Provinces across Canada are grappling with soaring COVID-19 cases. The restrictions put in place by health authorities can make it hard to operate a business. As the months of restrictions put a strain on business operations, some companies are at the breaking point. If that’s you and you’re looking to decrease costs, is cutting your employee benefit plan the right choice for your company?
The Right Solution
It’s important to recognize that every situation is different. The financial and operational challenges you are facing are unique to you. Options available to you and the amount of your financial reserves mean that the solution for you may be different than the solution for other businesses.
When it comes to employee benefits, what’s important is to understand your options, look at different scenarios and talk to your provider. Although difficult, you do have to look at the long term and know that this pandemic will end. Will cutting company employee benefits now have negative retention and recruitment implications in the long term?
Take a few minutes to remember the important reasons you sponsor an employee benefits plan in the first place. Some of those reasons may include:
- Supporting the physical health of employees
- Supporting the mental health of employees
- Retaining good employees
- Attracting new employees
- To gain tax deductible expenses
It’s easy to see that many of those reasons are still valid. So what options are available besides cutting your plan altogether?
Focus on Cost Containment
If your plan doesn’t already have built-in cost containment measures, this should definitely be the first step. At GroupHEALTH, we do our best to contain costs at the best of times (well before the COVID-19 pandemic), so we’re already well versed in cost containment.
- Smart Rx Solutions – Smart Rx is our suite of prescription drug products that focus on cost containment. This is a big one because prescription drug costs typically make up a very big portion of total benefit costs, including during a pandemic. Several of our Smart Rx products involve utilizing a central dispensing pharmacy (CDP). Central dispensing pharmacies deal in high volume. They have low overhead and they dispense medications from several central locations and then courier them to the patient’s home or office. At GroupHEALTH, we’re known for leveraging our pool of business to secure discounts and add-ons. We’ve successfully done this with our CDP partners. As a result, our Smart Rx products that involve CDPs include low dispensing fees, minimum markups and lower ingredient costs. The result is cost savings for you and your plan, while your employees are supported by the medications they need. Another Smart Rx product involves targeting high-cost specialty drugs. It means looking for alternatives to these expensive drugs as well as helping find alternative payors (so your plan doesn’t have to!).
- Disability Management Services – Our disability management services are provided through the Disability Management Institute (DMI). We include these services in our long-term disability plans because we recognize how valuable they are.DMI’s services start when an employee is absent for five days due to non-work-related injury or illness. At this point, DMI gets in touch with the absent employee and begins liaising with the employee and you (the employer). They communicate pertinent, non-confidential information to help you with planning for the employee’s absence. For the employee, DMI is there to support the employee in completing paperwork, seeking medical services and rehabilitation (if required) and developing a return-to-work plan when the employee is able. They act as a bridge between the workplace and the employee, ensuring the employee feels connected to the workplace. These services sound great, but you may wonder how they save you money. It’s a good question, and the answer is simple: they help get the employee back to work as soon as they are able. This means shorter disability claims, which translates into lower disability costs.Having a DMI team member who is familiar with all the ins and outs of processes, treatments and options regarding illness and injury is a big asset for the employee. Even more, research (and DMI’s own experience) shows that the sooner an ill or injured employee is back to work, the more likely they are to return to pre-disability health. It’s a win/win for employer and employee.
- Employee and Family Assistance Program – An employee and family assistance program (EFAP) offers counselling and support for mental wellbeing. For employees, it’s free and confidential and removes the barriers to getting counselling. It can be an important cost-containment tool for a plan because it helps employees deal with mental health challenges (including stress related to living through a pandemic). By addressing and supporting an employee’s mental health, the employee benefits plan is contributing to fewer absences, lower levels of presenteeism, lower prescription drug costs and lower disability claims. GroupHEALTH believes in the value of an EFAP so much that we include access to one in all of our group benefit plans. Not only is it a positive, preventative approach to caring for mental health, it also saves money and supports employees.
Consider Changes to the Plan
If your plan already has cost containment features in place, and you’re struggling with whether you should cut the plan or cut benefits, consider changing the cost-sharing distribution. If you pay for 100% of the premiums, consider temporarily sharing some of the financial burdens with company employees. Explore different scenarios carefully before making any changes.
Look at the plan coverage and prioritize which benefits your company employees want most. Consider scaling back some of the other benefits if necessary. Perhaps reducing the health spending account is in order or extending the recall period for preventative dental coverage.
Most important is to work closely with your benefits provider to explore all options before making changes. The right provider should be presenting you with options. They should be the team lead in running different scenarios, making recommendations and helping you find the right solution for your company. Don’t settle for anything less. If they’re not supporting you through this tough time, then it’s time to look for a better provider.
Good Advice is Key
Is your employee benefit plan out of sync with your current situation? Are you in need of a solution other than cutting employee benefits altogether? Review your options with one of our licensed expert advisors on the phone, or contact us for a comparison quote.
Whether you’re looking for extended health and dental coverage, disability coverage, or life and critical illness coverage, GroupHEALTH has affordable benefits packages that work as hard as you do.