The 2016 Sanofi Canada Healthcare survey featured the responses and preferences of plan members across Canada. While prescription drugs remain top of the list in terms of usage and cost, paramedical services landed securely in second place. What has been surprising is the trend toward younger generations' looking to holistic alternative therapies and increasingly tapping into the use of paramedical services such as massage therapy.
Paramedical services are defined as "services provided by professionals who aren't covered by the public health system." Paramedical practitioners include: chiropractic, massage therapy, naturopathy, acupuncture and osteopathy.
For years now, cost control tactics for group insurance have rested squarely in the corner of prescription drugs. With costs containment strategies aimed at slowing the rapidity of drug spend, there hasn't been as much emphasis placed on what some may consider more low hanging fruit options for addressing unnecessary and expensive group plan extended health coverage.
The factors applying more pressure on this topic are affected by the behaviours of four primary stakeholders: the insurer, the plan sponsor, the plan member and the paramedical practitioner.
Insurers naturally look to support their clients in addressing areas where the biggest ticket spend categories punch their way forward as heavy weight champs. It requires experienced and highly specialized talent to navigate predictions for consumer spend, trends in the pharmaceutical industry and client tolerance thresholds. If plan sponsors don't raise the flag that there are other areas to focus on -- with as much diligence-- the emphasis may well remain fixed on pharma.
Plan sponsors benefit from creating or revisiting their benefits philosophy to avoid difficult decisions and conversations pertaining to what benefits are covered and why. In situations where companies feel the need to tighten their belts and are looking for any possible way to reduce costs, group benefits plan design may become an employee engagement danger zone if not handled strategically. One way to consider keeping the flexibility of paramedical services such as massage therapy involves Health Care Spending Accounts (HCSA). By including a cap on the amount allocated per plan member, budgets can be managed more consistently and with greater predictably.
Plan members value their benefits, but don't always connect the dots between usage and cost. Some hold the belief that since they have the paramedical benefit, they are entitled to using it whether or not there is an actual medical need. Helping plan members understand that increased usage drives the cost of providing the benefit is another actionable that both the insurer and the plan sponsor shouldn't lose sight of. Member education must always remain in vogue for employee benefits and incorporating trending communication methods, such as digital media, allows for creative ways to more accessibly reach this audience.
Paramedical practitioners have variations in their required training hours, code of ethics and accreditation associations. Their behaviours drive perception of professional standards and fraud in health benefits. Ensuring the need to operate with the highest ethical standards and requiring continued professional development and training hours will be invaluable in a constantly changed and increasingly complex working environment such as the spa industry where a predominance of paramedical practitioners such as massage therapists work.
While there are no quick fixes or simple solutions to the complexity of controlling costs, the need to remain focused on usage outside of prescription drug spend is real. If you're looking to more fully address these issues, I invite you to contact us. We have decades of experience and deep industry knowledge. Let us put that knowledge to work for you so that you can continue to focus on what you do best.
It isn't easy to please all employees with one benefits plan. Plan members are at various stages in their life and career. Some see great value in orthodontic coverage while others want more coverage for vision care.
With four generations in the workforce, an influx of costly biologic drugs and increasing economic pressures, plan sponsors don't have it easy. How could there be one plan design that fits all? There isn't a silver bullet to offer a quick solution, but there are options available with the introduction of a Health Care Spending Account (HCSA).
Basically a HCSA offers plan sponsors the ability to allocate a budgeted amount to each plan member. Plan sponsors know the allocation is limited and that it won't be exceed. For example, each plan member could be allocated $300.00 toward his or her HCSA. It is tax deductible and cost-effective. Employees can spend their allotted HCSA using pre-federal tax dollars on health-related products and services that are eligible to be claimed as per the Medical Expense Tax Credit (METC) under the Canadian Income Tax Act.
Once a plan sponsor selects a balance carry-forward or no-carry forward option, the next steps involve communicating how employees can use their HCSA. Introducing a HCSA as part of a traditional benefits plan is a helpful way to add flexibility to the changing needs of a diverse employee base. Plan sponsors have more control over their costs with the knowledge that claims experience doesn't impact the budget assigned to a plan member's HCSA amount.
These days it is increasingly more challenging to attract top talent. An HCSA brings flexibility and choice to employees. It helps a traditional plan become more attractive. For plan sponsors, it offers predictability and stability. If well communicated, HCSAs are simple to understand and use. They work like a bank account and plan members can use their HCSA to pay for health-related services and products that might not be covered in a traditional plan such as dental braces or prescription glasses. An HCSA can be used to pay for deductibles and benefit top ups.
For questions about ways to maximize the effectiveness of a benefits plan design, please contact us. We're here to help so you can focus on doing what you do best.
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.