It’s no secret that Canada (along with many other countries in the world) is dealing with a challenging economic landscape. High inflation is having an impact on people across Canada, including your employees. The good news is that your employee benefits plan can support your employees during high inflation.
If you turn on the news, you’re sure to hear about the high level of inflation that Canadians are living with. Inflation refers to a rise in the average level of prices over time. As prices go up, our money can’t buy as much as it used to. This loss of purchasing power can have a negative impact on everyone’s standard of living.
Inflation is now at its highest level in almost 30 years, and there is speculation that there could be a recession coming. Without a doubt, inflation is impacting your employees.
How High Inflation Impacts Employees
There are two main ways that high inflation is impacting your employees: financially and mentally. In many ways financial and mental challenges are often linked.
Financially, your employees are dealing with the reality that everything costs more. The price of goods is rising. For example, the price of gas has risen 48% compared to the same time last year. This requires your employee and their family to spend a much larger portion of their income on gas then they were spending last year. Food, housing and other products and services have also gone up substantially.
As a result of rising prices, employees may have to reduce spending on non-essentials. For example, they may choose to skip a visit to a physiotherapist or discontinue a gym membership in order to stay on a budget.
The financial and mental impact that inflation is having on your employees can negatively influence productivity and performance. Bottom line: it’s not good for business.
Employee Benefits During High Inflation
There are several ways that your employee benefits plan can support your employees during this period of high inflation.
The best way to support the mental health of your employees is to ensure they have access to an Employee and Family Assistance Program (EFAP). An EFAP is available 24/7 and can provide free short-term counselling. The Employee and Family Assistance Program also provides online resources, including podcasts, articles and toolkits. Employees who are experiencing mental health challenges (like stress or anxiety) have somewhere to turn to, so they can get the help they need.
Another way to support the mental health of your employees during this difficult economic time is to reach out to your employee benefits provider. Review what is covered by your employee benefits plan and make changes if necessary. For example, if your plan provides coverage for an employee to visit a phycologist but not a clinical counsellor, now may be a good time to consider making adjustments. A clinical counsellor provides mental health support but is typically less expensive. This means an employee could “stretch” their benefit dollars further by having access to a clinical counsellor as an option.
Financial Counselling and Advice
Helping employees effectively manage their finances is another way that you can support them during high inflation. One of the best ways to do this is through the Employee and Family Assistance Program (EFAP). Many employees aren’t aware that the EFAP can provide financial counselling and advice. Highlighting these resources, along with the many articles, calculators and podcasts available can help give employees the support they need to deal with a challenging financial time.
Including a health spending account (HSA) as part of your employee benefits plan is another way to support your employees during this period of high inflation. A health spending account functions like a bank account for health expenses. You choose the amount and your employees can spend it on eligible health and dental expenses. It can be really helpful for those employees who are feeling the impact of everything costing more.
Money in the health spending account can be used toward unpaid portions of other benefits. For example, if your benefit plan covers 80% of a visit to a paramedical practitioner, the employee could claim the other 20% from their health spending account so as not to be out-of-pocket. In challenging economic times, paying anything out-of-pocket can discourage employees from things like visiting the dentist or seeing a paramedical practitioner. This can have a negative impact on the health of your employees, in turn impacting the long-term productivity of your business.
If you already include a health spending account with your employee benefits plan, now might be a good time to consider increasing the amount. Because the price of everything has gone up, the money available in the health spending account doesn’t go as far as it used to.
During a period of high inflation (when things cost more) pursuing wellness is often the first thing to go. Your benefit plan can support your employees in pursuing a healthier lifestyle by including wellness benefits.
When the budget is tight, things like gym memberships and personal training are the first things that an employee is likely to cut. The problem is: these types of activities are so valuable when it comes to improving fitness and health and reducing stress. Providing coverage to support employees in achieving better mental and physical health can have a positive impact on their work.
Good Advice is Key
Is your employee benefits plan well-equipped to support your employees during high inflation? 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.