Employers suspend overhaul of their benefit plans

While the dental plan does extend coverage to people who don’t have access to employer health plans and some low-income people, the details are tricky. (Photo: 123RF)

GROUP INSURANCE AND PENSION PLANS. Canadian employers who want to overhaul their benefit plans are waiting for more details on the national dental and drug insurance programs offered jointly by the Liberal Party of Canada and the New Democratic Party.

In March, the two parties announced their intention to form an alliance until 2025 to implement these programs, among other promises. The dental program, which the federal government plans to roll out first, will cover children under 12 this year. It will then extend to those under 18, the elderly and people with disabilities by 2023, before being fully implemented in 2025. The program would be reserved for families whose annual income is less than $90,000. People whose annual income is less than $70,000 would not pay a copayment.

According to Pam Martin, vice president and senior consultant at consulting firm Baynes & White, employers want to know how to approach the redesign of their benefits plan in light of the new dental program. “Everyone is waiting to see what conditions will be included,” she notes. Companies’ attraction and retention efforts rely heavily on their employee benefit plans, so they need to offer competitive offers.”

While the dental plan does extend coverage to people who don’t have access to employer health plans and some low-income people, the details are tricky. Many employers’ workforces are made up of people in different income brackets, says Pam Martin, who points out that employers don’t know if they’ll be able to remove dental coverage from company plans for members who are below the $90,000 threshold. Some of those employees may want to keep their current dental plan if it offers better coverage than the federal program, she adds.

In addition, employers who have two categories of employees—those who are covered by the public plan and those who are covered by their employer’s plan—will need to ensure that they offer fair and equally good or better coverage , than the public option, explains the specialist.

She points out that past attempts by governments to provide health benefits to a subset of the population proved too costly and were subsequently scaled back. For example, OHIP’s OHIP+ program, originally intended for dependents under age 25, was limited after the first year to dependents who were not covered by employer plans. “Cost relief has simply never worked for employers, regardless of the existence of universal health care or the OHIP+ program, and that’s a shame,” says Pam Martin.

Over the past two years, there has been a lot of disruption and Canadians are looking for stability, the Canadian Life and Health Insurance Association (CLHIA) said in a statement emailed to Benefits Canada. “We know that Canadians place great importance on employer-provided benefit plans, which provide millions of people with access to prescription drugs, dental care and medical benefits at affordable prices. affordable. We do not believe these benefits should be disrupted by this announcement. »

CLHIA said it shares the government’s concerns about high drug costs and coverage gaps, and welcomes efforts, both federal and provincial, to ensure that all Canadians can access these benefits. However, the association also said it hopes the government will work to expand coverage, building on the workplace benefits that already benefit 26 million Canadians.

Following the implementation of the national dental plan, employers will be able to restructure their plans by removing dental coverage and placing the savings in a health spending account, notes Pam Martin. While employees eligible for the government program come out ahead in this scenario, she notes that some might get more funds in a health care spending account than they might spend on dental expenses. However, if the government plan only covers basic dental services, employers may choose to cover only major surgeries. Both scenarios could lead to a gap in coverage equity among employees with different salary ranges, she notes.

“If the government plan is not adequate, employers will have to improve or modify their offer. Employers really want to do the right thing and provide a good plan that ensures they cover basic needs as well as attractive additional benefits. »

This text written by Lauren Bailey was originally published in English by Benefits Canada.


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