Affordable benefit plans are an essential incentive for employees, but currently
pose challenges for companies as costs continue to rise and health claims and
prescription drug requirements become more complex.
As the population ages, the challenge for plan sponsors to balance the
health of their members and the cost of offering competitive benefit and prescription
drug coverage will continue to increase. According to the 2017 Drug Trend Report
by Express Scripts Canada, 20 per cent of employees are claiming almost 80 per cent
of prescriptions drug costs from their employer-offered benefit plan. This imbalance
raises complications in terms of productivity, plan costs and the overall health of
Communication between the employer and its employees is key to ensuring proper
usage of the benefit plans and understanding of the financial impact and productivity
loss that come from non-adherence.
The Drug Trend Report found that the people who need their medications the most
– the employees who are making 80 per cent of the claims – are also the people who
are the least adherent in taking their medications properly. HR professionals, now more
than ever, need to be aware of additional support for this group of employees making
the most claims to help manage their conditions and treatments so that they are
adherent. Companies should work with plan benefit providers that have active pharmacy
services to help tailor programs to address some of the most common chronic
conditions in order to reduce absenteeism, loss of productivity and reduce the risk of
these employees going on disability leave. HR professionals and employers must also
be aware that sometimes these claims are made by employees on behalf of their dependent
or spouse. This requires education and open communication to ensure everyone
covered in the benefit plan is properly adhering to their medications and are also made
aware of programs and treatments available to them.
When only a small group is making the majority of benefit claims, companies are
challenged with how to offset costs.
“The Drug Trend Report found that average annual drug spending for these claimants
is 15 times that of other employees, to break it down further, the top 20 per cent of
claimants represent 79 per cent of plan spending, with an average cost per claimant of
$3,386,” said John Herbert, director of strategy, product development and clinical services
with Express Scripts Canada.
When employers react to increases in group benefit plan costs by choosing to reduce
coverage, it negatively affects morale and employee engagement. It also becomes harder
for companies to continue to remain competitive and attract top talent. Employees who
do not submit many claims feel it is unfair that they need to be penalized by paying
more in premiums or having reduced coverage.
It is essential for employers to better understand the needs of employees who are
high-cost claimants and concentrate efforts on providing them with timely support to
manage their condition and drug therapy. Most group insurers now also offer health and
wellness apps and tools to further support the employers’ efforts in helping employees
ismagilov / 123RF Stock Photo
THE RISING COSTS AND CHALLENGES OF
MANAGING BENEFIT PLANS
By Stéphanie Myner-Nham
HRPROFESSIONALNOW.CA ❚ JULY 2018 ❚ 19