While more than half (54 per cent) of employees prefer flexible benefits plans, they find making choices to be a challenge, according to the 2017 Sanofi Canada health-care survey.
When faced with choosing the type of flexible benefits they want, many employees become overwhelmed. They frequently select the option closest to their former traditional plan or may choose a plan that doesn’t suit their needs. The result can be appeals for exemptions and associated increased administrative costs.
“People tend to stick to what they know based on past utilization,” said Ezaque Lopes, regional vice-president of business development for Ontario at SSQ Financial Group and an advisory board member for the survey. “The cost savings for plan sponsors can therefore be less than expected, but the administrative burden that comes with communicating the plan design features and options can increase tremendously.”
Employers should take advantage of technology to help staff members select the most appropriate benefits plans, said Carol Craig, director of human resources, benefits and pensions at Telus Communications Co. and an advisory board member. For example, tools could make suggestions based on members’ claims behaviour, previous interactions and selections made by other people at a similar life stage.
Most (80 per cent) plans sponsors offer traditional plans, and 55 per cent prefer them over flexible arrangements, the survey found. Furthermore, employers offering flexible plans are somewhat more likely to describe them as excellent or good than those with traditional benefits (69 per cent versus 61 per cent). The findings suggest interest in flexible plans but perhaps not enough to inspire significant action. Of sponsors that have already implemented a flexible plan, 97 per cent want to stick with it.
In terms of health-care spending accounts, 31 per cent of employer respondents offer them and, of those that don’t, 32 per cent are interested in doing so. Most (70 per cent) employers with health-care spending accounts describe their plans as excellent or very good, compared to 59 per cent of those without them. Employee respondents with health-care spending accounts are also more enthusiastic than those with traditional plans: 55 per cent of those with health-care spending accounts rate their plans as excellent or very good, compared to 45 per cent of those without them.
“These are really positive results, but only a third of plan sponsors say they provide HSAs and not many of the rest are interested. It raises the question of whether the industry is making it too difficult for plan sponsors to adopt this benefit,” said Marilee Mark, vice-president of product and integrated health solutions, group benefits at Sun Life Financial and an advisory board member.
In Alberta, however, health-care spending accounts are much more common: 44 per cent of plan sponsors offer them.
“I’d say at least 70 per cent of my clients have them,” said Art Babcock, vice-president at Aon Hewitt in Alberta and an advisory board member. “They are pretty much standard. They add value to benefits by adding flexibility, without having to go to a full-blown flex plan.”
The advisory board warns against employers adopting health-care spending accounts in the hope that employees won’t use them much, noting while that could save organizations some money in the short term, they won’t see the benefits of their workers receiving greater value from their plans.