Year End Review and Predictions for the Upcoming Year
As the year draws to a close, it is a good time to look at the trends and issues in employee benefits for 2019 and to uncover what we can expect in the year to come. ASSOCIUM has spoken in depth with our partner carriers and many Advisors to identify trends over this past year and what to look forward to in the year ahead.
As in past years, drug trends were top of mind for everyone. As we have discussed previously, the emergence of Biologic drugs has changed the landscape. Though the incidence of Biologic drug claims, overall, is not significant, the cost per claim is. We are seeing claims of $25,000+, on a regular basis. The cost containment initiatives being taken by the insurance industry focus on ensuring that lower cost medications have been proven ineffective before higher cost medications are approved (prior authorization) or by dictating where the claimant buys their medication. ASSOCIUM’s Specialty Drug Program has been successful at finding alternative funding for Biologics, and other high cost medications, thereby ensuring that individuals receive their medications while diverting claims away from benefits plans.
Going forward, we are closely watching the federal government and whether they will be introducing national pharmacare to Canadians. If this program is initiated, it will have an impact on benefits plans. It remains to be seen how significant the impact might be and whether a pharmacare plan will cover high cost drugs such as Biologics. Regardless, some sort of drug coverage will likely still comprise part of benefit plans to ensure full coverage for employees.
ASSOCIUM clients experienced lower than average rate changes this past year. The average for our block was approximately 2%. For many clients rates for health declined, notwithstanding the incidence of specialty drug claims. However, we don’t expect this to be a trend. Already, the fees charged by dentists are going up more than they did in past years. Dental fees are expected to increase by nearly 4.5% as compared to 2% to 3% in the past. OHIP + (the provincial government plan to pay drug costs for anyone under the age of 24 years) now excludes these individuals when they participate in private plans such as plans provided by their employers or their parents’ employers, if they are still dependent children. We estimate that these changes will drive the health costs back up by an average of 4%.
As previously predicted, mental health has been garnering more attention from the industry. ASSOCIUM has been working with industry partners to promote enhanced programs and offer more access through the co-ordination of standard benefits plans with EAP services related to mental health. Given the focus on mental health generally, we hope the entire industry becomes more creative in this area.
The benefits industry has been struggling with how to respond to the increasing demand for medical cannabis coverage. Most offer coverage on optional Health Care Spending Accounts but not through plans. ASSOCIUM is currently in a trial with our Medical Cannabis partner, Solace Health, to offer medical cannabis coverage as a simpler and more affordable plan upgrade. We anticipate being able to make it available to most interested clients soon.
Over the past year or so, we have seen carriers moving to limit the provision of paper employee plan booklets. At least one large carrier is now charging for paper booklets. ASSOCIUM has already implemented this policy, as we endeavour to reduce paper usage and costs to the clients. It is likely that the entire industry will stop offering free paper booklets within the next year or two.
The next year at ASSOCIUM will be an exciting one as we roll out more products and services to enhance the client and employee experience. New initiatives, such as the mental health program and our medical cannabis offering for example. Additionally, our new Human Resources Information System is already available. Please ask us for details! Of course, our procurement services program has been assisting members in saving costs for business services expenses for decades. Not a member? Ask us about the ASSOCIUM GAIN and ASSOCIUM Advantage programs. As well, our Human Resources support services have already helped many ASSOCIUM clients through their HR challenges. Finally, watch for additional educational opportunities, as we present more webinars and education sessions on-location throughout the next year. It’s an exciting time at ASSOCIUM!
To all, have a great holiday season and New Year!