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Integrated Health & Dental Benefit Plans

Canadian Employers Do Not Provide Health Benefits!

Posted by David Mitchell

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November 12, 2014 11:50 AM

Canadian-Employers-Do-Not-Provide-Health-BenefitsFunding health expenses is not the same as providing health benefits.

Unfortunately many people in the business of processing claims or selling insurance do not see the distinction. When large employers do an analysis of their "health" benefits spend and try to equate expenditures to health outcomes there is disappointment.

This should not be a surprise.

First, the metrics for measuring health outcomes are either non-existent or vague at best.

Secondly, even if metrics exist, base line data is usually not available.

Third, and the most important issue is that favourable outcomes to an organization have no bearing to what an individual employee perceives as good health.

Most employer "health" initiatives are cost containment strategies. They focus on averaging down the average cost of a claim. This metric usually has no bearing on improving the health of the employee.it is focused on maintaining the same level of health for a "sick" individual but at a less expensive cost.

While short term financial gains may be realized by focusing on the few individuals who meet the employer's definition of "sick", long terms gains to improving employee health will not result using the current "benefits" model.

Three important philosophical changes are required for employers to impact on their employee's health via the benefits program.

First is the admission that vast majority of employer funded benefits are financial benefits, not health benefits. Providing tax effective compensation to fund health care costs are important but they are not health interventions.

Ironically funding poor health may make it easier for employees to delay behaviour changes that will improve their health simply because the financial consequences of poor behaviour are absorbed by employers and not employees.

The second is that restricting financial assistance to health conditions defined by the employer as important is paternalistic and probably counter-productive. We know the 80% of the claims costs are incurred by less than 20% of the population. Does this suggest that 80% of the population is healthy and does not deserve employer support to improve their health?

The third is the industry's focus on supporting sick employees to be sick at a cheaper price. The industry needs to evolve to providing a benefit program that encourages all employees (both those currently suffering from a chronic condition and the majority of employees who are not claiming or absent from work) to maintain or improve their health before the consequences of poor habits decrease the quality of their lives.

The only real solution to prevent or treat chronic disease is to make sustainable lifestyle change. In fact, if we exercise more, eat better, don't smoke and drink moderately (or not at all) we can prevent;

  • 90% of type II diabetes,
  • 80% of cardiovascular disease,
  • 70% of stroke and colon cancer
  • 40% of other cancers.

If it's that simple, why are we not doing it? Well that's simple too - Change is hard!

Perhaps providing a corporate culture that supports healthy living is the closest employers will come to providing "health benefits".

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Topics: group health benefits, wellness

How to Find the Right Health Insurance Broker

Posted by David Mitchell

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November 10, 2014 10:47 AM

How-to-Find-the-Right-Health-Insurance-BrokerRising health care costs along with economic and political changes have altered the way benefits are delivered. Consequently, many employers are looking for cost-efficient yet innovative employee benefits solutions that focus on cost management without compromise employees’ health and lifestyle choices.

This requires the help of healthcare broker that can serve as a trusted consultant while delivering well thought out health management solutions, which not only enhance employees’ health and increase productivity, but also encourages responsibility and accountability.

Choosing the right health insurance broker is a critical key to achieving these objectives.

Must Offer Comprehensive Range of Products and Services

Your broker should be able to provide your organization a full complement of products and services. This includes integrated health benefits, which combines health spending accounts (HSAs), access to EAP services in comprehensive drug coverage. Broker should also use their expertise to help advisors and employers provide to their employees:

  • Wellness support - Branded incentives that promote healthier and happier  individuals
  • Tax Effective Saving Plans: RRSP/TFSA vehicles provide employees integrated administration that allows them to divert a portion of their company’s benefit funds to saving benefits.
  • Executive compensation: Allows organizations to integrate a tax effective supplemental compensation program with a traditional benefit plan. Employers can also use this as a transitional offering from where they are to where they

The right health insurance broker must have a primary interest to build a strong relationship with you, as well as offer cost-effective products that are relevant to your employees and business objectives.

Finding a Quality Broker to Obtain the Services

One of the best ways to find a quality health insurance broker is to ask business associates and other service providers for referrals. Find out if they have a broker that they would recommend to you—one that can effectively evaluate your needs and help you search for and choose the right products and services.

You gain an added level of confidence when you work with a broker who has been recommended by someone you know and trust.

You can also conduct your own due diligence to learn of the broker’s reputation in the industry. In the age of the Internet, it is fairly easy to conduct online research to learn what other business owners are saying about insurance brokers and their satisfaction level for any services rendered.

What You Should Expect From Your Broker

Your quality of the relationship forms the basis for them finding you the best health insurance solutions at the best possible rates. Many brokers operate in the same community as the client, which helps them to understand a client need. This encourages them to always operate in the clients’ best interests, which includes:

  • Represents your best interest and not the insurance company.
  • Possesses the  knowledge and resources to shop around to various insurance providers to find the best products
  • Ensure that you understand all of the available options and received the coverage you need.

From product selection to the claims process, your health insurance brokers should always advocate on the behalf of the client.

Once you complete the homework, you should have a good feel for the various candidates-- their reputation, product and services and compatibility with your organization. Now you are ready to make an informed decision.

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Topics: health insurance broker

5 Facts You Need to Know About Flexible Benefits

Posted by David Mitchell

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November 10, 2014 9:00 AM

5-Facts-You-Need-to-Know-About-Flexible-BenefitsMost companies provide their employees with traditional benefits plans. These traditional programs offer a limited range of coverage to a group of employees that has very diverse and varying health needs—which means that you can never really accommodate all of your employees. Everyone gets the same plan, which might not work for everybody.

But choosing a group benefit program can be challenging—you want to give your employees a competitive and comprehensive benefits package, but you do not want your costs to become difficult to manage while doing so. The answer to this age-old conundrum is enrolling in a flexible benefits plan. Here are five facts you should know about flexible benefits.

1. You will control costs.

As the employer, you will be able to set benefit limits each year, which will allow you to know the full cost of the program in advance. There will be no surprises at the end of the year. And each year, you will be able to adjust these limits, so you can tailor your plan to your financial needs on an annual basis.

2. This customized program is created through a health spending account (HSA).

This self-funding plan is simple to use. You set a pre-determined dollar value, provide the funds to the 3rd party administrator to be placed into a health spending account, and the provider then reimburses the employees for their dental and health expenses through that account. Employees can even carry over any leftover credits into the account or onto the next year of the plan.

3. Flexible benefits are tax deductible.

When you use a health spending account for your flexible benefits, the employees receive the benefits on a tax-free basis, and you are provided with a 100% business deduction. You and your employees will save money.

4. You will still provide valuable coverage to employees.

Employees can choose exactly where to spend their tax free money. In addition the plan can provide insurance for the high cost, low incidence claims like out of country emergency medical benefits or insurance for catastrophic drug expenses.

5. Employee happiness and awareness will increase.

Because employees are in the driver’s seat when it comes to picking and choosing options, they will feel in control of their own plans, and they will feel like they are covered for what they need, making them happier employees. What’s more, because they get to choose the options they actually need, you know that their health needs will be covered, so they will be healthier, too. Additionally, unlike with traditional plans, flexible benefits programs make employees responsible for their own health plans. This makes them more aware of the different types of benefits and coverage, so they become more responsible when choosing health services.

One-size-fits-all benefits programs cannot accommodate all of your employees’ health needs. Flexible benefits allow your company to provide tailored health coverage to employees without the high cost. Employees select the benefits they need, and leave the rest behind. You will have happy and healthy employees who have confidence in their health benefits plans, because they chose them.

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Topics: flexible benefits

Group Benefits: Why Pay Twice?

Posted by David Mitchell

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May 09, 2014 10:40 AM

The Ontario Government provides an excellent drug program for employees with significant drug costs. Fortunately this does not happen often...less than 2.6% of the working population has drug expenses over $3,500, but when a large claim arrives it can be substantial

.

share-of-claimants-by-annual-drug-cost-range-2011

Most employers purchase insurance for their staff in case of large claims. What they don’t realize is they are buying the same protection twice. Traditional plans are structured to prevent integration with the Trillium drug program…this results in higher premiums for the insurer. 

The following chart illustrates the advantages of having high cost claims for operational staff funded through the government program. 

In this comparison we have assumed the employee’s taxable income is $45,000 and they are paying 20% of the claim.

traditional-insured-defined-benefit-plan-vs-defined-contribution-plan-integrated-with-trillium

On a $13,000 claim you could save over $14,000! 

By encouraging integration you save money on the large claims every year. Most large claims tend to repeat themselves. Once an insurer knows you have a large repeating claim they know your alternatives are limited. This means that renewal rates on the drug program and on other group premiums, are not subject to the same level of marketplace competition…your other costs tend to rise too.

To learn more about how integrated plan design can prevent you from Paying Twice click here.

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