Financially fulfilled benefit plan ROIs

Gallup finds that fewer than 1 in 5 Canadians are financially fulfilled. One main point highlights how “Financially stressed” people have frequent anxiety about money, often needing to make difficult trade-offs.
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The employee benefit plan is a meaningful part of total compensation. But it’s not just about the premiums an employer pays on behalf of the EE. It’s the financial security the plan brings in the form of insurance sure, but more importantly in the financial security given to plan members who don’t have to worry about the trad off between their prescription and something else.

This doesn’t mean that employees who have benefits never make trade offs. They certainly do. Think about how only 3% of all benefit plans with less then 50 lives have a paramed max more then $500. Do you go to therapy, or do you send your kid to soccer? Think about how weight loss drugs often cost $500 per month. Do you prioritize your health, or do you pay for your car lease?
 
Hard trade offs in the benefit plan are not uncommon for employers either. Do we cover this or cover that? More and more employers are looking for a return on investment (ROI) in the benefit plan in places where historically it was a given, drugs for example. I’m part of the Benefits Canada healthcare survey advisory board. This year we had a discussion around just that. Increasing costs are making it more difficult to enhance the benefit program, the approvals needed to add drug categories that may be separate like vaccine, weight loss, fertility are now driving ROI requests with the hope to answer the question - will the benefit plan change make financial sense now and in the long term?
Whether or not an employer tracks their own ROI, often there is great data to support a change. For example, vaccine coverage.

• Men are 30% more likely to die from pneumonia even when receiving treatment. So prevention is key.
• Employers can reduce absenteeism, employees with pneumonia have five days mean sick time.
• Of workers who contract singles,  57.7% reported worktime loss and missed an average of 9.1 days—and 89.1% said their productivity dropped.
• Of those who didn’t miss work, 66 per cent reported decreased productivity. More than 90% of Canadians over age 50 have had chickenpox and are at risk of developing shingles later in life.

While other plan changes may be harder to connect the dots. For example, will adding weight loss drugs stop or reduce the need for future drugs in other categories? Probably, but how does one calculate the ROI on something that didn’t happen? Over time, as insurers and advisors improve their ability to pull and analyze data, we will be able to make correlations and use data beyond that come from studies.
 
Then other categories beg the question, should an ROI matter? Erectile Dysfunction, fertility drugs and treatments are an example. How do you put an ROI on supporting a valued employee’s journey in starting family? You simply cannot.
Back to our feelings of being financially fulfilled. This is one category for consideration when employers are making their own trade offs. How will the plan change impact the employee’s bottom line? How can that increase or decrease (with plan reductions) their day to day financial security?

• Should you Remove the disp fee deductible or increase vision care by $150?
• Should you increase coinsurance or increase the employer paid portion of the benefits?

With the great advice from an benefit advisor, data on current plan usage can give employers meaningful insights to determine which plan change will have the most beneficial financial impact on their members based on what is in the plan now. And then determine what updates will fit into the budget now, and with projections, longer term.

I’m curious, What are you experiencing with drug ROI requests? Have you incorporated employee financial security into your plan design conversations?