Canadian employers looking to redesign their benefits plans are in a holding pattern until they hear more details on the Liberal Party of Canada and the New Democratic Party’s joint proposed national dental-care and pharmacare programs.
Last week, the two parties announced plans to form an alliance until 2025 in order to deliver these programs among other promises. The dental-care program, which the federal government plans to roll out first, will cover children under age 12 this year, then expand to those under age 18, seniors and persons living with a disability in 2023, followed by full implementation by 2025. The program would be restricted to families with an income of less than $90,000 annually, with no co-pays for anyone earning under $70,000 annually.
Employers want to know how they should approach their benefits plan redesigns while factoring in the new dental-care program, says Pam Martin, vice-president and senior consultant at Baynes & White Inc. “Everyone is waiting to see what stipulations are included. Companies’ attraction and retention efforts rely largely on their benefits plans, so they need competitive offerings.”
Although the dental-care program would expand coverage for people who don’t have access to employer-sponsored health plans and for some low-income earners, the devil is in the details. Many employers’ workforces are comprised of individuals in different income brackets, says Martin, noting employers don’t know if they’ll be able to remove dental coverage from workplace plans for those who fall under the $90,000 threshold. Some of these employees’ may want to keep their current workplace dental plans because they may offer better coverage than the federal government’s program, she adds.
As well, employers that have two streams of employees — those covered under the public plan and those under their workplace plan — would have to ensure they’re providing equitable coverage that’s as good as or better than the public option, says Martin.
She points out that past attempts by governments to provide health benefits to a subset of the population has ended up too costly and been subsequently scaled back. Indeed, the Ontario Health Insurance Plan’s OHIP+ program, originally intended for dependants under the age of 25, was limited after a year to only dependants who aren’t covered under employer-sponsored plans. “The cost relief just has never panned out for employers, regardless of whether there is universal health care or OHIP+ and that’s a shame.”
Over the last two years, there’s been so much disruption and Canadians are looking for stability, said the Canadian Life and Health Insurance Association in an emailed statement to Benefits Canada. “We know Canadians value their workplace benefits plans that give millions access to affordable prescription drugs, dental care and health benefits. We don’t believe these benefits should be disrupted by this announcement.”
The CLHIA noted it shares the government’s concerns about high drug costs and gaps in coverage and takes a positive view of efforts, both at the federal and provincial levels, to ensure all Canadians can access these benefits. However, the association also said it hopes the government will work to expand coverage by building on the workplace benefits that are already working for 26 million Canadians.
Once the national dental-care program is in place, says Martin, employers may restructure their plans by removing dental coverage and putting those savings into a health-care spending account. While employees who qualify for the government program will win in this scenario, she notes others may only get more funds in their HCSA that they can spend toward their dental costs. However, if the government plan only covers basic dental services, employers could choose to only cover major surgeries. Both scenarios could lead to a gap in the equity of coverage among employees with different pay scales, she notes.
“If the government plan isn’t that great, employers will have to either enhance or change their offering. Employers really want to do the right thing and offer a good plan that ensures they’re covering the necessities along with the nice-to-haves.”