The average cost of employer-sponsored health benefits in Canada is expected to decline to five per cent in 2024, down from 7.5 per cent in 2023, according to a report by Aon.
The report, which is based on insights from more than 100 global Aon offices that broker, administer or advise on employer-sponsored medical plans, found diabetes, mental health and autoimmune diseases are the top three medical conditions driving medical plan costs in Canada, while cardiovascular conditions, cancer/tumour growth and high blood pressure are driving medical plan costs globally.
A gradual return to normal inflation levels, combined with cost-control measures implemented by group benefits plan sponsors in recent years, provides a better forecast for the health-care cost trend in Canada compared to 2023, noted the report.
North America’s cost trend (7.6 per cent) is the region’s highest since 2014, when it was 8.5 per cent; however, it’s still the smallest increase of any of the global regions. The global cost trend for 2024 was forecasted at 10.1 per cent.
“We have been in a period of remarkable inflationary conditions and economic volatility,” said Rui Silva, Aon’s vice-president and medical trend leader in health solutions, in a press release. “The series of shocks affecting economies around the world after the COVID-19 pandemic continue to create an unstable environment for the health-care market, despite continued signs of improvement. Volatile conditions will persist.”