Health benefit plans: trends and areas for improvement

Monday, August 25, 2014

Offering a health benefit plan is a good way for employers to differentiate themselves from the competition and attract and retain talent. But they need to make sure the coverage they provide is what people are looking for—which is why it’s important to regularly review service offers and adapt them accordingly.

Every year, the Sanofi Canada Healthcare Survey monitors the pulse of Canadians with employee-sponsored health benefit plans and the plan sponsors that offer this kind of plan. Insurers, benefits advisors and plan administrators eagerly await the survey results, which provide valuable input they can use to make adjustments to their service offers based on market trends. A total of over 1,500 plan members and 500 plan sponsors participated in the 2014 edition of the Sanofi Canada Healthcare Survey, the results of which were released in June. Here are the highlights.

Evaluations don’t always take plan objectives into account

There are plenty of good reasons to offer employees a health benefit plan. When asked, 52% of plan sponsors said the main reason they offer a health benefit plan is to keep employees healthy and productive. That isn’t at all surprising, especially considering that the cost of absenteeism in Canada was estimated at $16.6 billion in 20121. But it’s disconcerting to see how these same plan sponsors measure their plan’s performance. Even though they say they offer the plan to boost employees’ health and productivity, many of them continue to use measurements such as cost and overall plan usage to determine whether the plan is still adequate.

Lack of relevant data

To determine whether a plan is helping to boost employees’ health and productivity, it’s much more useful to look at the causes of absenteeism and disability than at financial data. However, it appears that 60% of plan sponsors have no formal absence-tracking system, so they can’t use this type of data to evaluate their plan. And unfortunately, of the plan sponsors that do have a formal system in place and access to this kind of valuable data, few work with their benefit provider to further investigate the causes of these absences. But that’s exactly what would enable them to make targeted improvements to their plan.

Discussions tend to focus on plan costs

If plan sponsors were better able to evaluate the losses caused by absenteeism, they would definitely be more inclined to make a greater investment in their health and wellness programs to try to prevent those losses. But because so many companies don’t have the data they need, discussions tend to focus more on plan costs than on solutions that could improve employee productivity. That’s too bad, because by always focusing on reducing costs, they tend to look at the health benefit plan as a commodity. And that’s what should be avoided, as was expressed so well by Jon Fairest, CEO of Sanofi Canada: “Those who view and manage health benefit plans as an investment, rather than a cost, will reap the returns of reduced absenteeism, improved productivity and an engaged workforce that helps drive organizational success.”

Poor understanding of basic insurance principles

In recent years, great efforts have been made to educate plan members about the cash value of their health benefit plans. This is an admirable initiative that has definitely encouraged many plan members to use their plans more responsibly. But now we’re seeing the other side of the coin: some plan members are now so concerned with the cash value of their plans that they sometimes forget that, first and foremost, a health benefit plan is insurance designed to protect against unforeseen expenses. In other words, they focus more on the recurring savings their plans can offer them than on the protection they can provide if something major and unexpected were to happen. The survey even revealed that many plan members, especially those that belong to the Y generation, see their plans as a right, and not as a privilege—which shows how important it is to improve communication with plan members and educate them about basic insurance principles. “The old mission for communications was simply to say what’s covered and what’s not. But now we’re moving to the health side of things and we need to educate employees and make them more involved in decision making in order to restate the value of a health insurance plan,” says Nathalie Laporte, member of the Healthcare Survey Advisory Board and Vice-President of Product Development, Marketing and Strategy, Group and Business Insurance at Desjardins Insurance.

Wellness: Employees want personalized preventive healthcare

In terms of workplace wellness, we’re seeing a significant gap between what plan members expect and what plan sponsors offer. Plan members are increasingly receptive to their workplace doing more to support personal health. Also, the vast majority of them say they would participate in health risk screenings (for cancer, heart disease, diabetes, etc.) if these tests were included in their health benefit plan. But barely a third of plan sponsors surveyed said they were likely to offer this type of initiative. If they want to meet plan members’ needs and have a successful health and wellness program, they’d be well advised to replace general wellness approaches with more targeted interventions. If plan members were more aware of the state of their personal health, chances are they’d be more motivated to take charge of their health and participate in all kinds of health and wellness initiatives.

Plan providers need to play a bigger role

Many insurers have already done a lot to promote wellness by developing educational material and online tools for plan members. But it seems it’s not enough: the survey reveals that 79% of plan sponsors want their insurers to play an even bigger role when it comes to health and wellness initiatives. Which is why it’s important to review existing strategies and work closely together. “Insurers could perhaps do a better job of sharing data to identify the needs and concerns of the employees in order to set up the right wellness program in line with the strategic objectives of the employer,” suggests Nathalie Laporte. The good news is that plan sponsors are becoming more and more open to getting help and advice. It’s a great opportunity for plan providers to stand out and create lasting relationships with their clients.

Want to know more about the Sanofi Canada Healthcare Survey? Visit Sanofi Canada’s website or see the electronic version of the survey here.

1 Conference Board of Canada, Missing in Action: Absenteeism Trends in Canadian Organizations