With decades of group benefits experience, relationships across the sector, and as the leader of one of Canada’s most innovative group benefits risk teams, GroupHEALTH Senior Vice-President of Underwriting Gary Walters knows how to build benefit plans for the future (even the post-pandemic future). We sat down with him to get his thoughts on employee health benefits in the small business environment.
1. How can a small business benefit from an employee benefits plan, and how can they get maximum value from it?
In some ways, small businesses may feel at a disadvantage when trying to attract good talent. A well-designed benefits plan can help level the playing field. It’s a very tax-efficient form of compensation for businesses of any size.
There’s also the core business value of offering employees incentives and opportunities to get and stay healthy, which in turn helps businesses stay productive and grow. Often a small business can have a family atmosphere, and providing support to employees with, for example, a serious medical issue, is a good way to reinforce that. Without health insurance, that support can be expensive, even prohibitively so. But with an insured employee benefits plan, you pay a small amount to cover a (potentially) big loss.
I would encourage small business employers not to start with a “Ferrari” benefit plan, but to be aware that a subsequent upgrade is always possible. Start with something that allows you to check and adjust the “fit”, and then add benefits or adjust as you grow and change. It’s much harder on employees to remove benefits, so be prudent and sensible about your initial plan decisions.
A plan like GroupHEALTH’s Smart Plan is an excellent first step. It’s easily configurable and flexible. You get to experience a very competitive benefits plan without worrying about long-term affordability. And it allows you to upgrade, ensuring you get a benefits plan that fits like a well-cut outfit whatever size you grow to.
2. Should the government be involved and regulate employee benefits plan for each business across Canada?
The government is already involved through tax policy – they give companies tax advantages for providing employees with benefits. They also determine whether the provincial plan will pay before or after the private plan. In some provinces, like British Columbia, the government pays for many services once an employee hits the provincial deductible amount and the private plan covers the rest – the deductible and, at the employer’s choice, anything else that the government doesn’t pay. In Ontario, as an alternative, the employer’s plan pays for most services first and then in some cases, the government picks up some of what a private plan has not paid.
3. Should the government provide a drug plan for everybody through, for example, a National Pharmacare program?
Clearly, every Canadian deserves and should have, timely access to the drugs they need at a cost they can afford. However, National Pharmacare means different things to different people. A Single Payor National Pharmacare system, which is often indicated by “National Pharmacare”, seeks to completely replace the current mixed public-private approach. A wide range of studies show that 30 to 35 million Canadians are currently served very well by the existing system. So, why replace it? We should build on it. A one-size-fits-all single payor program, to be affordable, is likely to be significantly more restrictive than private plans.
The government undoubtedly plays a role in addressing the approximately 1 in 10 Canadians who are uninsured or under-insured and the much smaller number of Canadians who need expensive drugs for rare diseases.
- A national program should still encourage (through a mix of approaches such as tax incentives, out of pocket maximums, required coverages) employer-based plans with a fallback safety-net for those who remain uninsured or under-insured.
- A national pooling approach, similar to the current insurance industry pool, could provide coverage for rare disease drugs without unduly burdening any one payor (employer or government) due to an expensive drug (which can, in exceptional circumstances, exceed $1M per year and continue for many years).
Together with the government, we can build on the existing system – which currently serves 90% of Canadians well – to serve the needs of all Canadians.