Mental Health Support: A Simple Guide to Providing Mental Health Coverage within your Employee Benefits Program

How employers can support employee well-being within an employee benefits program

As defined by the Canadian government: mental health refers to one’s general state of psychological and emotional well-being. We acknowledge this is a complex and nuanced topic, and that an employer’s role in supporting positive well-being extends far beyond the insurance coverage they offer to employees. However, our focus here is on employee benefit products and services that fall under the ‘mental health’ umbrella.

We are often asked “what more can we do” when it comes to mental health coverage. We have outlined the key areas of coverage for mental health and addressed how they should be reviewed, potentially amended or enhanced, and additional layers or adjacent programs you may wish to consider.

 

Supporting Mental Health: Crisis Response vs Ongoing Care and Support

One thing to consider is an emergency or crisis situation versus an ongoing situation an employee may be struggling with. One may lead to another. While there are many quality resources available for those reaching out during a crisis (there are a plethora of hotlines available to members of various communities, for a wide range of issues or just general support), when an issue requires ongoing professional support, a financial barrier to care may present itself. In this article, we have outlined the various layers of support.

 

Employee & Family Assistance Program; the First Level of Support

Employee & Family Assistance Programs or EFAPs (also called Employee Assistance Programs or EAPs) are well-known for their ability to provide 24-7 phone-based, online or direct support to members experiencing any sort of life event for which they need assistance. As we’ve written about, they offer benefits to both employers and employees. Most EFAP providers have extensive online resources available on a large variety of topics, and these often do not require membership or a login.

Most plans offer some level of face-to-face or virtual counseling. While this varies depending on the EFAP, they are typically best suited to issues that can be resolved in the shorter-term, or where the member would benefit from referral to relevant online or community resources. 

Our experience is that most members who require ongoing support desire to continue with face-to-face or virtual sessions directly with a counsellor of their choosing, who specializes in their area of concern. A downfall of EFAPs can be the inability to continue sessions with the same practitioner, once the limited free sessions expire. In this situation, a member may look to claim under their extended health care program.  

 

Paramedical Practitioners; Reimbursement for Therapist Visits

Paramedical practitioners are a key component of an extended healthcare offering, and depending on the group, may make up a large percentage of overall extended healthcare claims.

While we still see Massage, Physiotherapy and Chiropractor as the top claimed practitioners, those that fall under the ‘mental health’ umbrella have risen in ranking over the past several years. These practitioners include:

  • Certified Clinical Counsellor
  • Registered Clinical Counsellor
  • Registered Professional Counsellor
  • Mental Health Therapist
  • Psychiatrist
  • Psychologist
  • Psychoanalyst
  • Psychotherapist
  • Psychoeducator
  • Social Worker
  • Marriage and Family Therapist

 

This list is not inclusive of many other related practitioners that some carriers are willing to include. If you’re unfamiliar with your offering, we recommend reviewing the booklet or contract to determine which practitioners are included; you may want to expand this offering to allow members a greater breadth of choice.

 

How much paramedical coverage should we provide?

As you may be aware, counselling sessions are extremely expensive, usually well over $100 per visit, depending on the practitioner, type of therapy and region.

A typical plan has $500 of coverage, per practitioner, per person, per year. But keep in mind the providers listed above are usually combined under the dollar limit for “mental health practitioners.”

We often see $750 of coverage these days, and some plans still have lower amounts such as $300. If you do the math, a standard paramedical schedule does not offer many visits to a private therapist.

In an effort to expand the coverage for these categories of practitioners, in recent years we have implemented a higher combined limit (i.e. $1,000 of coverage for these practitioners, while the remainder of practitioners are kept at a lower dollar limit per person per year).

Alternatively, we have provided a specific number of visits, rather than a dollar limit (i.e. 12 visits for mental health practitioners). This is considered a more costly option due to the average per-visit cost.

 

Health Spending Account dedicated to Mental Health support  

For those facing ongoing expenses, for example, routine visits to a therapist, EFAP and paramedical coverage can run out very quickly. To provide an additional layer of support, a Health Spending Account can be used to provide much-needed dollars to employees.

In fact, while barriers to ongoing care due to stigma or lack of resources may have been removed, financial constraints could be the last remaining reason an employee may discontinue therapy, or not seek professional assistance at all.

As you may be aware, Health Spending Accounts can be fully customized these days to include and exclude items, depending on the Employer’s choice. A Health Spending Account can be used to cover mental health-related expenses; however, the employer may choose to define this.

Coinsurance can also be applied (i.e. 60% coverage) with a Health Spending Account, which is an effective tool in directing employees first to their EFAP (potentially), then paramedical coverage under their insured program, and then to their HSA.

 

Long Term Disability Coverage for mental health claims

Unfortunately, many people find themselves unable to complete the duties of their occupation due to mental health issues. Rest assured, so long as the ‘definition of disability’ within the contract is met, a claim related to mental health can be approved and benefits paid. In fact, a large percentage of claims today are mental health-related, with a larger percentage defined as mental health adjacent. 

Members can receive an ongoing monthly income (a disability benefit payment) so long as they continue to meet the definition of disabled. It is important that employers understand this and communicate this to members who may need to explore a long-term disability claim.  

 

Financial well-being and mental well-being are connected

While we consider this adjacent to the more direct mental health support and benefits detailed above, a groups savings program can play a role in supporting wellbeing. As we have written about, personal finances are their number one source of stress, according to employee surveys.

Implementing an employer-sponsored group savings program provides twofold support: employer funds via an employer contribution to the savings plan, and additionally, education and tools to assist employees in creating a plan and getting control over their finances.

 

Steps for Employers:

  • Ensure an Employee & Family Assistance Program is in place; these are often included within your extended health care plan.
  • Review the paramedical offering and ensure appropriate practitioners are included and that coverage levels are as high as affordable to your company.
  • Consider a Health Spending Account to provide additional dollars, as well as flexibility and choice
  • Ensure employees understand the coverage and how to access support and map out how each layer of coverage works.
  • Curate a list (with the help of your advisor!) of good online resources with brief summaries of the support they provide. A simple handout dedicated to this topic, with websites and phone numbers clearly listed, can go a long way.
  • Lastly, include details on all of the above as part of onboarding, but also routinely communicate and update your mental health support program.

 

By offering resources like Employee & Family Assistance Programs, coverage for various mental health practitioners, Health Spending Accounts, and long-term disability coverage, employers can provide additional support for their employees’ mental health and overall well-being.

At the Immix Group, we emphasize the importance of regularly reviewing and communicating the specific benefits offered to employees through their employee benefits program. This ensures they know how to access and utilize these benefits both efficiently and effectively. For any questions about your employee benefits program and whether you can do more to support your employee’s mental well-being, visit us at immixgroup.ca or call us at (604) 688-5559. We love to hear from you!

There are a plethora of free resources and guides available online. Here are a few:

Top 8 FAQ’s

Mental health refers to one’s general state of psychological and emotional well-being. When employers actively support mental health, they show they care about their employees’ overall well-being, which can lead to a happier, more productive workplace with less absenteeism and stronger company morale.

An EFAP, also known as an Employee Assistance Program (EAP), provides 24/7 phone-based, online, or direct support to employees experiencing life challenges. It offers short-term counseling, referrals to specialized resources, and extensive online materials on various topics, helping employees manage their mental health effectively.

Paramedical practitioners, such as psychologists, psychiatrists, and social workers, provide specialized mental health care. Coverage for these practitioners is a key component of extended healthcare plans. Ensuring a broad range of covered practitioners allows employees to choose the best support for their needs. 

Typical plans offer around $500 per practitioner per person per year, but this can vary. Increasing coverage to $750 or more, or offering a specific number of visits (e.g., 12 visits), can provide better support for employees needing ongoing mental health care. 

An HSA allows employers to allocate additional funds for employees’ health-related expenses, including mental health services. It can cover costs not fully covered by standard benefits, helping employees to better afford ongoing therapy and other mental health support. 

Long-term disability coverage provides financial support to employees unable to work due to mental health issues. If the ‘definition of disability’ in the contract is met and the claim is approved, employees can receive ongoing monthly income, ensuring financial stability during recovery. 

Financial stress is a major contributor to poor mental health. Employer-sponsored group savings programs, which include education and tools for financial planning, can alleviate financial stress and support overall well-being.

Employers should ensure EFAPs are in place, review and enhance paramedical coverage, consider implementing HSAs, communicate coverage details clearly, provide accessible resources, and regularly update and promote the mental health support available.

Read more:

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O 604-688-5262 E lindsay@immixgroup.ca
W www.immixgroup.ca

Claim Confusion

Claim Confusion: Common Reasons Why Your Benefits Claim May Leave You "Out-of-Pocket"

Uncovering why you may be left ‘out-of-pocket’ when claiming under your benefits program

Wondering why you’re left ‘out-of-pocket’ despite having a robust benefits program? There is nothing more frustrating than submitting your claim, only to find it’s not covered, or not covered up to the level you expected.

Here are some common scenarios that explain why your reimbursement might fall short of your expectations.

Is it just the plan design?

Of course, benefits programs differ significantly from employer to employer. Often, the reason for a decline is simply the plan design selected by your employer. While a previous employer may have included certain items, your current employer may have opted to exclude the item.

Largely speaking, while insurance companies have varying default plan provisions, most can customize coverage to meet the employer’s preferences. For example, there is a broad range of paramedical practitioners that can be included, beyond the standard practitioners that most people expect to see. Less common practitioners such as Dieticians, Athletic Therapists, Kinesiologists, and Clinical Counsellors can often be included, but may not be standard for the provider.

While the blame is typically placed on the insurance carrier, more often than not, a decline has nothing to do with the carrier’s ability to cover something, but rather to do with the plan design implemented by the employer, based on a range of factors such as benchmarking information, budget, employee feedback, coverage availability for the industry etc. That said, there are many common rules and plan parameters, as outlined below, that are often the reason for a decline.


Is it the timing?

Many items have frequency limits attached to them, or a certain duration of time that must pass before you can claim the item again.

Understanding how the limits are applied is especially important. For example, does the benefit period apply to the calendar year (i.e. 2 calendar years apart), or at the 24-month mark from when the service was last claimed?


Routine Dental Visits  

The most commonly known frequency limitation is the ‘6-month recall’ often attached to routine dental visits. In short, this means that a routine exam and cleaning will only be covered every six months. If you book an exam too soon, your coverage will likely be declined. To clarify, if it is determined during a routine visit that you require follow-up procedures such as a filling, this does not mean you need to wait 6 months for the filling. It is only the routine exam that falls under the 6-month recall frequency limitation.

Some programs use a 9-month recall in order to help reduce costs. If this is not communicated, you may find yourself un-insured if your recall exam takes place too soon.


Vision Care Cycles

Vision care is commonly run on a 2-year or 24-month cycle, and the distinction is important. For example, your plan might provide vision care coverage defined as one of the following:

  • $200 per 24 months- this means you cannot make a second claim until 24 months from the date of the first claim.
  • $200 per 2 years- this means you could claim in 2022 and then again in 2024, even if your claims were as little as 13 months apart, so long as they fall two calendar years apart.

Frequency limits apply to many other common items including procedures for teeth, hearing aids, medical equipment, and medical supplies. Understanding and carefully reading the wording is important.


Does your coverage reset for the calendar year, or for the benefits year? 

While it’s becoming less common, some programs have their benefits reset to match the ‘benefits year’, which is often the anniversary date of the program, or the renewal date (and yes, these can be different!). This could be at any month of the year. This is in contrast to the benefits resetting for the calendar year, which is the more common plan structure.

For example, a plan may indicate a Benefits Year of May 1st– April 30th. If the program offers $500 per practitioner per benefits year, this means you will have the full amount available to you every May 1st.

The norm, and our preference, is to have benefits reset for the calendar year. This is easier for everyone to understand and aligns with the tax year.


Reasonable and customary limits

If you haven’t heard this phrase before, it’s simply the dollar amount of reimbursement that the insurance company will provide, for a particular item. These amounts adjust periodically, and they differ based on location and insurance carrier.

So, in contrast to naming a dollar value in the benefits booklet, it would indicate that the R&C limit applies:

  • Eye Exams once per year to $100 vs.
  • Eye Exams once per year to R&C limit

Often, the R&C limit is higher than a defined dollar limit. When a program has not been updated in a long time, the defined dollar limit can become very outdated and not representative of the average cost of the service in the area. The choice the employer makes in this regard has an impact; implementing fixed dollar amounts can assist in containing claim costs. 

Charging above the dental fee guides

Here’s the scenario: you have 100% basic dental insurance. You go for a regular cleaning, and nothing unusual occurs. When the dental office submits your claim to your insurance provider, you owe a portion of the total. Why would this be? Why is 100% not actually 100%?

In short, most insurance carriers reimburse based on the current dental fee guide in your province of residence. Dental offices, however, can charge beyond these guidelines. 

Did you know?

You can address out-of-pocket expenses effectively with a Health Spending Account (HSA). Many individuals wonder if HSAs can be used to cover uninsured expenses or supplement coverage for partially covered or capped items and the answer is yes!

Learn how a Health Spending Account can enhance your benefits program and provide additional financial support where needed.

In higher-cost areas, this is particularly common (downtown Vancouver or Toronto, for example). So, when the insurer reimburses at 100%, the fine print is that they reimburse 100% of the applicable provincial fee guide.

In some instances, a plan will provide a percentage in excess of the fee guide or will allow for excess reimbursement for specialists (i.e. Endodontist, Periodontist). Again, this differs from carrier to carrier.  

Dental fee guides adjust each year. As we have written about and discussed with our clients extensively, 2022 and 2023 saw much higher than usual increases, whereas 2024 saw a return to more moderate adjustments.

 

Claiming under two plans

Remember earlier when we discussed R&C limits? Well, this comes into play when you are claiming under two plans.

If you are covered under two plans, you claim through your own employer-sponsored plan first, then claim second under your spouse’s plan for any unpaid balance. Many people assume that the result should be $0 left out-of-pocket. However, this is not always the case.

Consider this scenario: You go for a physiotherapy visit, the charge is $160, and you claim under your employer’s plan. In your province with your provider, the Reasonable & Customary limit is $120, which is paid out. This leaves you $40 out-of-pocket.

You then claim the $40 to your spouse’s plan, which covers $0 of the remainder. But why? The reason is that the second provider has an R&C limit that is equal to or lower than your own plan’s limit. The plans have coordinated to the R&C limit.

Unfortunately, having two plans does not always mean you will be reimbursed for a higher dollar amount than under one plan.

Please note: R&C limits can differ quite significantly between carriers and by location; for example, with Manulife Financial, the R&C for physiotherapy ranges from $80 (PEI) to $165 (NWT and Nvt) for a regular visit.

 

Outdated, but standard, coverage limits

Within a program, there are certain extended health care items that have a defined dollar limit of reimbursement, in contrast to others, which do not (i.e. the full cost is covered, at the coinsurance of the program).

These defined dollar limits tend to be quite similar, carrier to carrier. Unfortunately, reimbursement falls short of the actual cost of an item, simply because the industry standard has not kept pace with the actual retail cost of the item. Two examples are:

  • Eyeglasses (especially progressive lenses); while Vision Care amounts can be customized by the Employer, it’s quite common to see $200 per 24 months, which is below the typical cost for certain glasses.
  • Hearing Aids; notably, hearing aid coverage is often at $500 per 5 years, which is far below the typical retail cost for hearing aids which can be thousands of dollars.

In these instances, the employer can request for these plan provisions to be increased beyond the standard insurer provisions. However, these increased coverage limits typically come with a cost.

 

Errors happen, by providers and members

Quite simply, people make mistakes. Most of the time, when we dig into a denied claim, we learn that the provider or member has made an error when entering the claim. A common issue is claiming for the wrong practitioner (i.e. Acupressure instead of Acupuncture), claiming for the wrong duration of the visit (i.e. a physio receipt says subsequent visit and the member claims for initial visit), or simply keying in the wrong numbers from the member ID card.

In one instance, a claim was repeatedly denied, and we learned the child had been entered by the pharmacist as ‘male’ rather than ‘female’ and the system was therefore not aligning the enrolled dependent to the claimant. A simple error, but frustrating nonetheless for the member standing at the pharmacy watching the claim get repeatedly denied!

Periodically, we come across a denied claim for a very uncommon item (often, a medication). In many instances, the item is simply not coded into the insurer’s system, and with a special request, we can often have the item included.

 

Understanding the details, matters

As we have outlined, there are many reasons why your extended health or dental claim may be unexpectedly denied or cut back.

We know that the number one indicator of employee satisfaction with a benefits plan is smooth and understandable claims reimbursement. Denied claims are frustrating and at the Immix Group, we want our clients to reach out to us when they encounter issues with their claims.

Even better, proactively, our goal with our clients is to ensure they understand the structure of their plan, and the various rules and procedures surrounding claims.

Employee education sessions where members can delve into the details of their program and ask questions are very useful and can prevent unneeded frustration for members.

At the Immix Group, we are here to help you make the most of your benefits program and ensure a smooth claims experience.

If you encounter issues with claims or need assistance understanding your coverage, don’t hesitate to reach out at info@immixgroup.ca or (604) 688-5559 – we love to hear from you! 

Key Takeaways

  • Many benefits claims are denied because of the plan design implemented by the employer- they may have chosen not to cover certain items or have implemented specific timelines for cost-saving purposes. It’s important to be aware of these limitations to avoid unexpected out-of-pocket expenses.
  • If in doubt, always ensure you obtain pre-approval for any benefits services or items before proceeding with treatment. Pre-approval helps prevent claim denials and ensures you understand what is covered under your plan.
  • Familiarize yourself with any timing limitations in place for your plan. For example, some services may have frequency limitations or waiting periods between claims. If you’re unsure about any details, reach out to your benefits provider for clarification.
  • Understand the Reasonable & Customary (R&C) limits for services covered under your plan. These limits determine the maximum amount your insurer will reimburse for specific services and usually differ by region.
  • Check with your dentist to understand how they bill for services. Some dentists may charge in excess of fee guides, which could impact your out-of-pocket costs depending on your benefits coverage.
  • Navigating benefits claims can be complex, but understanding the ins and outs of your benefits program is essential for maximizing coverage and minimizing out-of-pocket expenses. Take proactive steps to educate yourself about your benefits plan—review your plan documents, ask questions, and seek clarification from your benefits provider or advisor.

FAQ

Longer durations, such as a 9-month dental recall, are often implemented as a cost containment strategy to reduce claims expenditures within a 12-month period, thereby helping to manage overall program costs.

You or your healthcare practitioner can submit a request for pre-approval. This process is common for dental procedures and other more costly healthcare services, ensuring clarity on coverage and reimbursement amounts before proceeding with treatment.

Not necessarily. While flexibility in coverage can increase with larger employers, insurers must work within provincial health coverage guidelines and adhere to CRA rules/Canadian tax laws. Underwriters may also limit plan designs to avoid excessive claims that could jeopardize the financial stability of the program.

For instance, a smaller group might not have the capacity to offer non-standard coverage like 80% coverage for Major Dental services with an unlimited annual limit. The financial risk associated with such extensive coverage could be prohibitive, especially considering that non-refund insured plans can be terminated without any deficit obligations.

Refer to your benefits booklet or contact your benefits administrator for a detailed list of covered services and items. As well, details are generally available online or through your providers mobile app. Understanding your plan’s coverage terms will help you make informed decisions about healthcare expenses.

Pre-existing condition limitations may apply to certain health conditions that existed before your benefits coverage started. These limitations can impact coverage eligibility for related treatments or services; this is more typically applicable for disability claims or travel claims.

Reasonable and customary charges apply to practitioner services such as these. Coverage for practitioners varies by province and provider and are generally updated annually. Check your benefits booklet or contact your benefits provider to confirm eligibility and coverage details for these services.

  1. If your claim is denied, request an explanation from your benefits provider (an EOB or Explanation of Benefits is usually produced automatically). Sometimes, claims are denied due to incomplete information or misunderstandings. Your benefits advisor can assist in resolving claim issues.

Yes, coordination of benefits (COB) allows you to maximize coverage if you are covered under more than one insurance plan. You’ll first send the claim to the plan you are a member of (primary coverage) for adjudication and payment. Then you can submit any eligible outstanding amount to your other (secondary) coverage. Coordinate with both insurers to ensure you receive the maximum allowable reimbursement for eligible expenses.

Further Reading

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O 604-688-5262 E lindsay@immixgroup.ca
W www.immixgroup.ca

Three Reasons to Implement a Group Savings Plan

We write often about Group Savings Plans, as it’s our belief that one of the best ways employers can assist their employees is by offering them the opportunity to plan and save for the future.

This is a sentiment that is echoed by many in our industry. In their recent 2023 recap, iA’s Director of Plan Member Wellness and Education stated the need to evolve our thinking when it comes to group savings programs, and more specifically, to “develop engagement strategies that focus on supporting people to achieve their personal goals.”

Our interpretation of this comment is that your purpose in setting up a Group Savings Plan should extend beyond simply finding a way to provide more funds to your team, or setting up a plan just because you need to be competitive with similar employers. Employees are self-reporting that they are feeling significant stress, and the number one reason is due to finances. It goes without saying that everyone has many and varied personal goals related to achieving financial peace of mind.

The three reasons to implement a group savings plan we are focusing on here focus on these facts: the support is needed, the tactic is effective, and implementation is simple.

 

 

1. Employees need support when it comes to financial literacy training and tactics to get them on track in this area of their lives

 

As we wrote about previously, a Group Savings Plan targets a key stressor for employees- their finances. The stats are clear, as reported via the 2023 Benefits Canada survey as well as through the Financial Consumer Agency of Canada:

  • 32% of Canadians report feeling a high level of anxiety, stress, or worry over money.
  • Only 49% of Canadians describe themselves as financially knowledgeable.
  • 36% feel they are just getting by, financially speaking.
  • 67% of Canadians said their debt increased by more than $5,000 in the past 12 months.
  • 53% have an emergency fund (2023), down from 64% in 2019.

As the image from the Benefits Canada Survey shows, “Personal Finances” continues to rank #1, followed by Workload and Work-Life Balance.

Screenshot 2024 02 29 at 10.04.40 PM

The answer is not simply to ‘pay people more’. Equipping people with the ability to save in a systematic and tax-effective manner, and contributing to these savings through an Employer match goes a long way. Additionally, and most importantly, Group Savings Programs provide employees access to education resources, planning tools, and financial advisors that they may otherwise not bother to seek out. Access to financial advisors to help employees achieve their personal financial goals, even if it’s as simple as developing a budget to assist with living within one’s means, can create a lasting impact and potentially redirect the trajectory of one’s financial future.

Simply put, a Group Savings Program is an opportunity to assist your employees where they need it most.

 

2. It provides an immediate, twofold beneficial impact as savings grow and taxes are reduced

 

Contributions to an RRSP (Registered Retirement Savings Plan) reduce taxable income. The difference with a Group Savings Plan is that contributions are made directly via payroll deductions.  When employees contribute to an RRSP directly from their paycheque, they experience income tax savings in real-time, as they are taxed on their after-contribution income.

We mentioned earlier the perspective that employers should seek strategies to assist employees in reaching their personal goals. Many employees identify financial goals, and particularly the development of a retirement savings account, as incredibly important.

Over time, and with engagement with the many planning tools available, an employer-sponsored program assists in creating a sense of achievement and tangible progress as retirement savings grow.

An added bonus? The Employer contribution. While not mandatory, this of course serves to boost an employee’s account value, taking them more quickly towards their goal.

 

3. Simple, low touch, high ROI

 

Lastly, it cannot be overstated how simple it can be to implement and manage a group savings plan. In contrast to the requirements of a pension plan, a simple group RRSP or group RRSP-DPSP combination plan is very low touch from an administrative perspective.

Even a very small employer can easily implement a Group Savings Plan that provides similar access to all the features (online platform, resources, investment funds, planning tools, etc.) that a much larger employer offer. It’s a way to recruit, retain, and remain competitive. In short, implementing a group savings plan provides a great return on investment.

Already have a group savings plan in place? Here are a few checkups:

  • Have you taken advantage of our offer to host an education seminar?
  • When was the last time you assessed the contribution level made by the Employer? Has it kept pace with inflation?
  • When was the last time you reviewed Employee contribution levels? Have employees been reminded that they can increase their payroll deductions, again, to keep pace with inflation or changing circumstances?
  • When did you last run an audit of participation levels? Is everyone who is eligible to participate enrolled?
  • Are you aware of and communicating the many comprehensive resources available through your provider and advisor?
 

Help employees to save for the future

 

In summary, implementing a Group Savings Plan is a direct response to the financial stress reported by employees. Beyond immediate benefits like tax-effective contributions and employer matches, it offers a straightforward and high-return solution to recruit, retain, and stay competitive. By addressing employees’ financial concerns holistically, it not only eases stress but also fosters financial growth and supports personal goals.

At the Immix Group, we recognize the importance of financial literacy which is why we offer lunch and learn seminars where we explain, simplify, and guide our clients through their programs to help them maximize their benefits. Additionally, our clients have direct access to our sister company, Ciccone McKay Financial Group, where dedicated advisors are available and ready to provide personalized assistance.

It’s desired, it’s beneficial, and it’s simple to implement and administer! If it’s been on your mind to look into a plan for your employees, we’re happy to help you discuss options.

FAQ

Beyond just funding your team or competing with other employers, it addresses the top stressor reported by employees—financial concerns.

By enabling systematic savings and offering tax-effective contributions, it directly tackles the rising anxiety and lack of financial knowledge reported by Canadians. It also provides employees access to education resources, planning tools, and financial advisors that they may otherwise not bother to seek out.

It offers real-time income tax savings as contributions are made directly from paycheques, creating tangible progress toward personal financial goals.

While not mandatory, this of course serves to boost an employee’s account value, taking them more quickly towards their goal.

It’s simple, low-touch, and offers a high return on investment, making it easy for employers to implement and manage.

It requires minimal administrative effort, making it accessible even for small employers to provide features similar to larger employers.

Implementing a Group Savings Plan enhances competitiveness, contributing to employee satisfaction and loyalty.

Regularly assess Employer and Employee contributions, participation levels, and leverage available resources for ongoing plan success.

Further Reading

Key Conversations in Benefits 2023

Employee Benefits Conversations

Last year our blog “Top Conversations of 2022” proved to be among our most popular articles for the year! Once again, this year, we have compiled a recap of the Top Conversations in Benefits, from our perspective as benefits advisors.

Last year we recapped the top conversations in benefits, which can be summarized as:

  • The ongoing extreme difficulty in hiring reliable, qualified staff;
  • The permanent shift to a hybrid work arrangement;
  • The “Great Resignation” or rather, in Canada the “Great Retirement;”
  • The brand new Federal Dental Plan;
  • The change to the duration of EI Sickness benefits;
  • The continued focus on mental health and wellbeing;
  • And lastly, high inflation.
 

Has it Become Easier to Hire Great People?

According to experts, we should expect the unemployment rate to rise, with the population increasing at levels that are outpacing hiring, due to the arrival of many newcomers. With the job vacancy rate down, employers are able to be more selective with hiring. While this may sound like great news, we are still hearing from our Client Community that it is incredibly challenging to find skilled, reliable employees.

 

Remote or Hybrid Work Arrangements are Still a Key Request for Job Seekers

Related to this, we saw many in our Client Community move to remote workforces or hybrid workforces; not as a hangover from the requirements of the pandemic, but as a desired new norm. The recruiters in our network tell us this is still in the top 2 or 3 for job requirements for job seekers these days.

We wrote about this extensively back in 2022, in our two-part article ‘Is Working from Home an Employee Benefit?” where we looked at many of the considerations and statistics surrounding the (at the time) new reality.

 

Inflation is Impacting Benefits Costs

We touched on inflation in our January 2023 recap, but this became the dominating topic of many benefits conversations as we saw costs increase across a wide spectrum of services: practitioner visits, equipment, drugs, and dental costs. While it’s easy to blame inflation on the rising cost of benefits, the reality is that insurance providers are paying higher per-claim costs in many instances, even when coinsurance and maximum reimbursement limits are in place. This especially impacted dental claim costs, and unfortunately, we anticipate the dental fee guide to increase once again in 2024. The bottom line? Inflation is affecting everyone. This is a global economic issue and is certainly not isolated to those of us here in Canada.

Related to inflation and hiring, wage increases are expected to be modest this year, and economists are not expecting to see wage costs as a notable factor in driving inflation.

 

Pay Transparency Legislation Implemented

It will be interesting to see the potential impacts of pay transparency legislation taking effect in some provinces, including BC. Will pay transparency legislation drive wages up?

With the stated goal of closing the gender pay gap, effective for November 1st 2023, employers were required to post salary ranges for publicly advertised jobs. Furthermore, employers will be required to publicly post gender pay gaps (staggered based on the size of the company, beginning now, and expanding to smaller companies through to 2026.  The stated goal is to reduce unconscious bias around gender and ethnicity.

 

How Should the Employer and the Employee Split the Cost of Benefits?

In 2023, we received many requests for advice and changes related to the sharing of benefits premiums between employers and employees.

Many employers made adjustments this year. For some, in an effort to reduce the burden placed on employees, employers were shifting a greater percentage of the cost to the employer. Other employers went the other direction, looking to see employees cover a great percentage of their benefits premiums. As a reminder, the employer must cover no less than 50% of the total cost of benefits, and tax efficiency is an important consideration when arranging your cost split. We wrote about strategies and common practices back at the end of 2023.

 

Federal Adjustments: EI Sickness Benefits and Long-Term Disability 

The change to EI Sickness benefits via Service Canada which saw the maximum payment period increased from 15 weeks to 26 weeks (6 months), resulted in very little disruption for those with Long Term Disability plans in place. The vast majority of employers kept their Long Term Disability benefits intact with the waiting period at the standard 119 days/ 17 weeks. While this was matched to the previous EI Sickness benefits duration, employers agreed that it was more desirable to have employees move more quickly to long term disability benefits rather than remain on the more limited EI Sickness benefits. Additionally, there were negligible cost savings in adjusting the Long Term Disability waiting period. 

 

The Federal Dental Plan and T4 Reporting Requirements

After years of discussion and development the Federal government launched the Federal Dental Plan, providing coverage for children under 12 only. In order to qualify for any level of coverage, family income must be under $90K, and the children must not have access to private dental coverage (i.e. Employer plans).

As a result of this program, on 2023 T4’s Employers are required to report on Box 45 whether as of December 31st, 2023, their employees were ‘eligible to access dental insurance or dental coverage of any kind, including health spending and wellness accounts, due to their current or former employment”.

The following codes are to be used:

  • Not eligible to access any dental care insurance, or coverage of dental services of any kind
  • Payee only
  • Payee, spouse, and dependent children
  • Payee and their spouse
  • Payee and their dependent children

 

Please note if you have a benefits program that provides dental coverage, the vast majority of employers will report code 3 “Payee, spouse and dependent children.”

The codes above have created a lot of confusion, as they are based on access and not actual enrolment in the benefit for all eligible individuals within the family unit. Specially, if a plan offers family coverage but the member has waived benefits for either themselves or family members, Code 3 still applies as that is the type of coverage available. 

Please note employees must have been eligible for coverage as of December 31st, 2023, for Code 3 to apply (i.e. not still in the waiting period). 

As expected, the Federal Dental plan did not impact existing employer-sponsored dental plans, but changes may be coming, given this was indicated as the first stage in a more comprehensive Federal program.

 

Mental Health Support Discussions Continue to Expand and Evolve

When it comes to discussions with our supplier partners (i.e. providers such as Manulife, RBC Insurance, Pacific Blue Cross, Canada Life and myHSA), we have noticed a movement towards branding themselves as health and wellness driven. More and more services are geared at healthy living, whether this is aimed at improving activity levels, diet and prominently, mental health. In many instances, they are tapping into the data they have on hand to produce customized solutions.

A cornerstone of this is mental health support; all carriers are providing resources and coverage solutions. This is an area where we continue to see plan sponsors increasing their coverage, along with their communication and promotion of available services. Employers added to their mental health offerings in a variety of ways, most commonly:

  • Adding Health/ Wellness Spending accounts to remove financial barriers to mental health practitioners
  • Adding or promoting Employee & Family Assistance Programs
  • Ensuring coverage for applicable practitioners with paramedical services: psychologist, clinical counsellor, social worker
  • Enhancing coverage for the paramedical practitioners with higher limits.

The availability of online, high quality and often free resources is enormous and continuously evolving.

 

An Emerging Trend: Inclusive Coverages

As iA stated in a January 18th communication “today’s employees expect their organization to support them fully in their multiple and diverse needs.” For providers, conversations have focused on a few key areas:   

Gender Affirmation: the cost for gender affirmation procedures not covered under provincial medical has been widely discussed the past few years, and we now have providers including this coverage. For example, Equitable Life rolled this coverage out late 2022, with the stated aim of “offering solutions that support diversity, equity and inclusion.” We expect to see more providers rolling out gender affirmation coverages.

Fertility, Surrogacy, Adoption: despite fertility problems affecting one in six couples hoping to conceive, fertility coverage has traditionally been limited to drugs and often with a defined annual limit. A concern for many was uncovered related costs, such as for procedures.

iA is one provider that has provided what they call “Family Support” coverage, where in addition to drugs, care and treatments such as doctors’ fees and lab services, are also covered, including for surrogates.  Additionally, on an ASO basis, iA is offering Adoption coverage for costs related to the adoption of a child.

While many of these costs have been eligible through Health and Wellness Spending Accounts, it is new to see insurance providers identifying and defining these coverage areas.

 

Diabetes and Adult ADHD Medications on the Rise

Adult ADHD claims have steadily increased over the past several years. We now routinely see Vyvanse, a leading amphetamine-based drug for ADHD as one of the top claimed medications for the employers with whom we work. As Manulife shared, this is “recognized more widely as a condition that continues into adulthood.” In short, the kids diagnosed and medicated for ADHD are now adults, who have continued to be medicated. In addition to this, there is major rise in adult diagnosis of ADHD, which is being credited in part to increased awareness through social media. In particular, there is an increased diagnosis for women, as we now have a greater understanding of how differently the symptoms present in men vs women.

Diabetes has been on the rise for many years now; 30% (12M Canadians) live with diabetes or prediabetes, with over 90% Type 2. As well, the data shows diabetes diagnoses are increasing among younger age groups.  We are seeing diabetes medications such as Jardiance, Trulicity and Metformin continually in the top ten claimed drugs for many clients.

 

Ozempic Dominates Drug Conversations

But without a doubt 2023’s “most frequently asked question” relates to the costly Type 2 diabetes medication Ozempic (Semaglutide) which is a daily injectable. This blockbuster drug is approved in Canada for the management of Type 2 diabetes; however, it is extremely popular for its well-known side effect, weight loss. This drug was all over the news, with celebrities endorsing it for its ability to curb one’s appetite, leading to quick and significant weight loss.

In short, members wanted to gain access to the drug, most often for weight-loss purposes. However, the drug here is BC requires Special Authority approval. To be approved, you must require it for treatment of type 2 diabetes, “After inadequate glycemic control on maximum tolerated dose of metformin.” Unfortunately, in Canada, getting Ozempic is not as simple as just requesting it from your doctor!

 

What to Expect for 2024?

Here at the Immix Group, 2024 has been very busy so far! Many employers are asking for ideas to better meet the needs of their employees, and looking for details on what their employees are claiming in order to better customize their benefits offerings.

We unfortunately continue to see claims rising and expect this to continue through 2024, and therefore expect to have many conversations with employers regarding cost containment strategies.

As always, we welcome you to reach out to discuss optimization strategies for your benefits programs.

FAQ

The key topics revolved around the challenges in hiring, the shift to hybrid work arrangements, the “Great Retirement,” the Federal Dental Plan, changes to EI Sickness benefits, a focus on mental health, and the impact of high inflation.

Employers are able to be more selective, with many newcomers meaning there are many job seekers; however, employers are still reporting a difficulty in finding skilled employees.

Yes, remote or hybrid work arrangements continue to be a top priority for job seekers, indicating a shift from a pandemic necessity to a desired norm.

Inflation has driven up costs across various services, impacting practitioner visits, equipment, drugs, and dental expenses. Insurance providers are facing higher per-claim costs, especially in dental claim costs.

Pay transparency legislation, effective from November 1st, 2023, requires employers to post salary ranges for publicly advertised jobs in an effort to close the gender pay gap.

Many employers adjusted their benefits cost-sharing strategies in 2023. While some shifted more costs to employers, others leaned towards employees covering a greater percentage. Employers must cover at least 50% of the total benefit cost.

EI Sickness benefits saw an increase in the maximum payment period to 26 weeks (end of 2022). This change had minimal disruption for those with Long Term Disability plans, with waiting periods mostly unaffected.

Employers must report on Box 45 of 2023 T4s whether employees were eligible for dental coverage as of December 31, 2023. Specific codes are provided for different eligibility scenarios.

Carriers are increasingly focusing on mental health, providing resources and coverage solutions. Employers enhance mental health offerings through various means, including Health/Wellness Spending accounts and Employee & Family Assistance Programs.

There is a growing trend towards inclusive coverages, including gender affirmation procedures, fertility, surrogacy, adoption, aiming to support diverse needs and promote diversity, equity, and inclusion.

Adult ADHD claims have increased steadily, with a rise in adult diagnoses, attributed to increased awareness. Diabetes diagnoses, particularly Type 2, are on the rise, impacting medication claims. The most frequently asked question is about the costly Type 2 diabetes medication Ozempic (Semaglutide), frequently sought for its weight-loss side effect.

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O 604-688-5262 E lindsay@immixgroup.ca
W www.immixgroup.ca

Understanding Cost-Sharing in Employee Benefits

Understanding Cost-Sharing in Employee Benefits: The Employer’s Role in Premium Contributions and Standard Practices

 

Introduction

In the fiercely competitive job market, employee benefits play a crucial role in attracting and retaining top talent. Among the many decisions that employers face in crafting an appealing benefits package, one of the most significant is determining the benefits premium cost-sharing arrangement between the company and its employees.

This article aims to delve into the complexities of ‘cost-sharing’ and shed light on standard practices for designing sustainable and attractive employee benefit programs.

Firstly, if you were not aware, it’s quite common for part of the cost of the benefits program to be paid for by employees via payroll deduction. This is typically a ‘condition of employment’ and is outlined in a contract of employment. Premium amounts can vary significantly depending on the scope of the program, the demographics of the group and other factors, meaning the dollar amount of the payroll deduction can differ significantly from employer to employer. No greater than 50% of the overall cost can be passed along to the employee, per insurer guidelines. The “cost sharing” per benefit line is indicated to the insurance carrier at the implementation of a program, and most carriers will indicate the “employee” and the “employer” premiums, per benefit line, on each monthly invoice simply to assist with payroll.

 

What should Employers consider when determining cost-sharing?

The cost-sharing ratio between employers and employees is not a one-size-fits-all equation. It depends on a multitude of factors, including:

  • the size of the company,
  • plan design,
  • the premiums in dollars for various benefit lines,
  • demographics,
  • employee classifications,
  • and of notable importance, the tax implications.

Striking the right balance requires careful consideration, and the differing taxation of various benefits (link to taxation of benefits page) is usually one of the primary considerations.

 

Three different ways to view Cost Sharing:

An employer might approach cost sharing by considering the benefits to be covered by the employee:

  • Employee pays Long Term Disability premiums only
  • Employee pays all pooled benefits premiums (Life, AD&D, Disability and Critical Illness).
  • Employee pays all pooled benefits premiums plus 50% of health and dental premiums

In all the above scenarios, the Employer must ensure that no greater than 50% of the overall cost is passed along to the employee.

Alternatively, the employer might apply a percentage to the entire cost of the program, with the maximum allowable percentage of 50%. For example:

  • Employee pays 25% of total premium costs.
  • Employee pays 50% of total premium costs

In the event that a percentage is applied, the premium should be applied first towards the benefits for which an employee-paid premium ensures a tax-free benefit (most notably, Long Term Disability). The tax implications of cost sharing should be carefully considered in order to reduce or eliminate the possibility of a taxable benefit.

Less commonly, an employer might charge a flat dollar amount:

  • Employee pays $25 per pay period towards benefit premiums
  • Employee pays $100 a month towards benefits premiums

Regardless of the approach to cost sharing, the formula must be viewed with the actual dollar amount of premiums taken into consideration, per benefit line.

 

How should an organization approach cost-sharing? What is typical?

As mentioned, it is essential to understand the cost for the various benefit lines (and yes, these change year to year!) and the tax implications. In addition, employers must consider how their cost-sharing arrangement compares to their industry, and to their particular company’s philosophy. Beyond the tax implications, there are several factors that influence the cost-sharing structure:

  1. Plan Design: The specific design of the benefits plan can impact the appropriate cost-sharing scenario. For example, a plan with high life and disability coverage may see higher premiums for these benefits.  If the employee is covering these premiums for tax reasons, the employer may wish to cover 100% of the remaining benefits.
  2. Industry Norms: Employers often look to industry benchmarks to ensure their contribution levels remain competitive and appealing to potential employees; what are your main competitors doing? If your primary competitors are advertising that they cover 100% of benefit premiums, you may need to follow suit.  
  3. Company Size and Financial Resources: The financial capabilities of the company, combined with its size, can influence the employer’s ability to contribute significantly. Generally speaking, larger, most established companies tend to cover a greater share of benefit costs, because they can afford to do so. 
  4. Talent Demand: In high-demand talent markets, employers may need to offer higher contribution levels to attract and retain top performers, in addition to offering a more comprehensive program.
  5. Company Philosophy: what are the core values of your company, and how does your cost-sharing formula fit into this?

 

Balancing Employee Needs and Cost Containment

Employers face the delicate challenge of balancing attractive benefits with cost containment. While it is vital to provide robust benefits that meet the diverse needs of employees, it is equally crucial to manage expenses efficiently.

Beyond the cost-sharing of the premiums, please keep in mind that the plan design itself offers an element of “cost-sharing” through coinsurance and deductibles, and additionally, through reimbursement limits. Please consider:

  1. Deductibles: flat deductibles are paid out-of-pocket before coverage is applied; while deductibles can incentivize employees to be more conscious of their benefit usage, thus reducing unnecessary expenses, they penalize lower claimers and are less common these days.
  2. Co-Insurance: this refers to the percentage of coverage, such as “80%” for basic dental. Co-insurance requires employees to share a portion of the costs for specific services, encouraging them to make more informed healthcare choices.
  3. Reimbursement limits; items may have limits that leave the employee out-of-pocket for the remainder of the cost (i.e. orthotics that cost $500 for which the employee only receives $300 back). Potentially in combination with points 1. and 2. above, reimbursement limits can erode the overall percentage of an expense for which an employee is covered. 

All of the above can encourage employees to make informed choices when it comes to their healthcare spending. However, with most employers stating that the overall goal of a benefits program is to facilitate employee health and wellness, employers should be mindful that employees are not bearing too great of a costs for their coverage, from a holistic perspective.

As we said, approaching the cost-sharing that is right for your company is not one-size-fits-all; you need to carefully consider the factors outlined above, and work with an experienced advisor to ensure the right approach that allows for excellent coverage in combination with cost-sustainability.

Conclusion

Decoding cost-sharing in employee benefits is a complex task that demands careful consideration of multiple factors. Employers must keep abreast of industry trends, assess their financial resources, and regularly evaluate their benefit packages to ensure competitiveness and relevance in the job market.
In today’s competitive landscape, employers must recognize that ongoing evaluation and adjustment of benefits packages are necessary to attract and retain top talent. By striking the right balance between attractive benefits and cost containment, employers can demonstrate their commitment to their workforce’s well-being while maintaining financial sustainability. The key lies in crafting a benefits package that aligns with the company’s values, meets the evolving needs of their employees, and supports the organization’s overall goals.

FAQ

Cost-sharing in employee benefits refers to the arrangement where both the employer and the employee contribute to the cost of the benefits program. It helps strike a balance between providing attractive benefits and managing expenses.

Several factors influence the cost-sharing ratio, including company size, plan design, benefit premiums, demographics, employee classifications, and tax implications. Striking the right balance is crucial for an effective cost-sharing strategy.

Employers can approach cost-sharing by considering the benefits to be covered by the employee, applying a percentage to the total premium costs, or charging a flat dollar amount. Each approach has its considerations and implications.

Industry benchmarks and norms are essential considerations when determining cost-sharing arrangements. Employers often align their contribution levels with industry standards to remain competitive and appealing to potential employees.

Employers must balance attractive benefits with cost containment strategies. This includes considering elements like deductibles, co-insurance, reimbursement limits, and designing a benefits program that promotes employee health while managing expenses efficiently.

The ultimate goal of a benefits program, including cost-sharing strategies, is to facilitate employee health and wellness while ensuring employees are not burdened by excessive costs. It’s about providing excellent coverage in a sustainable manner.

Employers should regularly evaluate industry trends, assess their financial resources, and work with experienced advisors to ensure their cost-sharing approach aligns with industry standards and meets the needs of their workforce.

Decoding cost-sharing in employee benefits requires careful consideration of multiple factors. Employers need to maintain an ongoing evaluation and adjustment of benefits packages to attract and retain top talent while ensuring financial sustainability. The key is crafting a benefits package aligned with company values and employee needs.

Key Takeaways
  1. Importance of Cost-Sharing: Cost-sharing in employee benefits is a vital strategy that helps strike a balance between providing attractive benefits and managing expenses, ensuring both employers and employees contribute to the cost of the benefits program.

  2. Factors Influencing Cost-Sharing: Several factors, including company size, plan design, benefit premiums, demographics, and industry norms, influence the cost-sharing ratio between employers and employees. Employers must carefully consider these factors to determine an effective cost-sharing arrangement.

  3. Diverse Approaches to Cost-Sharing: Employers can approach cost-sharing in different ways, such as defining specific benefits for employee contribution, applying a percentage to total premium costs, or charging a flat dollar amount. Each approach has its considerations and implications.

  4. Balancing Employee Needs and Cost Containment: Employers face the challenge of balancing attractive benefits with cost containment. Elements like deductibles, co-insurance, and reimbursement limits play a crucial role in promoting informed healthcare choices while managing costs effectively.

  5. Ongoing Evaluation and Adaptation: Employers must regularly evaluate industry trends, assess their financial resources, and work with experienced advisors to ensure their cost-sharing approach remains competitive and relevant. It’s essential to align the benefits package with company values and the evolving needs of employees for long-term success.

Howard 2

Virtual Health Care is Everywhere

Virtual Health Care is Everywhere: Employer vs. Free Options, and the latest in Offerings.  


Back in 2020, we wrote about virtual care offerings, at the time prompted by the pandemic and the lockdown we were experiencing, which made routine doctor visits close to impossible.

While virtual care was available pre-pandemic (in fact, it dates back to around 2006), it was inconsistent and sometimes difficult to navigate. One silver lining of the pandemic is that the virtual healthcare space has exploded with new and expanded platforms, offering individuals and businesses a variety of options to meet a range of needs.

The shortage of family medicine providers, compounded by a severe cold and flu season has made virtual care offerings even more valuable in recent months. A huge number of Canadians do not have a family doctor, and for those that do, booking a same-day appointment is often extremely difficult, if not impossible. While an in-person visit is certainly warranted in many instances, sometimes a virtual visit will suffice, and it can definitely be more convenient: no commuting, parking, waiting rooms.

Studies show that over 50% of doctor’s visits could be handled without direct contact, meaning a virtual visit will suffice to resolve the concern. Through most virtual providers, you can access:

  • Diagnoses
  • Prescriptions
  • Sick Notes
  • Lab work orders, such as blood tests
  • Referrals to specialists
  • Imaging referrals (Xray, Ultrasound)
  • Mental health inquires and referrals

While all providers prescribe medications, they do not prescribe or refill narcotics and addictive controlled substances.

Table of Contents

Free vs Paid Options


You may have noticed the existence of free virtual health care offerings versus paid programs that can be purchased either by businesses for their employees, or even by individuals.

Why pay for a Virtual Health Program, with so many free options?


Employers can add Virtual Care programs to their benefits line-up. A typical paid employer-sponsored program means an enhanced experience, such as:

  • Wait times: free options are becoming heavily used, and wait times are becoming longer. Paid options guarantee quicker access.
  • Longer hours of availability; many paid options offer 24-7 care, in contrast to free versions.
  • Coverage for those in provinces/territories where virtual visits are not insured: currently only BC, Ontario, Alberta and Quebec cover virtual doctors visits under provincial care
  • Direct access to many specialists: often common specialists like dermatologists or pediatricians can be accessed through enhanced programs
  • Beyond regular medical doctor’s visits: practitioners are often available through enhanced paid programs such as counsellors and dieticians, naturopaths and most notably, mental health services.
  • Reporting: usage / ROI data is available through some providers

While the cost ranges, many of these programs are available as add-ons to your existing benefits program for a few dollars per employee, per month.

For example, Manulife’s program is provided through Telus Virtual Health Care and is available as an add-on to an insured plan for $3.95 per employee per month. Like other similar programs, it offers an app with 24-7 on-demand access to health providers via secure text, video, and live chat. Maple Virtual Health is another well-known and highly regarded offering that is also available through many insurance providers (RBC Insurance, for example). Maple Virtual Health can also be purchased stand-alone by employers, and it does provide some ability for free visits to non-members in qualifying provinces, but they are tapering this back to focus on employer-sponsored programs. Telus Health is the best known and largest of the virtual health platforms and offers employer-sponsored programs. It is worth noting that Telus Business mobility customers have access to the paid version of the Virtual Care program for free!
Virtual Health Care is Everywhere: Employer vs. Free Options, and the latest in Offerings

Free Virtual Healthcare Options


Depending on your province of residence, you may be able to access free doctor’s visits through some virtual providers. Some provinces cover virtual doctor visits, meaning you will pay no fee to access a doctor online (the doctor will bill the province, as they usually would with an in-person visit).

For residents of BC, Alberta, Ontario and Quebec, visits are free under some platforms. For those in other provinces, accessing a virtual provider typically costs around $30-40 per visit.

Most of these virtual providers connect via phone, live chat, video or secure text in order to connect with patients. The following are two notable virtual health care providers:

  • Telus Health – Telus has acquired numerous other providers and continues to dominate the virtual healthcare landscape. As mentioned previously, Telus Business mobility customers have access to the paid version of the Virtual Care program for free. The Telus Health MyCare app can be downloaded for free, and in covered provinces, doctor’s visits are billed to the province.
  • Tia Health One of the most well known and highly regarded platforms, with an easy to navigate system, Tia offers access to doctors, nurses and pharmacists by phone, video or secure messaging. Tia has also acquired a number of other virtual health providers, so has greatly expanded its network of clinicians.
  • Well Health Virtual Clinic Branded as a virtual walk-in clinic, this provider focuses on doctors visits, simple access to prescriptions and requisitions, and is free in covered provinces. A unique feature is you are able to choose your doctor from their listing.
  • Cover Health– Another virtual “walk in clinic” this platform is free in Ontario under OHIP and offers same day appointments, 7 days per week.

Virtual Mental Health Platforms


Accessing quality mental health services is difficult, and a significant barrier for many people is simply leaving the house. Accessing support through easy to navigate virtual platforms can be life changing. While the cost of the programs can be notable (the per-visit cost can be similar to an in-person session with a credentialed therapist), this can typically qualify under Extended Health paramedical coverage or through a Health Spending Account.

Two notable mental health platforms are:

  • MindBeacon With a focus on mental health support, specifically, Cognitive Behavioural Therapy, MindBeacon is highly regarded in the virtual mental health support space. As the online practitioners are credentialed psychologists or social workers, fees can typically be submitted through benefit plans.
  • Inkblot Launched in 2018, Inkblot Therapy strives to alleviate the extremely long wait times that many people face in accessing mental health support. As a platform focused exclusively on mental health, Inkblot offers confidential virtual therapy, CBT, continuity of care, webinars and training, trauma and treatment services, chronic disease management, psychiatric consultations and collaborative care, work and life support

Virtual Health is here to Stay!

The pandemic provided the opportunity for expansion and innovation in the virtual health landscape. While there will always be the necessity for in-person medical treatment and virtual offerings should not be exclusively relied upon, they do solve numerous problems people face in accessing healthcare, and provide a comfortable and convenient alternative, where appropriate.

Whether you choose to implement an employer-sponsored paid program or not, employers should take the time to ensure employees are aware of the virtual health landscape, and the options available to them. There are many educational materials available that can be distributed to employees to assist in spreading the word.

Please feel free to reach out if you’d like to learn more. We love to hear from you!

FAQ’s on Virtual Care

Can a virtual health care provider prescribe medication?

Yes, this is one of the core services, however they will not prescribe controlled or addictive substances.

Can I see a specialist through a virtual care provider?

Sometimes, yes but more commonly you must still be referred to a specialist by a regular GP. Under some paid programs, specialists can be accessed.

Can I access virtual care if I’m not in one of the provinces where it’s insured under provincial coverage?

Yes, the same service is available, but a per-visit cost is charged that starts around $30. Subscriptions to virtual care platforms are available as well.

Can I see my own doctor through virtual care?

It depends! If your doctor works for one of the providers, you may be able to see them through a virtual care platform. Or they may provide this through their clinic.

How do I connect with a virtual provider?

Typically, you will engage online through your computer, table or smartphone. Once booking an appointment, you can usually choose a phone call, text, live chat or video conferencing for the appointment.
telehealth plan insights by Immix Group

Key Takeaways

• Virtual health platforms today offer a convenient and effective solutions for many medical concerns.
• There are numerous free virtual health platforms available today.
• Paid options typically provide enhanced services, namely guaranteed quicker access.
• All Employers should promote virtual health care offerings to their employees, whether or not you provide an Employer-paid version.
Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O 604-688-5262 E lindsay@immixgroup.ca
W www.immixgroup.ca

8 Reasons for Increases to your Employee Benefit Plan Premiums   

Pondering the question: “Why do my benefit plan costs keep going up?” We’ve got answers.

If you’ve walked away from your renewal meeting scratching your head at the rate adjustment, you’re unfortunately not alone. Many advisors don’t do a great job explaining a rate change, and the math used by insurers can be quite (unnecessarily!) complicated. Our goal with this article is to give you insight into what causes rates to increase or decrease, and hopefully help you to better understand your program and what you can do to achieve cost sustainability.

Renewal rate reductions DO happen! We promise.

Before we get into why rates increase, we’d like to point out that for many of our clients, they see their rates reduce from time to time! Approximately 30-40% of our clients in a given year experience an overall rate decrease, rather than an increase.

We conducted a quick review of our block of business, and for their 2022 renewal rates:

  • 43% of our clients saw a reduction to their Extended Health Care rates
  • 30% of our clients saw a reduction to the Dental Care rates
  • 75% of our clients saw their pooled rates held without change

It’s a fact! Employee benefit program rates do not always increase, even in times of high inflation.

We want our clients to understand how benefit plan pricing works

During a renewal meeting, one of our primary goals is to ensure that our client understands WHY rates adjust. One of our key values at Immix is transparency; showing the details of the claims experience and how the rates are calculated is important to us.

First, as your advisor, we are responsible for determining fair pricing is presented to you for the year ahead. On a typical non-refund insured program, this means assessing the claims experience and projecting the required premiums for the upcoming renewal year, using some basic mathematical formulas. We look closely at the composition of the claims, the inflationary trends applied, the IBNR (Incurred But Not Reported) factors etc., but once we are satisfied we have arrived at fair pricing, our goal is to ensure you also understand.

However, if you’ve walked away from a meeting with your benefits advisor and you’re googling to attempt to understand why your pricing has increased, here are some insights:

1. Your claims experience is high.
This is the obvious one! In short, what was paid out in claims was too high relative to the premiums you paid for the benefit. This applies to health, dental, and to an extent, short term disability.

In very simple terms, if you paid $100 in premiums, and the claims paid back to members were $125, you have a Paid Loss Ratio of 125%. If you paid $100 in premiums, and the claims paid back were $50, you have a Paid Loss Ratio of 50%. While other factors come into play some of which are described below, in short, the premiums need to be sufficient to cover the claims, at a certain break-even mark.  

2. Your group is not fully credible/ has low credibility.
What is credibility? The simple explanation is that it’s the portion of your own claims experience used in the renewal rate calculation, versus the percentage that is based on the insurer’s block of business or manual rates. This is expressed as a percentage.

With Credibility of 25%, this means that 75% of the experience used to calculate your rate adjustment is based on the insurers block of business or manual rates, not your own claims experience. This can have the effect of helping or hurting your renewal rate calculation, depending on whether your claims experience is better than or worse than the insurer’s.

Credibility is based on the size of the group and the number of years with the insurer. The larger and longer you are with a carrier, the higher the credibility. It’s worth noting that within Immix Group’s broker-managed pools, we have full credibility for all groups, from day one.

More Reasons for Increases to your Employee Benefit Plan Premiums

3,Inflationary trends come into play.
Benefit programs are not immune to basic inflation, and an inflationary factor is incorporated into rate calculations.

Firstly, inflation affects claim costs, including fees charged by benefit providers such as paramedical practitioners, medical supply offices and dental clinics. In particular, we saw a huge increase to the 2022 Dental Fee Guide in BC, at 7.35%. With inflation hitting everything right now from groceries to gas to wages, you can also expect to see claims dollars increasing, across the board.

When calculating the renewal rates, the anticipated higher cost of future claims is taken into account.

An inflationary trend* is typically applied to the paid claims (along with the change in IBNR reserve) to arrive at the Incurred Claims, the number that is used in the calculation to project the required premium for the year ahead. Although the term “Incurred Claims” is a bit confusing, it’s basically your claims, trended for inflation and reserve adjustments.

4.You have a low Target Loss Ratio.

This might be based on the size of your group, how long you’ve been with the carrier, or perhaps you are inside of a pool. Nevertheless, this directly affects your renewal rate calculation under a typical insured plan.

If you’re not familiar with this term (read more here), Target Loss Ratio refers to the ‘break-even’ mark for the experience-rated benefits (typically health and dental, and partially, short-term disability). The Target Loss Ratio is the goal as far as where the Incurred Loss Ratio will fall, for the plan to not lose money. Assume the following:

  • 75% Incurred Loss Ratio, and 72% Target Loss Ratio
    • 75/72= 1.0417 (a 4.17% rate increase applied)
  • 75% Incurred Loss Ratio, and 84% Target Loss Ratio
    • 75/84= 0.8929 (a -10.71% rate decrease applied).

As illustrated, Target Loss Ratio is a key factor in your renewal pricing calculation. It’s a reflection of the costs to run the plan and includes the payment to the advisor.

5.You’re inside a pool where the experience of the pool drives your pricing.

Perhaps you had very low EHC claims, but the rates are still going up 15%, because under the pool model you are in, everyone in the pool gets the same adjustment based on the overall experience of the pool. Fair? Not at all. However, that’s how many pools are managed.

Even worse (in our opinion!) if you’re inside a pool where you are not allowed to see a breakdown of the types of claims or even the claims dollars compared to the premiums, you have no way of knowing if your pricing is fair. While it’s a lot easier for the advisor and insurer to give everyone the same rate adjustment, in addition to unfairly punishing groups with low claims experience, it doesn’t provide the transparency needed to properly manage the program.

6.You have aging demographics or a generally ‘older’ group.

We have discussed mostly the factors that affect health and dental pricing, but the pooled benefits (Life, AD&D, Dependent Life, Disability, Critical Illness) are also subject to rate changes. These are primarily driven by shifts in the overall group of people with regards to the headcount, male vs female split and the distribution over age brackets. As a group becomes “older” or there are higher concentrations of people in the older age brackets, rates tend to increase for pooled benefits.

A higher percentage of males vs females will drive life insurance rates up, whereas the opposite is true for disability pricing; proportionately more females drives the disability pricing up. This is simply a reflection of mortality and morbidity tables (likelihood of death or disability, respectively).

For the health and dental, an “older” group also will impact claims. Older groups are more likely to claim for prescription drugs, and often the more costly and ongoing drugs associated with chronic conditions. When it comes to Dental, older people are also more likely to be claiming for more expensive procedures such as crowns, bridges and dentures as opposed to just regular cleanings.  

Other Reasons for Increases to your Employee Benefit Plan Premiums

7.Your plan was set up with manual pricing.

Perhaps you are setting up group benefits for the first time meaning there is no claims history for your group of employees. The pricing that is implemented when a group is first established is based primarily on the demographics of the group, in combination with the selected plan design (known as book rates, or manual rates). As there is no information as to the medical or dental needs of the group, the pricing is really just an estimate based on data held by the insurance carrier. After the expiration of the initial rate guarantee period (15-24 months, or even longer for some benefits), the rates will be adjusted based on the factors described above for a typical non-refund insured plan. What may happen is that claims are far higher than estimated, meaning a rate increase is required. Alternatively, you could see your rates drop.

8.Your plan was set up with discounted pricing when you moved carriers.

Perhaps you decided to switch insurance carriers due to the reduced pricing presented to you. If it was not carefully analyzed and explained, you may be surprised to see a large increase at the first renewal with the new carrier. One reason for this is to recoup the sales discounts that were applied to entice you to make a move.  As we have written about, sometimes a discount is warranted (i.e. in assessing the claims ratios, the rates were too high) and sometimes they are illogical (the premiums proposed are far less than the historical claims). It is when the proposed rates seem far too low, where one needs to be cautious.

These discounts can be significant; insurers can offer 15%, 20% even beyond 30% discounts to obtain business, along with lengthy rate guarantees. As moving a group can be onerous, they anticipate they will likely retain the business for at least a few years, so will have the opportunity to increase the rates and recoup any sales discounts.

 

The answer? There are a lot of reasons for pricing to go up, but also reasons it can reduce.

 

As you can see, there are a variety of reasons why benefit plan pricing changes, whether it relates to your people, your pricing model, the broker and/or insurer you’ve engaged, or quite simply factors going on in the world. Working with an experienced and qualified employee benefits consultant is essential in ensuring your program remains sustainable for your organization.  

*Inflation: This is often expressed with a time lag factored in, so the number you see is higher than the annual expected inflation. For example, if the inflationary trend is displayed as 14%, this is divided by 12 and spread over the full year plus the additional months to the point the rates will change. Therefore, 14% over 16 months is actually 14/16×12= 10.5% inflation.

FAQ’s

Not always. For fully-insured non-refund plans, rates can increase or decrease depending on the claims experience of the group or shifts in the demographics.

The credibility of a group refers to the portion of the groups own experience that is included in the renewal rate calculation.  

This refers to the ‘break-even’ mark for the program, or the projected point of profit vs loss for the experience-rated benefits, for the insurance carrier.

The ratio of paid claims, trended and with reserve adjustments factored into the premiums, expressed as a percentage.

The ratio of the paid claims to the premiums, expressed as a percentage. 

These are the ‘book rates’, or the rates used by an insurance company based on the demographic composition of the insured group, in combination with the plan design.

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O 604-688-5262 E lindsay@immixgroup.ca
W www.immixgroup.ca

One size fits all? Not when it comes to employee benefits.

Yes, it’s possible to gain the pricing advantage found within a benefits pool while also having control over your plan design!

When we begin discussing the strategy that Immix has created when it comes to group benefit plans one of the first questions we are asked is whether belonging to a benefits pool means having to implement a specific benefits plan design for your company. The short answer? Absolutely not! We know that one size does not fit all. The needs and wants of an organization when it comes to benefits vary dramatically, and our role includes not only ensuring you’re able to implement exactly what you want, it’s helping you to design the right program.

 

 

Standard plan designs don’t make sense- because every business is different.

Businesses view their benefit plans differently, and the structure and offerings of the programs reflect this. There is no real ‘right or wrong’ but there is effective and ineffective at reaching your desired outcomes.

Ensuring your benefits plan fits into your overall compensation model, matches your business’ philosophy and values, and does what it’s intended to do is not simple! This is where experienced advisors play a huge role. We know the market, we know how to design cost effective strategies, and we can help you achieve your goals.

 

 

But you know your people best

You probably have a good gut instinct as to the needs of the people that comprise your organization, especially if you’re a smaller team. You likely have demographic data on the age and sex breakdown of your group as well. But the key word here is ‘people’! It’s easy to get caught up in making assumptions based on the demographic profile of an organization.

And yes, there are many generations in the workplace today and there are certain characteristics we tend to assign to different generations. Generations in the workplace is one thing, but people are still people. Just because you’re 25, doesn’t mean you don’t have a chronic illness.  And just because you’re 65, doesn’t mean you don’t want a wellness spending account to cover your gym memberships and supplements.

While we tend to focus on age groups when we’re discussing benefits, we want to acknowledge that as individuals, we have vastly different needs, regardless of where we fall in the generational tagging system. There are also geographic and industry differences that affect what the benefits plan offering should look like. Understanding exactly who your people are is the key to designing just the right program.

 

A little data goes a long way

Knowing your people is one thing, but translating this into the correct scope for your benefits offering is something else. This is where the team at Immix Group comes in; you might need our help to survey your staff, to analyze your historical claims experience, or to walk you through programs and services that may be new to you. If you’re like a lot of employers, you might be seeking to add flexibility and choice to your benefits offering. The good news is that this is now easy to achieve!

beyond traditional health benefits

Because the right program makes a difference

The phrase ‘recruit and retain’ gets tossed around a lot when it comes to discussing the purpose of a great benefits plan. To break it down, you want the right benefits to help keep your best people. Salary compensation is important too, but what your organization brings to the table that adds to the total compensation package could be enough of a difference-maker to keep your best staff over the long term. The same applies when you’re recruiting; recruiting is challenging, and more and more people are asking up front about benefits offerings.  

Benefits beyond a traditional health and dental plan

A shift we have seen is towards asking about non-traditional benefits (so beyond the typical health insurance/ dental plan). Potential hires are asking about things such as health spending accounts, wellness/lifestyle spending accounts, group savings plans or a virtual care/mental health support program (or all of this!). People want the details on paid parental leave and paid time off, which goes hand in hand with the focus on work-life balance, and organizational flexibility as a whole.
employee benefits life balance

We designed our pools with flexibility and customization in mind

 One of the key benefits of how we have structured our broker-managed pools is that they actually have the reverse effect of a typical pool; we are able to provide MORE flexibility, including a choice from multiple major carriers.

Because we are working with our insurance carrier partners in a unique way, we are not always subject to the typical constraints imposed by underwriters for small groups (limits on life insurance, limits on dental coverage for new groups, limits on paramedical amounts). Our partners consider you part of our overall block of business, rather than treating you as a stand-alone company. While you’ll always be able to see your own claims experience and dollars in and out of the plan, being viewed as part of the Immix ‘block’ behind the scenes provides you with more than just pricing advantages.

 

Benefit plans must be cost effective

Even a fully customized, flexible benefits plan can be cost effective. The pricing model we’ve created at Immix is ideal for achieving the balance between customization and the low admin fees associated with inclusion in a pricing pool. Because we are negotiating the overall admin costs with the insurance provider on behalf of a large number of businesses, we’re able to pass the savings along to you, and spend the time needed to get the plan right- rather than haggling over pricing with the insurer on a group-by-group basis.

 

Not all pools are created alike

We understand that when you hear the term ‘pool’ you may jump to the conclusion that your business will be forced to implement a standard plan design or choose from a few plan options. Or, that you won’t be able to see any of the claims experience for your group. While other benefit pool offerings do take this approach, this is simply not the case with the Immix Pools.

Customization does not need to be expensive or complicated. Offering benefits that meet the needs of your employees regardless of age, sex, health or other identifying criteria can be done, and on your budget.

That’s why our model is so effective; low administrative costs, total customization and transparency, and experienced advisors who can work with you in a dedicated way to get it right.

Please reach out to us to discuss how we can help with your program; we love to hear from you.

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O 604-688-5262 E lindsay@immixgroup.ca
W www.immixgroup.ca

Check to Ensure your Benefits Quote is Actually for a Comparable Plan

5 Key Areas to Check to Ensure your Benefits Quote is Actually for a Comparable Plan

Inflation is on everyone’s mind; wherever you look, prices are rising. Unfortunately, benefit plans are not exempt from this. When the cost of dentist visits, medical items and procedures goes up, the result is often higher claims. This can sometimes end up passed along to employers as a renewal rate increase. 

Many of you may be considering getting a quote on your benefits plan or may have already received quotes from alternative providers.  Before you make a decision on moving your program, there are a few key points to check to ensure your quote is not too good to be true.

Is it truly apples-to apples?

Consider this scenario: you’ve been presented with a quote for a benefits plan. You had asked for the quote to be apples-to-apples to your current plan. The good news is the price is significantly cheaper than what you’re paying, and supposedly, the plan designs are equal. But are they?

In our line of work, it’s not uncommon to come across what is positioned as a comparable plan, only to find there are many details that have resulted in the lower price. They can be glossed over in a plan summary, and when the time is not taken to examine every nuance to the coverage, it can leave owners- and their employees- disappointed. There is nothing worse than rolling out a new program only to hear from an employee that their prescription -which was always covered under the old plan- is now excluded.

As we have written about in the past, it’s very common to get discounted pricing from an insurer. In short, the carriers usually need to extend some level of reduced pricing in order to gain your business.

And certainly, there are opportunities for true savings on administration costs.  But discounts aside, and beyond the summary of the coverage, we have compiled a list of specific plan elements to check and compare. 

 

Top 5 things to Review if a Benefits Quote seems Too Good to be True

 

  1. Review the details of the Prescription Drug Plan:

What are the details of the drug plan? Is there a managed drug formulary, excluded drug categories or drug caps? Does the plan mandate generic substitution or not?

A drug formulary is simply a list of the drugs that are covered on the plan. Oftentimes, a drug formulary is designed to exclude certain medication categories (fertility drugs or oral contraceptives are typical examples), in order to cut costs. In some instances, a drug plan may even exclude specialty drugs, the expensive but often lifesaving/ lifestyle saving drugs. While it’s often positioned as a benefit to employers, this could leave your employees with major uncovered drug expenses.

It is important to understand the implications of the drug plan. Generally speaking, a drug plan is a key part of the extended healthcare and is intended be an insurance plan. A plan that covers antibiotics (roughly $10-15) but excludes drugs for MS or Chrohn’s disease ($10K+ per year) is not providing coverage against a financially significant, often unexpected expense. While it’s true that a more open drug plan could mean higher drug claims than under a more restricted, managed formulary, the program’s stop-loss max will typically work to limit the plans exposure to high-cost drugs.

How the program adjudicates brand name versus generic drugs should also be clearly known; it’s standard these days to have generic substitution on a program, but this can work differently depending on the carrier or how the plan is set up (for example, will the plan allow the doctor to indicate ‘no substitution’ and therefore cover the brand name version of a drug?). Differences in this area have cost implications.

Lastly, is the annual limit for prescription drugs ‘unlimited’ or is there a dollar limit? You may be okay with implementing a capped drug plan, but again, you need to understand the details and implications. A qualified and experienced benefits advisor will be knowledgeable on all the above points, and most importantly, should be open and transparent about what you are getting.

Reviewing the health benefits plan
  1. Check the Dollar Maximums and Limits for Key Items:

You may have checked in the plan summary that the coinsurance is the same; 80% on certain lines of coverage, 100% on others. But what are the per item or category maximums?

 

The following are the most common items where benefit maximums may be listed, in the fine print:

      • per visit limit for paramedical services, such as $10 or $25 per visit reimbursement, rather than up to the practitioners reasonable and customary limits (i.e. $100 for massage visit)
      • annual per person dental limits in dollars; is this per level of coverage, or combined?
      • dental procedure limits such as scaling units
      • dental recall limits; is it the standard 6 months or has it been pushed to 9 months or even 12?   
      • eye exam limits; is it set to “reasonable & customary” meaning it will adjust with inflation, or is it a set amount? Is the amount reasonable given the cost in your area?
      • Orthotics, surgical stockings and other medical items
      • and as mentioned, is there an annual drug maximum, vs an ‘unlimited’ drug plan

 

While item reimbursement limits are standard practice, they do vary by carrier and many can be customized in a quote. It is important to understand how this may compare to your current plan, and whether the limits are reasonable, given the overall cost of the item, and the intent of your program.

 

 

  1. Check the Contract Wording and Coverage Details of the Disability Insurance

 

We say it all the time: long term disability coverage is the most important but often the most overlooked part of a benefits plan. This is an area to pay close attention to; in the event of a claim, how the claim is handled depends on the contract that is in place which could greatly impact the plan member, potentially for decades. Things to watch for:

      • What is the definition of disability, in words? How does this compare to your current plan?
      • Are commissions, bonuses and overtime pay or T5 earnings properly addressed? If the contract covers salary only, and this is a small percentage of total compensation for certain people, that could leave them grossly underinsured.
      • Cost of Living Adjustment; is there a COLA clause, or an inflationary adjustment included for the benefits payments? Is this important to you?
      • Is the program set up as taxable or non-taxable (is the employer or the employee paying the premiums?)
      • Is the duration of disability benefits to age 65? While this is the norm, we are seeing a trend towards a 5 or even 2 year benefit duration, to reduce costs. If someone goes on disability, they could be disabled for the duration of their life; an insurance plan that only pays them for a few years may not meet your requirements as an employer.

 

There is no bigger waste of money and potential liability than a disability plan that fails to cover people adequately and accurately; reviewing this area with an expert is crucial.

Reviewing details of a health benefits quote
  1. Check the Termination Ages: How long can people remain on various parts of the plan?

Different benefit lines typically have age-based termination or reduction schedules. For example, many life insurance benefits reduce the coverage by 50% at age 65, and then terminate completely at age 70 or 75. For health and dental, coverage is often in place right to age 75 or even ‘retirement’, meaning there is no actual termination age so long as someone is still actively at work.

We have noticed a trend towards lowering termination age and have seen coverage ending at 65 or even 60! For many employers, this is a big deal and it’s often not highlighted in a summary of benefits as a deviation. It is a good idea to additionally check the travel coverage and ensure this part of the extended health care is retained in alignment with the EHC, if possible.      

  1. Review the Mechanics of the Pricing:

Many people fail to review how the quoted premiums compare to the historical claims, or to do a basic ‘reality check’ on a too-good-to-be-true quote. On a typical experience-rated program, the premiums must be adequate to pay the claims, with the other pricing factors such as inflation, IBNR and target loss ratio taken into account.

Some questions to ask are: What is the actual discount that the carrier is investing? What is the duration of the rate guarantee?  What will be the process (financially speaking) when the plan is renewed? What is the Target Loss Ratio? If the plan is to be part of a pool, how does it work? Many times, you can find this out and often the carrier will be transparent as to how they plan to recoup any losses. A qualified benefits advisor should be able to explain this in detail and understand exactly what the renewal process will look like with a specific provider.  

 

Some plan design differences may be acceptable to you

There are always going to be nuances to carriers that are unique to them, and where they simply won’t directly align with your existing plan. Sometimes this means a slight improvement, and sometimes this could be perceived as a takeaway. At the end of the day, what’s important is that you understand the small deviations and that you are not buying something under misleading or mistaken circumstances.

An experience and qualified benefits advisor will do a detailed analysis

With the help of an experienced benefits advisor who knows the terminology and nuances to a quote and contract, the details can be understood. You may review any differences and be totally fine with the program not providing the same level of coverage. The key is to be aware, understand any implications, make an informed decision, and communicate any changes to your staff.

At the Immix Group, our benefits experts can help you obtain a quote, understand the quote and what it means for the future, and manage not only the onboarding of your new program, but the ongoing plan management. 

As always, feel free to reach out to us. We love to hear from you!  

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O 604-688-5262 E lindsay@immixgroup.ca
W www.immixgroup.ca

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Business Owners: How to pivot your employee benefits to adapt to the changing landscape of employee needs

By Howard Cheung, Account Executive, Immix Group: An Employee Benefits Company

 

The year 2020 has certainly been a year of change. All aspects of life have adapted to a new normal, and this includes businesses and what it means to provide valuable benefits to employees. As business owners and managers of employee benefits, what can you do to continue providing high-value benefits to your employees, while maintaining your budget?

 

Traditional insured plans are simple, and the chosen structure for most SMEs

The majority of SMEs (5-99 employees) in Canada historically have traditional insured employee benefits programs. It’s quite simple; you pay premiums to an insurance company, and in turn, they cover employees for a set schedule of benefits. Premiums are adjusted annually, partly based on the spending patterns of the employees, relative to the premiums you have paid.

 

Studies show employers and employees both want flexibility

However, based on the latest 2020 Sanofi survey results, what many employees are missing in having only this type of benefit is flexibility and choice, something that caters to them as individuals. The overwhelming response from both employers/ plan sponsors and employees is the desire for some level of “Flex Plan.”

health spending accounts
health sponsors with a flex plan

 

The perfect addition to your insured program

Health care spending accounts or health spending accounts (aka HSAs) are the perfect solution to the desire for flexibility in a benefits offering.

 

A Health Spending Account works as follows:

 

Health Spending Accounts can cover both non-taxable and taxable items

HSAs are used to reimburse plan members for a very broad set of health and dental related purchases (eligible expenses are matched to the CRA list of eligible expenses, in a tax-free HSA). This list is far more expansive than what is typically covered under a regular insured benefits plan. Given a set dollar amount for the year, members choose when and how to use their allocation, depending on their own personal needs.

For programs that also allow for non-CRA eligible expenses (typically considered ‘Wellness’ expenses), items such as vitamins, gym memberships, fitness equipment, alternative practitioners and even childcare can be claimed. These items create a taxable benefit for the employee.

From the employer’s perspective, the key difference from traditional insured benefits is full control as to how much you want to spend. HSAs offers stability and flexibility, with no surprises. Probably the most under-utilized CRA- approved benefits offering, HSAs are cost effective and simple.

 

However, health spending accounts are not intended to replace insured benefits

Are HSAs the ultimate solution for benefits? No. HSAs provides flexibility and choice for a certain segment of expenses. Ultimately, there is very little or no insurance component which means members are not protected from long-term, significant health costs.

When it comes to long term protection such as for expenses associated with severe illnesses or catastrophic events, your health and dental benefits need an insurance component, where high expenses can be covered, without a dollar limit. This is where the traditional benefits serve as your foundational base. For example, a costly dental accident, a travel mishap or the diagnosis of a serious illness requiring lifelong medication; these all require traditional ‘insurance.’

As well, other coverages such as long term disability, life insurance or programs such as group savings plans, employee assistance plans or wellness and workplace culture programs are all valuable parts of a comprehensive benefits package, typically under an insured structure.

 

The role of a Health Spending Account

Health Spending Accounts are the perfect complement to your insured program and can often be carefully designed to replace certain items within an insured plan. HSAs are certainly a solution that is often overlooked, but that can provide a highly valued benefit that sets your company one level above the competition. Best of all? You control the cost.

ImmixGroup provides innovative customized benefits solutions. Feel free to reach out to me howard@immixgroup.ca if you would like to see how we can set your benefits apart from the competition!

 

https://www.hmabenefits.ca/blog/health-spending-account-versus-group-benefits-plan

https://www.benefitscanada.com/news/sounding-board-ground-is-shifting-benefits-plans-must-focus-on-individuals-147983

https://www.sanofi.ca/-/media/Project/One-Sanofi-Web/Websites/North-America/Sanofi-CA/Home/en/Products-and-Resources/sanofi-canada-health-survey/sanofi-canada-healthcare-survey-2020-EN.pdf?la=en&hash=F1C763AA6B2F32C0BF2E623851FD05FD

Howard 2

New Year, New Benefits?

A fresh year — and a refresh opportunity

For more information, please feel welcome to contact me: lindsay@immixgroup.ca

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O 604-688-5262 E lindsay@immixgroup.ca
W www.immixgroup.ca

Employee benefits for start-ups: the long-term vs. short-term outlook

Once they grow above three employees, many small businesses start thinking about getting a benefits program. After all, benefits are a key attraction in hiring the best talent.

From a human resources perspective, small businesses scaling up should make sure the benefits package they settle on is competitive. Contrary to popular belief, it’s not enough to shop around for providers that offer the best rates. Let’s look at the factors to be aware of — and if they align with your business philosophy.

A lot depends on whether you’re in it for the long or short term. Pose this specific question to potential providers: “How do benefit premiums work and what are they going to cost in a five-year timeframe?” Be aware that insurance providers can offer seemingly discounted rates to lure you in initially — then, a year or two later, significantly bump up those rates. Now, if your initial budget is tight and you know that your rates will go up by double digits annually, then that’s fine. But this eventual bump in rates should be made transparent to you from the get-go.

 

Other options

Then there’s the opposite scenario: A provider advises you to sign on for higher-than-average rates for your group. The reasoning is that, with higher rates, the provider will have more room to play with should you run into a high-claims situation. So, do you want low rates with higher risk or higher rates with lower risk?

Or, you could opt for the right optimal rates. But what determines an optimal rate? To get a better idea, you have to understand how premiums are derived. Ultimately, premium rates are based on a combination of factors:

  •      claims paid vs. premiums paid (a.k.a. experience)
  •      trend factors
  •      pooled vs. non-pooled benefits
  •      profit margin/admin cost/commissions (a.k.a. target loss ratio).

We won’t go into exact technical explanations, but it’s important that you are aware of the above. In our consultations and renewal reviews, we delve deeper into each factor and explain how it is intertwined with your premiums. Interestingly, most people are aware of the first three factors; few know about the fourth one. Many clients have found it eye-opening to understand how brokers and insurance companies get paid. Understanding all this, we are often able to optimize costs in the long term.

In short, if you have a long-term outlook, don’t just focus on the surface rates of quotes and benefits. Rather, think about the underlying factors that will affect your company’s experience and rates in the long term. Consider doing an audit on your benefits with the above perspectives in mind.

ImmixGroup are group benefits specialists who provide transparent consultation and optimization of benefits for businesses.

Howard 2

HR managers: Here are three useful tips to help you efficiently manage employee benefits

Employee benefits are an integral part of both the employee-value proposition and the overall working experience. As an HR manager, you might well ask, “Just how deeply should I be involved in employee benefits?”

Let’s be frank. The discipline of employee benefits can be overwhelmingly complex. It takes in administrative processing, financial analysis, reconciliation and compliance. And, given that the cost of benefits is huge, you may even be responsible for negotiation and auditing.

To help you efficiently manage employee benefits, here are three tips:

Use and take advantage of online technology

Check with your broker to set up your group plan with:

  •  a plan administrator’s online platform
  •  members’ online platform
  •  a mobile app for members.

At a minimum, most insurers have an online administration platform to do a majority of traditional tasks: enrolment/termination/changes for members; viewing invoices; viewing coverage; etc. As for implementation of benefits, don’t sift through hundreds of paper applications. Instead, ask your broker if they can support electronic enrolment of members.

Encourage employees to use the members’ online platform to check coverage balance, replace lost cards and use best practices for travel/special claims. As well, more and more insurers have mobile app support. This allows easy, at-their-fingertips access to all of their benefit details. The more self-servicing resources provided to members, the less manual work falls to the HR department.

 

Implement an employee assistance program (EAP)

A key role of HR is to support employees in cases of workplace crises stemming from a variety of factors: mental illness, personal issues, financial stress, substance abuse, etc. All these can lead to performance issues and absenteeism. As well, they put a lot of stress and burden on the HR department.

Fortunately, a strong EAP is a powerful partner for HR and can help address all of the above with minimal disruption to business.An EAP is designed to assist employees in resolving the above issues via: counsellors over the phone or online; referral services; and wellness resources. Many EAPs also offer coaching and assistance to managers and HR in dealing with employee issues, such as workplace conflicts.

The key benefit of such a program is that it is anonymous and confidential, with expert resources for employees. Often political and privacy factors are at play that prevent employees from seeking help through their employer. As issues continue to linger, performance and ultimately the efficiency of the business will be adversely affected. All businesses, small or large, should consider taking advantage of a strong EAP as a cost-effective solution in alleviating workplace crises.

 

Work with a dedicated benefits broker

Benefits can involve many layers of management. It is a good idea to work with an employee benefits brokerage that has a dedicated team for servicing and consultation. This means not using the insurance company or an independent financial advisor without an in-house team. By contrast, a dedicated benefits service team can help coordinate and negotiate claims that could otherwise be declined by the insurer.

A specialized benefits broker can provide better insights; they have a wider range of tools and better pooling arrangements with insurers. These advantages lead to optimizing the cost of your employee benefits program. This is especially important at renewal time, when a benefits broker can make sense out of your multi-page renewal report and guide you through the nuances of benefits analysis.

At Immix Group, we believe implementing the above three tips will significantly optimize the administration of benefits in HR. As employee benefits specialists, we work closely with HR so that we are the ones doing the brunt of the heavy lifting in:

  •  market surveying
  •  benchmarking
  •  financial analysis
  •  negotiation with insurers
  •  securing pooling arrangements
  •  auditing.

When benefits are efficiently managed, both you as the HR manager and your workforce are better able to focus on running your business.

Further reading

Howard 2

Employee benefits renewal is simpler than you think – here’s the key

You may be an accountant, or work in human resources. Or perhaps you are a cost controller, chief financial officer or small-business owner. In any of these roles, you face the same daunting challenge every year: At employee-benefits-renewal time, how best to deal with rate adjustments while keeping costs under control?

Renewal reports can be mind-bogglingly complicated. They don’t have to be. Yes, you have a great deal of data to consider in understanding your group’s claim usage. But there’s a key factor that defines your renewal adjustment.

This factor has to do with:
1.) target loss ratio, or TLR, and
2.) two formulas that will help you understand where your renewal should stand.

TLR, sometimes also called a break-even ratio, is a percentage that indicates the expense level of the insurance carrier. This expense level directly affects how much your group can claim before the insurance carrier loses money.

For example, let’s assume your TLR is 80%. First we need to calculate the loss ratio, which is claims paid/premiums paid. In this case, let’s assume claims paid were $90 and premiums paid were $100:

  • loss ratio = total claims paid/total premium paid
  • estimated adjustment = loss ratio/target loss ratio.

This would yield a 90% loss ratio. Then, to find the estimated adjustment, you would divide the loss ratio of 90%/the TLR of 80%, which would yield +12.5%.

There is a lot more that goes into calculating a renewal, especially when it comes to larger groups. For illustration purposes, we didn’t take into account a few other factors, such as trend (inflation) and reserves (claims lag). But the above, in a nutshell, is essentially how renewals are calculated. It’s a quick and easy way for a plan administrator to do the math to see where their group should stand.

 

How is the TLR determined?

You might ask: How is the TLR determined? Usually, it’s determined at the time of inception and illustrated on the initial quote. Included in the TLR calculation are the insurance company’s costs in handling servicing and claims adjudication, as well as any commission paid to the broker. As the group size grows, typically the TLR will increase and the administration cost will be lower relative to the amount of premium the insurance carrier is receiving.

So, the lower the TLR, the greater the portion of your premium going into expenses and administration and commissions.

You want to ensure that your TLR is updated accordingly and is negotiated to be as high as possible. And you can do this by working with specialized employee benefits brokers that have preferred pooling arrangements.

If you would like to have an in-depth discussion about understanding your renewals, please feel welcome to contact me with any questions.

Howard 2

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