We are living and working in fast times. With the technological revolution, it is no surprise that we often hear clients say that they just don’t have time to manage their benefits the way they would like to. Yet consider that group benefits cost an employer, on average, $3,500 per employee per year. With inflation this number is fast approaching $4,000 per employee per year, so maybe the question should be: How much are benefits affecting your bottom line?
The real issue is how to find the time. This is where a trusted advisor can assist your organization. Someone who understands the group insurance business from the insurance carrier side, inside and out, and who can do the leg work that is required to ensure your plan is well designed, managed and negotiated, is key. Find a broker who will spend the time to analyze your group plan and understand your corporate culture and who is willing to invest the time needed to create the best group benefit solution for you and your employees.
A seasoned group insurance advisor should understand how the insurance carrier/ industry and benefits work and be able to educate you and your employees by simplifying the information in written form, in person or via a multi-media format. We call this cutting through the benefit noise. Understanding group insurance doesn’t have to be complicated as long as a broker you trust is advocating for you and keeping watch over your numerous priorities in order to protect the interests of your organization.
If you’d like to learn more about what we do for our clients and the creative ideas we implement to protect their plans, please contact Steve Marsh at email@example.com or 905-777-9990, ext. 200.
There is so much updated information to share about cannabis. With this in mind, the following is a short summary of the most important things you need to know.
In most organizations, human resource professionals are adding cannabis to their policies and procedures. It falls in line with other procedures already established under substance abuse. For the most part, pundits suggest little will change in recreational cannabis usage after legalization, but only time will tell.
Understanding more about cannabis is important to developing your policy. Cannabis has more than 85 molecules or active ingredients, but the two most popular and talked about are THC and CBD. THC (tetrahydrocannabinol) is the molecule within cannabis that provides the hallucinogenic properties or what is referred to as the high. CBD (cannabidiol) does not contain hallucinogenic properties, which is why someone can medically be using cannabis and still be fit to drive.
Cannabis does not yet have a Drug Identification Number (DIN) or Natural Product Number (NPN). As a result, it is not regularly included under a carrier’s formulary group drug plan. A few carriers have added a cannabis benefit that will allow an employer to add cannabis to their healthcare plan. To date those carriers are Sun Life, Green Shield and Manulife; Great West Life and GroupHEALTH have announced they will add this benefit in January 2019. A cannabis benefit could range between $1,500 and $6,000 per person, per year and requires a prescription to be eligible, but only for certain, specific medical conditions as defined by each carrier. By restricting this benefit to only certain medical conditions, the carrier is preventing the plan from reimbursing for recreational cannabis use.
For those employers who have a Healthcare Spending Account (HCSA), the Canada Revenue Agency does allow cannabis and cannabis seeds to be reimbursed as an eligible expense, when prescribed by a doctor.
With this new cannabis industry erupting, we will continue to see things evolving in this arena. For this reason, please note the above summary reflects information as at October 15, 2018. For more updates or advice on how to engineer your organization’s response to this upcoming change, please contact Steve Marsh at firstname.lastname@example.org or 905.777.9990, ext. 200.
Employers often hear about group insurance concepts that are not as familiar to them. This review is designed to assist in understanding a complex concept: ASO. Every group insurance plan is in the form of a contract. The most common contract for health and dental benefits is an insured group contract. Another option is an ASO (Administrative Services Only) contract. What does an ASO contract mean? Exactly what it states: this type of group contract includes only the administrative services of the insurance carrier to adjudicate claims. An ASO, therefore, has no insurance element included for health and dental benefits. There are times when an ASO makes perfect sense, but there are also times when employers should avoid this type of contract. To assist employers in finding the right group insurance contract to fit their goals and needs, we have outlined the main pros and cons of an ASO.
Cost: Under an ASO contract, the cost the carrier charges for running the plan can be lower by a few percentage points. This cost is often referred to as the Breakeven (BE) or Target Loss Ratio (TLR).
Surpluses: Under an ASO arrangement, there can be surpluses paid back to the employer if the premiums paid are not fully consumed by the ASO charge for adjudicating the claims and the actual costs of the claims. Surpluses can develop and grow over time if the plan is properly funded.
Flexibility: There can be more flexibility with an ASO contract to pay claims that are not technically eligible under the normal terms of an insured health and dental contract. This occurs because the carrier has no risk in making exceptions to an ASO contract since the employer pays 100 of the cost.
Reserve flexibility: Some ASO contracts will exclude reserve requirements. Traditional insured plans establish a reserve or slush fund to pay for the late claims, referred to as run-off, that will be received by the carrier after the employer termination date of the contract. Under most ASO contracts, a reserve is not required. For this reason, an ASO contract can reduce costs when compared to an insured contract. Note that some carriers can offer special arrangements allowing an insured contract to include this same advantage.
Deficits: When claims are higher than the premiums that have been paid into an ASO contract, a deficit will occur. The insurance carrier will require this deficit to be paid immediately. When there is no surplus in an ASO, it can be alarming to employers, especially if they haven’t clearly understood this risk. It is for this reason that historically only larger employers were considered for ASO contracts. But today, many advisors prospecting clients will use an ASO approach to attack the cost of an insured group plan, without addressing the possibility of having to pay back a deficit on demand. This is a critical reality as there is no negotiating the claims cost of an ASO contract.
Cost Fluctuations: Under an ASO contract, there is no negotiating with a carrier to spread the cost impact over a longer period of time. In an ASO, the claims costs equal the premium−no discussion.
Plan maximums: Critical to a successful ASO contract is either a spread of risk (through the volume of a larger number of employees) and/or plan design features that control costs. For this reason, implementing maximums and caps on benefits is essential to protecting against the growing issue of rising claims costs. This doesn’t always suit employer visions for their benefits plan, but it is a critical component to ensuring long-term success under an ASO contract.
Carrier focus: Given that the carrier is responsible only for the paying of claims, there can be less concern for the trends and mechanics of a plan, as the carrier does not share in the financial outcomes. Employers will be required to become more engaged and scrutinizing to ensure their interests are served, to ensure a plan runs well from all aspects.
Pooling charges: Pooling is a type of claims cost-share between the employer and the carrier and is incorporated into almost all plans today. It is designed to share the risk of higher cost claims. Under all plans, it is either included in the healthcare rates or separately priced as its own benefit, depending on the carrier. Each carrier has a different pooling threshold. Some carriers offer pooling protection beginning at claims totalling $10,000 per person per year, while others have increased their threshold for pooling claims to $15,000 per person per year. The higher the pooling threshold number, the more financial exposure an employer has. The number of claims being pooled today is increasing exponentially due to the rising cost of drugs. This trend has resulted in significant increases in all pooling arrangements with all carriers. However, the ASO pooling charge is the most expensive given the carrier must bear the full brunt of the pooling claims exposure alone, as ASO contracts do not qualify under the industry pooling EP3 arrangement (the industry pool where all carriers participate); other insured plans do qualify. Consequently, ASO pooling charges are higher and are seeing even more substantial increases than traditional insured plans.
For more information on the above, or to get answers to any questions you may have regarding ASOs, please contact Rosemary Marsh, Managing Partner, Business Insurance Services, email@example.com, or contact any BIS team member at www.bisinc.ca.
Ontario has made changes effective October 29, 2014, to the Employment Standards Amendment Act (ESA), through the addition of three new “leaves of absence” which have been designed to help families. There are a number of important items that as an employer you will want to be familiar with. For example, the Family Caregiver Leave has no requirement for the length of time an employee must be employed, while the Critically Ill Child Care Leave and Crime-Related Child Death or Disappearance Leave require an employee to be employed for 6 consecutive months to be eligible for these leaves. More details on these job-protected leaves are as follows.
Family Caregiver Leave
Up to eight weeks of unpaid, job-protected leave for employees to provide care or support to a family member with a serious medical condition. Family Caregiver Leave may be taken to provide care or support to certain family members for whom a qualified health practitioner has issued a certificate stating that he or she has a serious medical condition.
Family Medical Leave is another job-protected leave available under the Employment Standards Act, 2000 (ESA) for employees with certain relatives who have a serious medical condition. One of the main differences between Family Caregiver Leave and Family Medical Leave is that an employee is only eligible for the latter if the family member who has a serious medical condition has a significant risk of death occurring within a period of 26 weeks.
All employees, whether full-time, part-time, permanent, or term contract, who are covered by the Employment Standards Act, may be entitled to Family Caregiver Leave.
There is no requirement that an employee be employed for a particular length of time, or that the employer employ a specific number of employees for the employee to qualify for Family Caregiver Leave.
Care or support includes, but is not limited to,: providing psychological or emotional support,; arranging for care by a third-party provider,; or directly providing or participating in the care of the family member.
The specified family members for whom a Family Caregiver Leave may be taken are:
• the employee’s spouse (including same-sex spouse)
• a parent, step-parent or foster parent of the employee or the employee’s spouse
• a child, step-child or foster child of the employee or the employee’s spouse
• a grandparent or step-grandparent of the employee or the employee’s spouse
• a grandchild or step-grandchild of the employee or the employee’s spouse
• a spouse of a child of the employee
• a brother or sister of the employee
• a relative of the employee who is dependent on the employee for care or assistance.
The specified family members do not have to live in Ontario for the employee to be eligible for Family Caregiver Leave.
Critically Ill Child Care Leave
Up to 37 weeks of unpaid, job-protected leave to provide care to a critically ill child.
Critically Ill Child Care Leave may be taken to provide care or support to a critically ill child of the employee for whom a qualified health practitioner has issued a certificate stating:
1. that the child is a critically ill child who requires the care or support of one or more parents, and
2. sets out the period during which the child requires the care or support.
A “child” means a child, step-child, foster child or child who is under legal guardianship, and who is under 18 years of age.
A “critically ill child” means a child whose baseline state of health has significantly changed and whose life is at risk as a result of an illness or injury. It does not include chronic conditions.
All employees who have been employed by their employer for at least six consecutive months and who are covered by the Employment Standards Act, 2000 (ESA) may be entitled to Critically Ill Child Care Leave, whether they are full-time, part-time, permanent or term contract.
Crime-Related Child Death or Disappearance Leave
Unpaid, job-protected leave for parents whose child is missing or has died as a result of a crime.
Employees who have been employed by their employer for at least six consecutive months and who are covered by the Employment Standards Act, 2000 (ESA) are entitled to Crime-Related Child Death or Disappearance Leave if it is probable, considering the circumstances, that a child of the employee died or disappeared as a result of a crime.
An employee is not entitled to this leave if the employee is charged with the crime or if it is probable, considering the circumstances, that the child was a party to the crime.
“Child” means a child, step-child or foster child who is under 18 years of age.
Generally speaking, crime means an offence under the Criminal Code of Canada.
This information has been sourced from the Ontario Ministry of Labour website at http://www.labour.gov.on.ca/english/es/pubs/guide/caregiver.php
It is estimated that 1 in 5 people will experience mental health problems in any given year. The remaining 4 will have a friend, family member or colleague who will be challenged with mental health issues. In Canada, There are 500,000 Canadians absent from work every day. Mental Health is the number one cause of disability in Canada, accounting for nearly 30 of disability claims and 70 of total claims. Approximately 20 of people with a mental disorder have a co-occurring substance use problem. The estimated cost to the Canadian economy in terms of health care and lost productivity is $51 billion or $34 billion is the cost to the Ontario economy. According to the World Health Organization, depression will be the single biggest medical burden on health by 2020.
In spite of the numbers affected, there is still a stigma associated to mental health. Only 50 of Canadians would tell friends or coworkers that they have a family member with a mental illness, compared to 72 who would discuss a diagnoses of cancer.
Employers can assist by training their front line managers to recognize mental health issues and offer solutions for building a mentally healthy workplace culture, such as providing an Employee Assistance Program (EAP) which offers a large array of tools, information and support. This kind of benefit can educate and arm your managers on how to be more effective in addressing those situations and help to reduce the stigma surrounding mental illness.
Employers should check their Employee Benefits provider websites as many insurance companies provide online information on their websites, as well as offer materials and webinars available for managers. Should you have difficulty locating resources, contact BIS for assistance.
Biologic drugs have been available in Canada and elsewhere since the 1970’s and are used to treat a wide variety of diseases, including cancer, rheumatoid arthritis, multiple sclerosis and diabetes. Health Canada defines a biologic as a product manufactured from animals or micro-organisms through the metabolic processes of the organisms themselves. They are inherently more complex than chemically synthesized pharmaceuticals and are much more difficult to produce. Examples of biologics include insulin, vaccines, blood components, protein hormones and gene therapy products.
Biologic drugs currently comprise between 14 – 16 percent of the Canadian pharmaceutical market and cost the Canadian health care system more than $3 billion annually. However, despite their effectiveness, the extraordinarily high cost of biologics has been a barrier to increased use. For example, it can cost $30,000 annually to administer Remicade to a patient suffering from ulcerative colitis, or $17,000 each year to treat one patient with rheumatoid arthritis who is prescribed Enbrel.
Regulatory agencies in Canada, the United States (US), the European Union (EU) and other developed countries have attempted to address the cost issue by allowing generic pharmaceutical companies to produce their own versions of previously approved, or reference biologics. Due to the complexity of these products, and the difficulties in producing exact replicas of a reference biologic, most countries have adopted terms other than bio-generics to describe them. Health Canada, which unveiled its regulatory framework in March 2010, has chosen the term Subsequent Entry Biologic (SEB). This new regulatory framework creates an opportunity for subsequent entry biologics to become as significant a therapeutic option as the small-molecule generics have become. However, SEBs are not interchangeable with the current biologic drugs offered and we will not see significant savings generated, such as we witnessed when generic drugs were introduced into the
The above is an important trend to consider when considering plan design alternatives.
We are entering an interesting era in benefits with some group plan designs cemented in place through negotiated arrangements, and employers struggling to offer more for less. Few benefits address employees’ needs proactively, with the exception of a few. Most noteworthy is an Employee Assistance Program (EAP). Employee’s benefit with resources through a professional organization providing assistance when they need it, 24/7, in the way they choose to access it: online, telephone, or in person. The cost for such a program is small, especially when you consider the financial payback in fewer absence days and healthier employees. An Employee Assistance Program can be one of those few benefits that will give you back more than you will pay for it.
A new Hepatitis C treatment (Solvaldi), approved for use by Health Canada in December 2013, will have a significant impact on all insurance carriers and policyholder plans. This drug is reported to cure 90 of those suffering with Hepatitis C; an amazing medical breakthrough! But it comes at a cost to group plans with the expected cost for a minimum 12-week course treatment at $1,000 per pill, representing a total cost of $84,000. Having the right plan design, financial arrangement and advocate in place will be critical to how this evolution in medicine will impact your group plan.
When a plan enrolls with a new carrier, employees are required to complete a beneficiary designation on their insurance enrolment form. In doing so, they ensure their requests will be met in the event of a life insurance claim.
For this reason, it is important employees are aware of a few important requirements when completing any beneficiary designation.
The beneficiary designation must bear an original signature in permanent ink and must be dated.
The insured employee must initial any beneficiary designations that include a change or correction. Whiteout changes are not accepted.
The beneficiary must be a person who is of legal age (18 or over), or, if the beneficiary is a minor, the employee must appoint a trustee to act on the minor’s behalf until the beneficiary reaches legal age.
It is important to remind employees on an annual or bi-annual basis to update their beneficiary designation to ensure information on record is current.
Group Out of Country – Important Restrictions
It is important to note a few significant limitations regarding most out-of-country insurance group policies. They may differ by provider, but for the most part contain the following restrictions you should be aware of:
The number of days that you will be covered is typically limited per trip. For trips over 30 days, be sure to check with your provider.
Most carriers today will include a pre-existing conditions or stability clause to ensure only healthy people who are not expected to have a health emergency are provided the coverage. Should you have a health condition, contact your carrier to confirm your eligibility for out-of-country coverage.
Keep your travel information handy and be sure to let those travelling with you know where your documents are located. A great place is storing it with your passport.
Should an emergency arise, be sure someone calls your out-of-country provider within 48 hours to reap the full benefits of what is offered and to ensure the service provider will intervene. This information is in your booklet and on your wallet card. Failure to do so can result in payment delays to your healthcare providers.
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