How Are Today’s Health Benefits Plans Changing?
The changing labour force is changing benefits plans. The evolving demographics of the workforce demands a re-examination of current employee health benefits plans offered by employers in Canada. In short, as the labour force changes, health benefit plans will also need to change.
How Has The Labour Force Been Changing?
According to Statistics Canada, as of 2019:
- 29% of today’s workforce are baby boomers (up from 24% in 2015)
- 38% of the workforce are Generation X (down from 30% in 2015)
- 37% of the workforce are Millennials (down from 46% in 2015)
How Has Benefits Been Changing?
Millennials in the workforce are the sector that should be growing most rapidly. This group places less value on drug benefits and maximizes other plan areas such as paramedical benefits. In fact, paramedical services have become a rapidly rising aspect of today’s benefits plans.
In a survey conducted back in 2015 by Sanofi, active plan members submitted the following claims annually on average:
- 5 drug benefits claims
- 3 paramedical benefits claims
- 7 dental benefits claims
- 7 vision benefits claims
Of all paramedical benefits claims, 57% were for registered massage therapy and 68% of claimants fell between the ages of 18-34. Registered massage therapy, it could be suggested, is being perceived as a lifestyle benefit.
How Are Benefits Plan Carriers Trying to Adapt?
With a constant shift in the labour force, many benefits plan sponsors and carriers have been testing longer-term eligibility periods for things like paramedical benefits. The goal is to minimize claims that are for recreational use while still rendering appropriate services to those who most need these types of benefits for therapeutic or chronic care.
Some carriers have also bundling paramedical services into a lump-sum allotment, proposing per certificate coverage instead of per insured coverage. Hybrid plan models are also being introduced. According to Benefits Canada, it costs employers as much as 35% of an employee’s Salary annually, in additional compensation.
In 2016, only 23% of employee health benefits plans in Canada had a flexible structure. As many as 64% of those surveyed expressed the desire to have more control over health benefit plans.
For instance, with a Health Care Spending Account, employers can offer their employees more control over their benefits, and employers can save because they will only pay for what has been used.
To enquire about Health Care Spending Accounts or to learn more about how the labour force is changing benefits plans, call Benefit Strategies Inc. in Edmonton, Alberta at 780-437-5070 or send us an email.
