IS IT TIME TO RECESSION-PROOF YOUR EMPLOYEE HEALTH BENEFITS PLAN?

There is a lot of talk about the economy right now and what will happen next. You may be examining your business and wondering how you can prepare for the worst; this might include looking at your employee health benefits plan. If a recession is coming, should you make changes?

Challenging Times

Economists are forecasting that Canada will likely enter a mild to moderate recession in the coming year – this means two successive quarters of decline in economic activity. As a business owner, anticipating this downturn is stressful. With inflation, costs are going up for your business, and business could be going down.

Often, during tough financial times employers consider cutting back on spending. While making changes to your employee health benefits may be something you have to consider, you’ll have to strike a balance. Keep in mind that a recession is hard on you as a business owner, but it’s also hard on your employees. You need to find the right balance between supporting your most valuable asset (your employees) and keeping your business profitable.

Remember Why

Begin by remembering why you started sponsoring an employee health benefits plan in the first place. Were you using it as a tool to retain your current employees and recruit new ones? During a recession, you may still need the plan for those very same reasons. It’s likely that you will need the best employees to get your business through a challenging economic time.

You probably also started sponsoring the plan because you wanted to support your employees, something you will want to continue to do especially during challenging economic conditions. Fortunately, recession-proofing your employee health benefits plan doesn’t have to mean cancelling the plan or making drastic cuts to coverage levels – that is not supporting your employees. Instead, you’ll have to work with your provider to get creative on how to continue to support your employees even if your budget changes.

Know your options

Now is the time to meet with your employee health benefits provider to come up with a plan if a recession does happen and your business is impacted. Know your options and what types of changes are possible.

It’s also important to know which benefits your employees value the most. Consider doing a confidential survey so that you know which benefits are valued and which are not as important to your employees. This way if you make changes, you can focus on preserving the benefits that are most valued and make changes to the ones that aren’t as valued.

Introduce Cost Control Now

Hopefully, when your provider designed your benefits plan, cost control mechanisms were already built into the plan. If this was not the case, then now is the time to do this. Don’t wait until things are dire – be proactive and introduce cost control mechanisms now so that unnecessary financial waste is trimmed off your benefit plan going forward. Focus on the biggest cost drivers for your plan. At GroupHEALTH we have many different cost control mechanisms, including:

1. Smart Rx Solutions – These products are designed to target prescription drug costs. Depending on the product, employees are encouraged to choose lower-cost (but equally effective) prescription drugs and/or purchase those drugs from a central dispensing pharmacy.
   This means asking for generic drugs or trying lower-cost drug alternatives before moving on to more expensive options. The central dispensing pharmacy element means employees must have their prescriptions filled through a pharmacy partner who couriers the medication directly to the employee.
   Employees must choose to make these smart choices in order to receive full coverage for their prescription medication. This is a creative way to save the plan money while still ensuring employees are supported with the prescription drug coverage they need. Many employees find having their prescriptions delivered to their door an additional benefit!
2. Disability Management Services – Disability management services are both an extra support/benefit for your employees and a cost control mechanism. These services go hand in hand with long-term disability coverage and are based upon the idea that early intervention is key to helping employees return to pre-disability health.
   After five consecutive days of absence due to non-work related injury or illness, a disability management professional will become involved. The employee will receive support with things like: filling out paperwork, booking medical appointments and sharing non-confidential updates with you (the employer). The employee feels supported and you receive the necessary information to plan for the employee’s absence.
   The next step is a customized return-to-work plan created by the Disability Management Institute. This helps get the employee back to work as soon as they are able. Returning to work as soon as possible is a key factor in whether or not the employee returns to pre-disability health. It’s also an important cost control mechanism. Returning to work as soon as they are able helps shorten the length of the disability claim, saving you and your company money.
3. Employee and Family Assistance Program (EFAP) – Just like disability management services, an employee and family assistance program supports employees but also helps control costs. An employee and family assistance program offers free, short-term counselling and around-the-clock access to mental health professionals.
   Giving employees access to support for mental health is good for employees, but it’s also a good cost control initiative. Employees who have easy access to support are more likely to get the help they need before their mental health deteriorates. This helps control costs because many disability claims and absences stem from mental health challenges.

Be Flexible and Creative

Recession-proofing your employee benefits plan means you’ll have to get creative. Look for inexpensive ways to support employees.

For example, consider including a Health Spending Account (HSA) as part of your plan. A Health Spending Account functions like a bank account for your employees to use on eligible health and dental services. This gives employees control over how some of their benefit dollars are spent, so they can maximize the health services that mean the most to them. If employees do not use the money in their health spending account, it can be returned to you (the employer).

Expanding the optional benefit offerings available to your employees is another way to help recession-proof your benefits plan. This won’t cost you any money, but employees will benefit from having access to good rates for any additional coverage they may want to purchase.

You can also look at increasing inexpensive wellness offerings – things like walking clubs and fitness challenges. This helps keep morale up and stress down.

Give Practical Tools

When preparing for a challenging economic time, take some time to look at how the benefits you already have may become more relevant. Promote tools available through your Employee and Family Assistance Program, like free financial advice, financial calculators, budgeting and counselling. These types of benefits are already available, but many employees may not be aware of them.

Good Advice is Key

As Canada heads toward a challenging economic time, there are some things you can do now to prepare your employee health benefits plan. As always, we believe in protecting the sustainability of your employee benefits plan (now and in the future). Explore your options with one of our licensed 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.