Employers, insurers have role in managing benefits plan sustainability

While insurers are consistently providing innovative plan design options for employers, that doesn’t detract from the reality that it’s a difficult time for employers, according to the Canadian Life and Health Insurance Association’s Karen Voin.

“At the heart of it, they want to ensure they’re not impacting their employees, and are really conscious of what the impact of the change will be on employees,” said the CLHIA’s vice-president of group benefits and anti-fraud, speaking at a forum in Toronto on Thursday.

“It’s a struggle between managing the costs, rising costs and their plan and making a change that’s going to potentially create some employee impact.”

Read: Private drug plan claims, cost per claimant on the rise, finds new research

She noted the landscape has changed in the past 10 years, “in a good way, in a lot of ways, because there are a lot of new innovative medications coming on the market. Biologics have been a game changer, and that’s providing great treatment alternatives for patients and clinicians. The unfortunate thing is that they’re also coming with a pretty high price tag, and that creates challenges for an employer to continue to manage and offer drugs.”

In 2017 alone, health benefits plans provided $34 billion in coverage, according to data from the CLHIA. Of that $34 billion, about $11 billion was for prescription drugs alone. Also, the majority of Canadians have some form of coverage through an employer plan and have access to prescription drugs, which is still the most used benefit under workplace benefits plans, said Voin.

“This helped keep employees healthy and productive at work. And the interesting thing is that employer plans continue to increase. They’ve moved from 71 per cent to 79 per cent in the last decade. That speaks to the value employers place on providing these plans for their employees.” 

Read: Breaking down the cost drivers: Deep dive predicts 4.9% annual rise for drug plans

However, Voin said she believes public and private insurers should work together through the pan-Canadian Pharmaceutical Alliance. Currently, the alliance leverages only half the market to negotiate lower prices.

“For us, it’s really about [getting] a system in place that works well. [Right now] it’s a shared system, and it’s not perfect,” she said. “That’s why there’s this current pharmacare discussion continuing through the advisory council in the federal government, and we support that discussion. But there are a lot of things that do work well in the system. So from an industry perspective, let’s build on the existing, shared public-private system, and let’s make it better, affordable.”

Voin noted it’s important to ensure the majority of Canadians who do have benefits plans retain them, “but let’s make sure that others who don’t have access to drugs obtain that [access].”

Read: A primer on the parliamentary report on pharmacare and its impact on the benefits industry