Health Canada has now approved 33 biosimilar biologics including options for two of the biggest selling originator biologics – Humira and Remicade. With an approximate 40 to 50 per cent discount on the prices of originators, biosimilars can offer significant savings to both private and public drug plans that can serve as best practice for private health insurers. Underlying these initiatives is a foundation of evidence supporting biosimilar transition including 140 studies based on more than 21,000 patients who have been successfully transitioned.

Since British Columbia implemented a biosimilar strategy, it anticipates savings of more that $227 million during the first three years.

Based on this evidence, the question for private insurers is why they aren’t capturing biosimilar savings to ensure sustainability of employer-sponsored plans.

Scope and Growth of Wellness Programs Continues To Grow

According to the 2021 Benefits Canada Healthcare Survey, 67 per cent of plan sponsors anticipate investing money and/or staff resources in wellness areas outside of their health benefits plan, with 51 per cent focussing on emotional and mental health.

There were 48 per cent of plan sponsors who have a training program for managers or employees to help them recognize and respond to signs of depression or other mental-health concerns. While the current median maximum coverage level for mental-health counselling is $750, 21 per cent of plan sponsors have a maximum between $1,001 and $5,000.

The survey also found mental-health conditions are the top chronic condition with 21 per cent reporting a diagnosis of depression or anxiety. There were 36 per cent of plan members reporting increased feelings of anxiety or depression in this past year, climbing to 45 per cent among females and 41 per cent among plan members ages 18 to 34, with this latter group more likely to report a mental-health condition.

Return To Work Plans for 2021

In Benefit Canada’s Return To Work seminar, 54 per cent of attendees indicated they’re planning a phased return to the workplace beginning on the third and fourth quarter of 2021. Among the nearly 200 plan sponsors, 18% said they’ve already returned to the workplace, 16% have no plans to return to a physical location and 12% are planning a phased return beginning in the first quarter of 2022.

The majority (84 per cent) are implementing a hybrid work model that includes both remote and physical workplace options. Of primary concern to 80 per cent of respondents is the impact on attraction and retention if they mandate that employees return to a physical workplace.

Benefits During Maternity Leave

A survey by Aon found 93 per cent of respondents have leave policies that specifically address benefits. Among multi-jurisdictional employers, 79 per cent have a policy that provides benefits continuation for all employees regardless of their province or territory of employment and 72 per cent indicated the employee must satisfy any cost-sharing arrangements using payment methods that include EFT, post-dated cheques and direct billing and only 12 per cent stated they recoup costs through payroll deductions when the employee returns to work.

Group Savings

HR Professionals Believe Retirement Savings Plans Adequate

An Aon survey of 262 Human Resource professionals found 74 per cent believe their retirement savings program is sufficient.

Looking at diversity issues, 75 per cent plan to review some aspect of their plans from a diversity, equity and inclusion perspective in the near future. There were 52 per cent that are getting started with these initiatives while 36 per cent have plans well underway and 10 per cent have yet to start.

The DEI strategy is impacting both investments with 15 per cent indicating they’ve incorporated more diverse perspectives while 8 per cent are integrating DEI into the investment process aiming for more inclusion and better investment outcomes and 7 per cent have increased manager diversity within their retirement saving’s portfolio.

Canadian Retirement Ranking Slips

According to the Natixis Investment Managers 2021 Global Retirement Index, many Canadians feel their retirement dreams are slipping away. Among Canadian investors, 66 per cent remain confident they can retire financially secure but 25 per cent think it will require a miracle to do so. There are 39 per cent that expect they will have to keep working for longer while 34 per cent are concerned they won’t be able to stay employed for as long as they want or need to.


CRA Increases Pensionable Earnings Formula

The maximum pensionable earnings under the Canada Pension Plan (CPP) for 2022 is increasing to $64,000 from $61,600 in 2021. The employee and employer contribution rates for 2022 will be 5.7 per cent, up from 5.45 per cent in 2021, while the self-employed contribution rate will be 11.4 per cent, up from 10.9 per cent in 2021.

For 2022, the maximum employee and employer contribution will be $3,499.80 each while the maximum self-employed contribution will be $6,999.60 both increases from the 2021 amounts of $3,166.45 and $6,332.90 respectively.

Ontario Minimum Wage Increases

On January 1, 2022, the minimum wage rate in Ontario will increase from $14.25 to $15.00 per hour. The increase in minimum wage impacts job categories differently with general minimum wage for liquor servers increasing to $15.00 per hour, student minimum wage to $14,10 from $12.55and homeworkers to $16.50 from $15.80.