Designing Employee Benefits Plans Beyond Provincial Health Coverage

This article will discuss the major gaps in Canadian healthcare coverage and provide suggestions as to how employee benefit plans can help cover these gaps. By doing so, you can use these benefits as a value proposition when attracting top talent.

What Are The Advantages Of Using Healthcare Benefits To Set Yourself Apart From Competitors During The Recruitment Process?

While Canadian healthcare coverage may seem comprehensive at first glance, there are actually gaps in the system that Canadians often overlook.

The Biggest Gaps In Canadian Provincial Health Coverage Can Be Used To Your Advantage.

Gaps in Canadian Medicare include the lack of a national pharmacare program, differences in treatments and coverage offered by each territory and province, and a failure to integrate complementary medicine.

But let’s first review available coverage to understand better where the gaps are coming from.

1. Medicare – provincial or territorial coverage based on residency. The Canada Health Act outlines the types of coverage which each provincial or territorial plan must offer.

General categories include in-hospital care, doctor’s visits, and diagnostic services. Some citizens may also be eligible for supplementary benefits based upon income or health. Consult with the responsible provincial organizations regarding the offered coverage, as it varies across provinces. 

2. Provincial Pharmacare – under the Canada Health Act, each province or territory must provide prescription drug coverage. Coverage between the provinces and territories varies. In some jurisdictions, the amount of reimbursement is tied to income. In others, there are several programs from which to choose.

It’s difficult for employers operating in multiple jurisdictions because a treatment covered in one province might not be covered in another. Each territory or province has its own list of drugs that it covers, which isn’t the same everywhere. This means that employees are treated differently based on their residency.

3. Extended Health Plan – extended health benefits generally include coverage for prescription drugs, paramedical practitioners, out-of-country coverage, medical supplies, and dental care.

Coverage is most often available through an employer or association-sponsored plan.  However, individual plans are available for people who are self-employed, retired, or simply without coverage.

Extended Health Plans are generally the primary source of reimbursement for prescription drugs and medical supplies, as most Canadians do not reach the prescription drug maximums under their provincial or territorial pharmacare programs.

Additionally, they do not qualify for reimbursement for medical supplies under the supplemental benefits portion of Medicare.

4. Private Healthcare – some individuals pay fees to a private healthcare facility which has opted out of provincial coverage. In this case, the facility bills patients directly. These centres offer integrated healthcare and generally avoid waiting times found in the public system, but they come with a hefty price tag.

However, employees and thus employers must be aware that patients of these facilities need to maintain their Medicare coverage in order to remain eligible for provincial benefits such as in-hospital care, provincial pharmacare and, most importantly employer sponsored extended health plans.

All Canadian insurers require employees of an extended health plan to be a member in good standing of their respective provincial or territorial plan.

5. In-home Care – Nursing care is available for individuals who require assistance to remain in their home due to illness, injury, or infirmity.  Provincial and territorial plans provide some publicly funded assistance.

For example, community health nurses make in-home visits to new mothers following discharge from the hospital.  Extended health plans usually offer an annual allowance for private-duty nursing. However, limitations may result in out-of-pocket expenses for practical needs such as meals and laundry.

What Should Be Included In The Best Health Benefits Plan On The Market?

Employers who wish to help employees address the gaps have several tools available:

• Provincial Pharmacare programs will consider covering prescription medications that are not usually covered by the formulary on a case-by-case basis. 
• Extended health insurance carriers have developed internal programs to assist plan sponsors and their members in helping manage costs on prescription medications which exceed the annual pooling limit.

Your benefits advisor or insurance company can also provide details on accessing these programs. Insurance carriers also provide assistance in accessing the best course of treatment to shorten the duration of a condition resulting in a long-term disability claim.

An experienced advisor can help ensure potential disabilities receive intervention and assistance as early as possible.

• Employers can help supplement annual plan limits for expenses such as physical therapy, home care, or medical supplies by offering Health Care Spending Accounts (HSA).
• Finally, an employer can review the often overlooked pooled benefits to determine if any changes or enhancements should be considered for short and long-term disability coverage, critical illness insurance, or long-term care.

For many Canadians, this coverage will be enough throughout the course of their lives. But what happens when there are more serious conditions for which basic levels of coverage fall short?

Employees Are Increasingly At-Risk for Debilitating Conditions

What happens if an employee or family member experiences chronic or disabling conditions that may render someone incapable of working for long periods of time? Or require ongoing care for an indefinite period?

Without additional layers of coverage, a person may find themselves needing to tap into retirement savings, home or business equity, or simply take on more debt.

Some of the most serious risks when it comes to potential long-term disabling conditions lie in:

1. Disability. Losing the ability to earn an income due to disability is one of the most catastrophic events that can happen in a person’s lifetime. The Canadian Institute of Actuaries reports that one in four people will be disabled at least once before they reach age 65. The average length of a disability, should it last over a 90-day period, is 5.75 years.
2. Critical Illness – Heart attack, Cancer, and Stroke. There are many other critical conditions – far too many to list, sadly – but these are the big three and comprise a significant majority of critical health problems in Canada.
3. Long-term care – A loss of functional independence can severely impact individuals and their families, even if the condition is only temporary or short-term. The consequences of long-term or permanent disabling conditions are even more drastic.

However, there is good news – employers and individuals can take additional steps and add layers of coverage that preserve their other assets before the worst-case scenario happens.

How To Best Secure Your Employees From Disability?

Employers who wish to assist employees have a number of tools that can help prepare them and provide them with the help they need.

These include disability management programs, critical illness programs, and long-term care coverage.

Disability Management Programs

Managing a program is more than merely including long-term disability coverage in your overall employee benefits offering. Employees often undervalue disability coverage because the benefits are not as tangible or immediate as something like dental or vision care or massage therapy.

However, employees should understand the real impact of losing one’s ability to earn an income because of a disability.

Here are some steps employers can take:

• Help employees understand the coverage they have.
• Help prevent employees from getting injured in the first place, especially on the job.
• If an employee does become disabled, have a plan in place to help limit the time away from work. Also, provide a support network to help them return and work with them.

Showing you truly care about an employee’s well-being and good health can significantly benefit your workplace dynamics.

Long-Term Disability Plan Design

Basic group disability coverage has limitations, but as an employer, you have some degree of customization to help maximize the program for your organization.

• Identify key employees that are integral to the viability of your company. They may require a more customized solution that benefits both company and individual alike.
• Consider all employees and income levels when designing benefit programs to maximize coverage across the board.
• Review and identify parts of your existing program that meet expectations or fall short - are there benefit shortfalls because of plan maximums that discriminate against higher-salary employees? Are waiting periods to file a claim too long? Are benefit duration periods long enough? What can be done as a company or by working with the individual to address any additional gaps?

Critical Illness Programs

Like disability, providing coverage for critical illness is more than just selecting a box and adding it to your benefit plan.

Unlike disability, however, one could say that critical illness coverage is very much appreciated and understood by plan members. This is because most if not all, employees will have firsthand experience or know of somebody that has cancer or suffered a heart attack or stroke.

Actions employers can take:

• Help employees understand their coverage and what qualifies as a critical condition to receive coverage.
• Create an environment that focuses on prevention and good health. Common examples include providing wellness programs, health incentives, gym memberships, fitness trackers, and nutrition lessons.

Critical Illness Plan Design

Under a group plan, the cost of coverage is fairly reasonable as benefit amounts tend to be on the smaller end of the spectrum ($10,000 is quite common).

If employees are interested in more coverage or coverage that is portable and will be kept even after they leave the company, let them know they have options for individual coverage (the same is true for disability).

Conclusion

The choice is often balanced with costs - unfortunately, what you want to do for your employees is not always what you can do. However, for employers, there are options.

You can provide basic coverage through a benefits plan. You can provide enhanced individual options for all or a select group of employees based on their roles and importance to the company. You can provide education to help your employees understand and appreciate the benefits they are receiving.

It can’t be stressed enough - education is of paramount importance, especially when it comes to preventing disabilities and critical conditions. Helping your employees achieve a balanced and healthy lifestyle while providing coverage in the event of a serious condition benefits both company and the employees in the end.

Employers see greater employee loyalty and retention, and employees are happier and more productive, knowing they are supported and looked after.