Modernizing Group Benefit Plans: What it means for Canadian Businesses (Part 1)

When it comes to group benefits in Canada there is one thing you can be sure of; change is coming.

Today’s workforce is comprised of multi-generational employees; and each generation consumes group benefits uniquely. And although the differences among these employees has been discussed extensively, the bottom line is people are different, and they expect their group benefit plans to be adaptable and flexible to accommodate their individual needs and preferences. A ‘one size fits all’ group benefits plan no longer meets the requirements.

According to the Canadian Life & Health Insurance Association (CLHIA), approximately 95% of the $36 billon in supplemental health benefits paid to Canadians was delivered through employer-sponsored group benefit plans. New technologies and online offerings for employees such as health-measuring wearables, health and wellness apps, and direct-to-consumer genealogy tests are generating unprecedented levels of data, which is driving innovation in product offerings to employees.

Keeping these factors in mind, we’ve comprised a list of modern solutions to help employers with the future of their group benefits plan:

Preferred Provider Networks (PPNs)

PPNs are helping employers reduce costs by offering discounted products and services to their employees, such as prescription drugs, health products and vision coverage. One such provider is IRIS, providing quality eyeglasses at significant discounts to employees. This stretches your vision coverage further without having to increase plan maximums. Many PPNs exist for prescription drugs at leading national pharmacies. When working through a PPN, employers can enjoy negotiated reductions in drug ingredient costs, dispensing fees and even over-the-counter discounts for employees. Ask your current provider for their recommended PPNs.

Virtual health care

Through technology and innovation, employees now have access to health care professionals when and where they need it. Virtual health care gives employees 24/7 access to family doctors, nurses and specialists, via the comfort and convenience of their computer, tablet or smartphone. Virtual visits can help reduce absenteeism and increase productivity. Employers pay for this service on a per-employee-per-month fee basis. While the monthly costs are not insignificant, the savings in reduced lost time and increased employee engagement more than make up for it. Canadian providers include Akira Health and Maple. Expect this kind of service to become a standard employer offering within the next five years.

Navigate virtual health care services available through People Corporation.

Linking drug utilization to targeted wellness tools

Leading employers are tackling direct costs is by measuring their employees’ specific Drug Utilization by condition, then mapping those conditions to targeted Wellness programs. By understanding the leading health drivers within your group, employers can effectively target conditions through a sound wellness strategy. This can help lower costs in areas like type II diabetes, high cholesterol or hypertension, to name a few. Changes in conditions can be measured year over year, as well as comparing your usage against national averages.

Health Care Spending Accounts (HCSAs)

Employers are realizing the convenience and flexibility of a Health Care Spending Account (HCSA), which puts more control in the hands of employees in terms of their benefit choices. HCSAs are rapidly replacing traditional modular flex plans and flex credit-based programs, which are often difficult to administer. The advantages of an HCSA include simplicity, complete flexibility in coverage, and the ability to choose age-appropriate benefits for your multi-generational workforce. Finance teams love HCSAs because they are considered a defined contribution, meaning the maximum cost is known and quantifiable; HR teams love them because they help recruit, reward and retain all generations of top talent, due to the attractiveness and flexibility of the benefit. Applause is a leader in providing a lifestyle benefit plan that provides flexibility outside the traditional benefits offering. HCSAs are no longer considered a luxury, but a necessity. Speak to your group benefits consultant about how you can free up wasted premium on unused fully insured benefits, in order to help fund a new HCSA.

In part two, we’ll discuss more solutions available to plan administrators, which can help build modern, competitive and sustainable group benefit plans.

Jeffrey Stinchcombe is a Partner at People Corporation. He is the lead instructor on CPA’s Best Practices of Employee Benefits course.