How is benefits plan design evolving?

About three-quarters (72 per cent) of Canadians with a workplace health benefits plan have a traditional plan and 28 per cent have a flex plan, according to the 2020 Sanofi Canada health-care survey.

This is up slightly from 2017, when 80 per cent of plan members said they had a traditional plan and 19 per cent said they have a flex plan.

Among plan sponsor respondents with a traditional plan, 67 per cent said they’d prefer to offer a flex plan. This number was broken down into 43 per cent that said they’re considering it and 24 per cent that said there are too many barriers.

Read: Employees overwhelmed by flex plan decisions: Sanofi survey

The survey also found 57 per cent of plan sponsors offer health-care spending accounts, comparable to last year’s findings (61 per cent) and up significantly from the previous two years (33 per cent in 2018 and 31 per cent in 2017).

While large employers, with 500 or more employees, were much more likely than smaller employers, with fewer than 250 employees, to offer HCSAs (73 per cent versus 42 per cent), the survey found growth is strong across all sizes.

About half (51 per cent) of plan sponsors said they anticipate HCSAs will play a more significant role over the next five years, up from 36 per cent in 2018. This ranges from 43 per cent among smaller employers to 61 per cent among large employers and increases to 64 per cent among plan sponsors with a drug plan maximum.

“By offering options like health[-care] spending accounts, plan sponsors that can’t afford flex plans can give plan members some of the flexibility they want,” said Marc Bertossini, director of marketing for group and business insurance at Desjardins Insurance and an advisory board member. “But traditional health benefits are also very important — for preventing disability, for example. Plan sponsors should determine what they want their health benefits plans to accomplish and then decide what will best meet their objectives and plan members’ needs.”

Read: Back to basics on health-care spending accounts

Among plan members with an HCSA, 94 per cent said they used at least some of it in 2019. Those who used it reported spending 62 per cent, on average, of the funds available, ranging from an average high of 73 per cent in Alberta to a low of 56 per cent in British Columbia. And plan members in the public sector used the plan more (70 per cent), on average, than those in the private sector (57 per cent).

When asked why they didn’t use all of the funds available, 43 per cent of plan members said they didn’t need it (43 per cent). Some 27 per cent said they’ll carry unused funds over to next year and 16 per cent said they forgot about it.

Virtually all (93 per cent) plan members with HCSAs agreed they like having one and 82 per cent of plan members without HCSAs agreed they’d like to have one as part of their workplace benefits plan.

Returning to plan sponsors, 35 per cent said they offer a wellness accounts for health-related taxable items, comparable to last year’s finding (37 per cent) and up from 14 per cent in 2017. Again, employers with 500 or more employees were much more likely (49 per cent) than employers with fewer than 250 employees (21 per cent) to offer wellness accounts.

Read: Employee, employer views on quality of benefits plans differ, finds Sanofi

The survey also presented plan members with the scenario where the cost of their health benefits plan increased and their employer was unable or unwilling to pay, asking whether they’d prefer to pay higher premiums to maintain their current benefits, reduce the benefits and pay the same premiums or pay a higher portion of the cost upon use of the benefit.

The results showed a steady shift over the years. Fewer than a third (29 per cent) said they’d prefer to pay higher premiums, down from 43 per cent in 2009; 24 per cent said they’re willing to reduce benefits, up from 14 per cent in 2009; and 19 per cent said they’d prefer to pay more at the time of use, down slightly from 23 per cent. That leaves 28 per cent who said they don’t know, up from 20 per cent in 2009.

“Technology is enabling the industry to explore new and better ways to bring flexibility into plan design,” said Marie-Chantal Côté, vice-president of market development and group benefits at Sun Life Canada and an advisory board member. “And as plan members exercise their choices and become more familiar and engaged with their benefits plan, we will see greater opportunities to proactively interact with them — for example, with recommendations that support healthy behaviours.”

Read: Majority of benefits plan members agree workplace culture encourages wellness: survey