5 reasons why employers should NOT pause benefit plan updates because of national pharmacare and dental care announcements

​5 reasons why employers should NOT pause benefit plan updates because of national pharmacare and dental care announcements:
 
1.  The dentalcare program won’t be fully launched until 2025 if it keeps to the proposed timeline.
2. The dentalcare program has a household income limit of $90,000. This means most employees will not qualify for the program.
3. Pharmacare wasn’t given money in the 2022 budget and will take a long time to launch anything. We have no idea what this program will and will not cover.
4. Drugs and dental costs are rising now and are not slowing down. If you were planning on making plan changes that will help reduce your drug risk, you should still do those.
5. Employee turnover is at an all time high and will continue for the foreseeable future. Group benefit plan enhancements can help you win and keep employees.  

Let’s dig into employee benefit plan updates a little more.
 
The 2021 Driving Data with Decisions – Benefits Strategy and Benchmarking Survey by Gallagher found that 62% of employers have no plans to update their benefit program. In fact, most benefit plans haven’t had an update to the drug plan in over a decade. Why are employers setting and forgetting something that costs anywhere form 5-15% of payroll?
 
It’s all about change – people hate change and if it ain’t broke, don’t fix it. But I would argue that benefits are broken to an extent. Plans we put in place and haven’t updated a decade ago don’t address today’s concerns. Digital, personalized, risk, cost. These have all evolved.
 
Employees want a personalized benefits experience, one that meets their needs (wants) now and in the future as their lives change. Most people, also have a case of the “that won’t happen to me’s” which means employers will need to consider how much they listen to what employees want.
 
To decide what part of the plan to update, and if they should update the plan at all, employers should start by answering this question – what is the purpose of the employee benefit program? Is it a tool to recruit employees? Is it something they just have to offer? Is it a tool to protect employees from expensive life events, like a disability or chronic condonation? Is it a tool to keep employees healthy? From there employers can determine how much they can afford to pay for the plan now and in the future.
 
Once an employer understands what they want to accomplish with their group benefits, they can update the group benefit plan. A few items that all employers should consider as they decide on what updates to make are:

1. Plan affordability - Can I afford a high-cost drug claim? What about two? If these happen what does this mean for future costs of the plan?
2. Plan personalization - Can I spend a little more to offer employees choice through spending accounts? The Benefits Canada Healthcare survey shows years over years how much employees love spending counts, but the large majority of employers still don’t offer them despite the low cost. A $300 spending account would only cost an employer around $345 IF the employee actually used the who thing. But most employees won’t.
3. Relevance - Do I need to update the dental plan? Dental costs are on the rise. This means two things – your dental plan will cost more in the future, and employee’s have less buying power. A $1500 dental maximum doesn’t cover what it once did. I recently had an annual cleaning and including x-rays it cost over $400.
4. Support - Do my employees have the support they need for their mental health?
5. Plan communication - Do the employees know what is currently being offered in the plan, what it’s for and how to use the coverage? What about the many free virtual care and mental health options that are available? I share some of them in a list here.

 

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