The Benefits Canada Healthcare Survey was released a few weeks ago and you know what that means! We have another reason to talk about trends in the Group Benefits Industry!
In this blog, we will be going over findings that we found interesting, informative, and important.
How the outlook of benefits has changed
Let's start off with a big one. According to the report, the value of health benefits has soared, with a staggering 72% of plan members expressing a newfound appreciation for their health benefits plans compared to pre-pandemic times. Gone are the days when “discussing compensation” only refers to an employee's salary, their benefits are right there with it.
Why did this happen, you ask?
As the world grappled with the challenges posed by COVID-19, Plan Sponsors stepped up their game. They invested significantly in these plans, with a particular focus on mental health and preventative care. This has resulted in 60% of plan members now affirming their plans meet their personal needs exceptionally well.
As IA Groupe Financier notes, "Many plan sponsors really stepped up during COVID, introducing virtual care and more benefits for mental health and preventative care."
Surely, it’s not all sunshine and rainbows though?
60% of Plan Sponsors report rising health benefits costs
Although an appreciation of plans has gone up, so have costs. With drugs, management fees, and health and dental taking the cake as the main causes of rising health costs.
For example, the ODA’s Dental Fee Guide reported price increases of 13.25% in just the past two years!
These costs aren’t something to ignore, they directly affect your plan as insurers see these costs as experience and charge higher premiums as a result.
These rising costs aren’t going anywhere anytime soon. Ignoring the macro effects on the Group Benefits industry, internally your team’s needs may not be getting the coverage they need. Which means higher costs for you.
The battle for coverage
51% of plan members reported the coverage levels of at least one of seven listed health benefits limited their ability to seek necessary treatment.
This result also increased significantly among heavy users of mental-health therapy (82%), massage therapy (82%), physiotherapy (78%) and chiropractic (75%).
What this means is your team is paying big bucks from their own pockets just to get the coverage they need. In fact, The highest single average out-of-pocket expenditure was for mental-health therapy at a whopping $1,739.
We call it a battle for coverage because a bigger plan with more coverage means a sizable cost to cover. It’s an uphill struggle to determine the right balance between coverage and cost.
However, with solutions like Health Spending Accounts, you can ensure you’re doing all you can to give your team the coverage they want while staying away from those expensive bloated plans.
Picking the right plan isn’t the last step
We know, you did your research, mulled over plan after plan, and finally found one that checks all the boxes.
But it doesn’t end there. You need to properly educate your team on what your benefits plan entails, or it will end up as a background cost like your Netflix subscription you don’t use and that you forgot to cancel.
According to the report, 51% of plan members said they understand their health benefits plan extremely or very well, down from 65% in 2018 when this question was last asked.
Why is this significant?
Because 83% of plan members who understand their plan extremely or very well were much more likely to describe the plan as excellent or good than the 57% who do not understand their plan. A team member who is satisfied with their compensation is much more likely to stick around than someone who isn’t, don’t you think?
However, there is a disconnect as 88% of plan sponsors felt they effectively communicate what is covered by their health benefits plan.
The Balancing Act
We’ve talked about costs being a burden on plan sponsors when finding the perfect plan, but there are other forces creating turbulent waters that plan sponsors have to face.
As the old saying goes, "Smooth seas do not make skillful sailors." Per IA Groupe Financier, “Plan Sponsors face the daunting task of maintaining this newfound appreciation while balancing growing financial pressures.”
This quote points to the fact that, despite the current success, 85% of Plan Sponsors expressed at least one major concern about their health benefits plan.
What are those concerns?
- Inflation
- Competitiveness
- Sustainability
We go into a deeper dive into how all these concerns, and more, are turning into this perfect storm about to rock the Group Benefits world in our previous blog.
Looking to the Future
The increasing appreciation for health benefits is undoubtedly a positive development. It underscores the growing recognition of the role that these benefits play in the well-being of your team. However, as we move forward, striking a balance between employee satisfaction and financial stability will be the key challenge.
Employers must be prepared to address the "swells" in the form of evolving healthcare needs, economic uncertainties, and other unforeseen challenges. The road ahead may not always be smooth, but with careful planning, a commitment to employee well-being, and a benefits solution that fits the business needs, businesses can solidify their foundation and ensure their health benefits plans remain a beacon of support for their team.
In these dynamic times, health benefits have never been more crucial, and the proverbial train is about to leave so make sure you aren’t left behind!
Did we catch your interest?
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