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Aaron Harris/For the Toronto Star
The Canadian Institute for Health Information reported last year that for more than a decade the public sector has accounted for about 70 per cent of the total health care bill and the private sector for 30 per cent.
But as governments de-list services and new more expensive drugs become available, employers are looking for ways to contain health care costs while still supporting and maintaining a healthy workforce.
I asked four benefits consultants what strategies they believe employers will use this year to manage health care costs and so what that means for you. The consultants were Tim Clarke at Aon Hewitt, Andrew Tsoi-A-Sue at Eckler Ltd., Anthony Perlman at Towers Watson and Nigel Branker at Morneau Shepell.
Here’s what they told me:
1. Drug plans: Managing these costs continues to be at the top of the agenda for many employers. For example, the Towers Watson Rx Coalition of Canadian employers who have banded together to explore drug cost management options inked a deal with Loblaws late last year that will give employees lower deductibles or more coverage if they use Loblaws pharmacies. Perlman and Tsoi-A-Sue predict that in 2013 there will be more business ventures like this to help keep employer-sponsored drug plans sustainable.
Related: Loblaws lands deal as preferred pharmacy for employer group
2. Wellness programs: A survey last year by Sanofi Canada Health Care found that 40 per cent of benefit plan members have some sort of wellness program ranging from health risk screening to employee education to activities encouraging physical activity. But less than half take advantage of these programs with just 14 per cent saying they definitely participate and 31 per cent reporting they “kind of” participate.
Morneau Shepell’s Branker sees wellness programs like Health Reimbursement Accounts, wellness challenges and other preventative programs becoming a vital part of more benefit programs. Perlman at Towers Watson says organizations will more clearly try to define the goals of these programs, explain them to employees and improve participation by using financial incentives, technology and social media.
Related: Why some companies pay employees to keep fit
3. Shared responsibility: Aon Hewitt’s Clarke suggests that more employers will adopt benefit plan designs that encourage employees to become better health care consumers by shopping around for lower dispensing fees or taking lower cost generic drugs when they are available. Employees may also be asked to pay a greater share of health care premiums this year.
4. Retiree buyouts: The Supreme Court of Canada ruled in the 1993 Dayco case that employers cannot eliminate or reduce vested post-retirement benefits of current retirees. However, Towers Watson’s Perlman expects to see more employers trying to negotiate lump sum settlements to settle prospective retiree health care obligations. Eckler’s Tsoi-A-Sue notes that the Auto Sector Retiree Trust for retired CAW workers from Chrysler and General Motors is an example of labour agreeing to a fixed employer contribution to cover future post-retirement health benefits.
Related: Half of retirees getting company health benefits
5. Technology: Clarke says mobile apps will increasingly be used for plan enrollment, submitting health/dental claims and even helping plan members to find the nearest or most cost effective pharmacy or other service provider. Branker also believes that employers will take better advantage of technology that allows them to send more targeted communications to employees regarding program choices and events that will be most relevant to them.
Related: Filing an insurance claim? Ditch the paper
Sheryl Smolkin is a Toronto lawyer and writer. Contact her through her website and follow her on Twitter @SherylSmolkin.
Retirement Redux
