By Faizal Mitha
According to the 2018 Sanofi survey, nearly one quarter of Canadian employers do not evaluate their health benefits plan at all, aside from doing what’s necessary for renewals.1
But in a post-Coronavirus world, simply renewing your employee benefits plan without critically examining it and considering your options for greater employee support and budget considerations should be viewed as a critical strategic priority.
Never before has the timing of your renewal been as critical given claims for the months of March through June will see significant claims decreases due to Dental and Paramedical offices being closed. But the principles remain the same.
Benefits Budgeting
In order to plan for the future, compare the state of the business today with the situation a year ago. Did the shutdown lead to any lay-offs? What do the claims look like? Did you receive any premium credits from your insurer? Remember that dental and paramedical services were essentially nonexistent between March and June, and your renewal should reflect that. If your plan is fully insured, you received some of this break already through premium credits provided by your insurer. If your plan is self-insured or Administrative Services Only (ASO), it is critical to review your monthly statement to ensure you have a surplus in your account amounting to at least 6-weeks of claims.
As Dental and Paramedical offices being to open up, you will see claims start to return to regular patterns and beyond, but we don’t anticipate a big surge in Dental claims as some sources predicted as your plans are protected by a recall examination clause of usually.
Plan Design
If the business is reopening after the shutdown, some temporary cost-saving measures may be necessary. The challenge will be in balancing between reducing cost while minimizing the impact on employee support. To make this decision, evaluate or re-evaluate your benefits strategy first, and then align your choices with that strategy. For example, where does your employee benefits plan fit on the spectrum covering employee needs vs. employee wants? Employee needs are those elements in your plan that may only be used by a small portion of the group but have significant financial consequences to the employee if they are not in place (Life Insurance, Long Term Disability, High Cost Drug Coverage). Employee wants are the items that are used by the majority of your employees and score well on engagement surveys but if these plan provisions were removed, there wouldn’t be a financial catastrophe for employees (eg. Vision Care, Massage Therapy).
Some cost-saving measures may include:
- Remove or limit dental (eg. Major and Orthodontic coverage) or paramedical coverage (with the exception of Psychology) for a period of time. You can opt to reintroduce coverage in stages, as your budget allows.
- Reduce your drug costs and encourage social distancing through partnering with a virtual pharmacy. You may have to champion a change in the way employees fill their prescriptions, but you may be able to keep the same level of coverage at a lower cost.
- Follow more traditional cost containment options, such as offering lower coinsurance or lower maximums.
Supporting Employees
A study released by Deloitte last year reported that the cost of poor mental health in the workplace was $50 billion.2 Many employees returning to work are likely struggling with mental health in some way, whether it’s greater uncertainty or increased financial strain.
One way to demonstrate support for a diverse group of employees is by augmenting the benefits package in order to target the employees’ biggest challenges and stressors. Offering a simple lifestyle spending account may be one of the easiest ways to address that, as this money can be used to provide options for childcare or elder care which will be key stress points for employee’s returning, coupled with an Employee Assistance Program (EAP) to help research available options, this can go a long way toward providing support. Another option is to increase mental health services, through increased psychology coverage in your Paramedical plan and through adding the innovative and effective Internet delivered cognitive behavioural therapy (ICBT) benefit either though your Paramedical plan or as a standalone benefit.
While all the focus and attention have been on employee support, it is also critical to ensure management teams have sufficient training and tools available to them to support returning employees. The themes that are most prevalent with management training are: Mental Health First Aid (mhfa.ca), emotional intelligence training (workplacestrategiesformentalhealth.com for free resources) and resilience.
Virtual Services
After several months stuck at home with social distancing, many Canadians are open to greater virtual services than ever before – making this the best time to offer virtual services as part of your employee benefits package. Be sure to look into adding virtual health and pharmacy services to the list of benefits options, as well as virtual mental health services and other online training courses, such as financial literacy, stress management and even mindfulness training. In the past, these benefits were seen in the “nice to have” category. The new environment requires greater focus from employers on tangible and well communicated support mechanisms for their employees.
HUB International’s employee benefit specialists consult with employers of all sizes and in all industries on every aspect of employee benefits program planning and management.
1 https://www.benefitscanada.com/wp-content/uploads/2018/06/2018_SanofiSurvey.pdf