Universal Music Canada Inc. got a wake-up call in 2009, when the renewal of its insured benefits plan for about 180 employees added an unprecedented 14 per cent to the bottom line.
A look at claims data revealed an inaugural claim for a biologic drug and a 27 per cent increase in spending on paramedical benefits. Working with its advisor and carrier, the company made the following changes: a 20 per cent copayment on the first $5,000 claimed for drugs, then 100 per cent coverage after that; a 20 per cent copayment for all paramedical benefits and a reduced annual cap to $400 from $500; and a 20 per cent copayment on basic dental services and recall examinations every nine months instead of every six.
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Printed materials and face-to-face meetings transformed employees’ initial negative reactions into an appreciation of the need for change. “We did a lot of education about the reasons why we were forced to make some difficult decisions and to ask for everyone’s participation in taking some ownership in how we manage this plan going forward,” said Voula Vagdatis, vice-president of human resources at Universal Music Canada.
Since 2009, renewals have added an average of just one per cent to the bottom line.
The renewal itself helps achieve the efficiencies. “It’s a 12-month process, so there are never any unknowns,” said Noel MacKay, principal consultant at the Williamson Group. “Every month, we send a financial estimate of the plan. We look at month-over-month trending and we always give a renewal forecast.”
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