Group Benefits

Top Two Issues Influencing Benefit Strategies

Investment in employee benefits remains a key priority for Canadian employers as part of their efforts to attract and retain talent according to a survey of 128 Canadian employers by Willis Towers Watson.

Competition for talent (84%) and rising mental health issues (63%) are the top two issues influencing employer benefit strategies followed by a focus on inclusion and diversity (48%) and rising costs (40%).

A challenge for employers on this last point is more workers are taking advantage of their health benefits according to a report by Green Shield Canada Administration which indicates drug cost per claim has grown steadily since 2020, when the total was $1.4 billion, to 2022, when it was $2.2 billion. More than half (53.5%) of the total Green Shield Administration drug cost was associated with the top five per cent of treatments and that data is as follows:

1. RA/Crohn’s/colitis/psoriasis

2. Diabetes

3. Cancer

4. Multiple sclerosis

5. Asthma and COPD

The importance of benefits remains high according to a survey by Blue Cross of Canada which indicates 49 per cent of workers employed by small employers would choose health benefits over extra cash.

Strategies for Managing Healthcare Expenses

In a recent survey by the International Foundation of Employee Benefit plans, employers revealed their expectations for another 7 per cent increase in healthcare costs in 2024. According to survey respondents, the top contributors to the expected cost increase are utilization due to chronic health conditions (22%), catastrophic claims (19%), specialty/costly prescription drugs (16%) and medical provider costs (14%).

Employers are looking to implement a range of strategies to control expenses in this coming year, including:

• Utilization control initiatives such as prior authorization, case management, disease management and nurse advice lines (22%)
• Cost-shoring initiatives such as deductibles, coinsurance, co-pays and premium contribution (16%)
• Emphasis on wellness plans (13%)
• Plan design initiatives such as dependent eligibility audits, high-deductible health plans, spousal surcharges, carve-outs and drug formulary changes (12%)
• Procurement and specialty provider initiatives such as telemedicine, price transparency tools, healthcare navigators and coalitions (12%)

Some of these initiatives listed are more common in the United States and may reflect situations where the Canadian company is a division of the US parent.

We also believe educating plan members on how to be a “smart consumer” when using their benefits is a proven way to manage costs.

Are EAPs Effective?

According to the latest Telus Mental Health Index, 40 per cent of workers in Canada are not familiar with the purpose of an Employee Assistance Plan (EAP) or an Employee & Family Assistance Plan (EFAP) and what it offers. And, while these plans are free to employees, more than 27 per cent cite cost as a major barrier in using them.

Among workers who would not use or don’t think they would use an EAP:

• 34 per cent do not know what it covers
• 23 per cent are concerned about confidentiality
• 21 per cent do not know how to access the service

Many are not aware that the offerings in an EAP extend far beyond counseling to include resources like financial, legal and family support as well as 7/24 crisis support.

Educating employees on all benefits is important and certainly a beneficial tool for managing overall benefit costs. Based on Telus Health findings, employees familiar with an EAP have the highest mental health score (66.3) compared to workers who do not (63.5) and even to the national average (64.6) based on the monthly survey results for August.

Group Savings

Are Group Savings Plans Linked to Group Benefit Plan Costs?

For the second consecutive month, the mental health score of workers in Canada declined in September to 64.4 from 64.6 in August. The decline, according to Telus Health’s Mental Health Index, comes as workers worry about their financial well-being, which is having an impact on their mental health.

The Index shows that 74 per cent of Canadian workers say it’s important for their employer to offer a retirement savings option. The Index also shows that financial well-being is highly correlated with mental well-being and, as financial well-being improves, so do mental health scores.

Legislative

EI Premium Rates Rise for 2024

The Canada Employment Insurance Commission (CEIC) announced that the Employment Insurance (EI) rate will increase to $1.66 per $100 of insurable earnings (from $1.63) for 2024. The CEIC also advises the maximum insurable earnings will increase to $63,200 (from $61,500), resulting in a cash increase in the maximum contribution of $46.67 for employees and $65.34 for employers.

In Quebec, the EI premium rates for employees who are residents of Quebec will rise to $1.32 per $100 in earnings for 2024 (up from $1.27). The maximum annual employee contribution will increase to $834.24 (from $781.05) and the maximum annual employer contribution will increase to $1,167.94 (from $1,093.47).

In Quebec, EI premiums are different from the federal rates because Quebec finances its own parental insurance benefits.

Disability Benefits under QPP Changing

Changes to the disability benefits under the Quebec Pension Plan (QPP) are coming into effect on January 1, 2024, for plan members between ages 60 and 65.

Retraite Quebec will replace the variable disability portion of their QPP disability benefit with a variable retirement portion. This only has an impact at the member level as it affects benefits payments for members who:

• Go on disability after January 1, 2024 and,
• Have previously contributed, or currently contribute to QPP

Some insurance companies, for claims that satisfy these two conditions, are taking the position that they will deduct both the Fixed Disability Portion and the Retirement Portion from the short-term disability and long-term disability benefit even if the plan member opts out of receiving the QPP retirement portion. This is an issue that should be addressed for all employees who have a claim commencing after January 1, 2024 so they can make an educated decision when dealing with QPP on what benefits they elect to receive.

Ontario Expands Pharmacists Scope Of Work

Recent changes by the provincial government is allowing pharmacists to treat and prescribe medications for 6 common medical ailments, on top of the 13 they have been allowed to treat since the start of 2023.

The new services include treatment for:

• canker sores
• diaper rash
• yeast infection
• parasitic worms
• nausea in pregnancy

In addition, pharmacists can now administer certain injection and inhalation treatments to better care for people who need help taking certain medications, such as insulin, vitamin B12 or osteoporosis treatment.

Since January 1, pharmacists have been able to prescribe prescriptions for:

• hay fever
• oral thrush
• pink eye
• dermatitis
• menstrual cramps
• acid reflux
• hemorrhoids
• cold sores
• impetigo
• insect bites and hives
• tick bites
• sprains and strains
• urinary tract infections>

Since being allowed to do so, 89% of Ontario pharmacies have been treating common ailments, providing over 400,000 assessments