One expert encourages employers to avoid a ‘use it or lose it’ approach, while another emphasizes the value of encouraging benefits usage as an attraction and retention strategy.
Richelle Feddema, senior manager, anti-fraud member management, the Canadian Life and Health Insurance Association
Employers play a crucial role in providing their employees with access to health benefits and ensuring the sustainability of these benefits.
Benefits fraud and abuse are significant concerns for employers, which strive to prevent the reimbursement of fraudulent claims or claims that aren’t medically necessary.
Read: Expert warns against urging employees to use up benefits by end of year
The industry provides supplementary health benefits to nearly 27 million Canadians through their workplace benefits plans. The goal of all parties is to ensure benefits are available when those covered under group plans need them. Fraud and abuse can force employers to make difficult decisions around reducing benefits or increasing the costs to their employees.
When marketing their services, providers should avoid ‘use it or lose it’ messaging and focus on recommending medically necessary treatments. In their roles, providers should address the root causes of diseases or conditions to restore health, achieve full recovery and enhance the quality of life for individuals with chronic conditions. They shouldn’t encourage patients to use all of their annual maximums for various products or services independently of these kinds of medical assessments.
While employers may cover some or all of their workers’ health benefits, promoting a ‘use it or lose it’ approach may put the long-term financial sustainability of plans at risk.
Read: 58% of global insurers anticipating health benefits cost increases over next 3 years: survey
It’s important for employers to communicate benefits clearly and encourage responsible use, rather than just focusing on maximizing usage. When employees or dependants use their annual maximums for non-medically necessary products and services, it constitutes benefits abuse and can lead to increased premiums, reduced coverage and impact plan sustainability.
Cindy Marques, director of financial planning at Open Access Ltd.
Workplace benefits are only as valuable as they are utilized.
Encouraging employees to take full advantage of them is essential for driving meaningful impact. These benefits exist to support the personal and financial health of employees. When used proactively, employee benefits contribute to reduced absenteeism, increased productivity and higher morale. By reinforcing a ‘use it’ philosophy, employers emphasize the value of these offerings and foster a culture where employee well-being is visibly prioritized.
Education plays a crucial role. Many employees are unaware of the full scope of their benefits or how to access them effectively. Employers should take an active role in educating their employees on what’s available, how these benefits work and why they matter. This guidance not only empowers employees to make informed decisions about their finances, but also strengthens the perception of the employer as a supportive partner.
From a cost standpoint, some benefits plans come with fixed administrative costs, regardless of employee usage. When benefits go unused, employers may still shoulder these expenses without delivering real value to their workforce. While it’s true that increased utilization will raise overall costs, these expenditures directly align with the intent behind offering benefits: to enhance employee well-being, satisfaction and retention.
Ultimately, encouraging employees to use their benefits isn’t about pressuring them — it’s about ensuring they derive real value from a program that’s meant to support them. When employees feel cared for and supported, it reflects positively in their engagement and loyalty, which benefits the employer and the organization overall.
Blake Wolfe is the managing editor of Benefits Canada and the Canadian Investment Review.