How many people do you know who don't think they have to pay out of pocket for hearing aids or home care hospital stays? Perhaps more than you can imagine as
according to a 2014 Canadian Health Index, 89% of Canadians believe they are fully covered for all costs associated with hospital stays and psychiatric treatment.
In addition, 4 out of 5 Canadians don't expect to pay out of pocket for nursing home/long-term care resident, hearing aids, and home care. Confusion exists because there is complementary coverage provided by both government and employer health plans, yet some common necessary medical services are not fully covered.
To help address the confusion, a series of healthcare guides organized by province and address coverage options and personal costs were developed. These guides include information pertaining to Disability, Home Care, Long Term Care, Palliative Care, Prescription Drugs, and Travel Emergency Medical.
A 2014 study prepared by Fraser Institute found that because Canadians may not be billed directly for medical services, they do pay for some of it via Canada's tax system. This scenario also creates a dampened awareness and appreciation for the true costs born by Canadians because there is no dedicated health insurance tax.
The Fraser report revealed that in 2014, a typical Canadian family with two parents and two children paid to $11,786 for public health care in insurance. The cost related directly to the size of the family. The report also showed that in the last decade, public health care insurance for the average Canadian family has increased 53% and 1.5 times faster than average income (34.7%) and more than three times as fast as the cost of food (15.6%).
The more employers have a sense for what employees believe about government sponsored benefits coverage, the more they can do to help educate them and build a stronger appreciation for employer-funded benefits coverage and the need for savings in light of many of the perhaps unexpected out of pocket public health care costs.
Communication strategies are an integral part of benefits and savings awareness campaigns. In many cases, it is the ability to surface misunderstandings about coverage and costs that pack a significant punch and provide the motivation to change employee behaviour. There are many reports such as the Sun Life Health Index and the Fraser Institute Study that we review, summarize, and bring to our clients attention. For additional information or support for your benefits communication campaign, we invite you to contact us. We're here to help so that you can focus on what you do best.
As employers continue to look for ways to engage their employees, it seems to be a never ending quest to ensure their plan members have the information needed to make the best possible decisions. Yet all too often, there is an assumption that employees will read the information they are provided and then make sound, rational decisions.
Based on years of experience, client feedback and behavioural economics research, we've learned that employees who make suboptimal decisions negatively affect the quality of their health as well as their financial future. We also know that their decisions in life affect their group benefits plan.
There are many articles on the web and in benefits and pension publications referencing statistics that employees aren't saving enough for retirement. One such example related to data from the 2011 Retirement Confidence Survey, which finds that almost one-third of employees have no savings set aside for retirement, and over 50 percent have saved less than $25,000. What is to be done? What level of accountability is placed on the employer when plan members make poor decisions about their retirement savings?
According to a DCIIA 2011 Plan Sponsor Survey, no matter how much an employer endorses the fact that members should be saving at a rate of 10 percent of salary or higher, most employees fall drastically short of this goal and find themselves saving at a rate of 4 percent of their salary or lower. The result of their decisions finds employees working longer and delaying retirement out of need rather than want. Their choices affect the rest of the employees who may be waiting for a promotion into a job that has been bottlenecked by someone who wishes to retire, but can't afford to stop working. The result has long tail effects on employee engagement and workplace culture.
Similar scenarios and outcomes exist for employee decisions related to health benefits. In a world where we know the negative results caused by adopting poor eating habits, we see the number of people with Type 2 Diabetes continue to rise exponentially. In other instances, employees are inundated with information from their employer about the importance of preventive health care, yet many employees fail to get regular check-ups and free screening tests offered right at their place of work.
With these observations and statistics in mind, it is worth considering the fact that employees - even though well armed with important and helpful information - don't always use rational judgement when making decisions about health and finances. For employers looking to revamp their communication plans, it is helpful to understand the behavioural tendencies of their workforce in terms of the outcomes they've experienced to date.
Here are a few tips to consider when designing communications for employees:
Benefits communications that dive down a path highlighting the negative outcome of employee choices generate emotional responses that deter the reader from accepting the recommendations. In benefits communications, negative framing results in employees who put up walls to the message. They become defensive and their negative behavioural tendencies continue.
With so much being communicated to employees, it helps to ensure your messages are positively framed, easy to read and with key steps for healthy outcomes clearly and simply stated. Using communication vehicles that employees readily access is also key. Depending on the demographics, and other important variables, incorporating social media can be a helpful way to help employees make well informed decisions that positively affect them and the health of their benefits plan.
For more information about this topic, please contact us. We're here to help so that you can focus on what you do best.
From time to time, I hear this question from clients, "I've got an expectant mom who wants to cancel her LTD coverage while she's on maternity leave. What should I tell her?"
It is understandable as to why this question surfaces. A plan member who is an expectant mother may feel that she can save money during a time when funds might be a bit short. I offer that during a maternity leave isn't a good time to stop a plan member's LTD coverage. No one can predict the future and unforeseen events could result in negative consequences that have a long term negative impact for the plan member. It is about managing risk and protecting yourself when you might need the coverage most.
Here are key tips to consider when a plan member asks if she should stop her coverage during a maternity leave:
There is so much for an expectant mother to consider when she prepares to have a baby. Worrying about disability coverage and the repercussions of cancelling it shouldn't be one of them.
*pre-existing condition definition "a medical condition that occurred before a program of health benefits went into effect."
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.