Benefits Architect Group, a long-time CHHMA partner and provider of customized group insurance and employee benefit plans, says nearly all of their clients are asking the same question – “How will the COVID–19 pandemic affect our employee benefit plan in the future?”

So here are their 12 trends and predictions for 2021 and beyond

1. COVID–19 is here to stay

All indications point to COVID–19 being a major factor affecting the Group Insurance industry in 2021.  While some of these impacts are unclear, here are some things we are already seeing:

  • Increasing adoption of telehealth and telemedicine services
  • Mental health’s impact on employees and the workplace
  • Changes to benefit plans
  • Potential impact on renewals
  • Work from home arrangements and the growing gig economy
  • We’re starting to see individuals who had a mild infection developing significant neurological and cardiac issues and these “Long Haulers” are becoming additional causes of disability claims with attendant medication and health support

2. Adoption of Telehealth and Telemedicine will continue

The COVID–19 pandemic has lead to an increased development and adoption of Telehealth and Telemedicine services.  There are more than 20 such services currently available in Ontario. Some are funded by the Province, some by insurers and others are available directly to employers with a monthly cost per employee.

3. Canadians’ mental health will continue to be challenged

Canada’s mental health crisis was already a major concern prior to the COVID–19 pandemic. Now, the anxiety and depression caused by the pandemic has increased the crisis.  Trends we’re expecting to see in 2021 that relate directly to mental health include:

  • Rising Long Term Disability (LTD) claims for mental health issues
  • Separation of Paramedical practitioners and plan maximums specifically for Psychologists, Social Workers and Marriage Counsellors to allow employees more access to support
  • An increase in the implementation and use of Employee Assistance Plans (EAP’s)
  • A struggle to maintain work- life balance due to working at home arrangements potentially leading to increased feelings of isolation, overwork, anxiety and depression
  • An increase in the usage of anti-anxiety and anti-depression drugs to combat mental health issues

4. COVID–19 will affect renewals

Each insurer is approaching renewal for 2021 differently.  These approaches are difficult to predict and we anticipate that we will have to aggressively negotiate on all of our renewals.

Insurers are projecting a 9% to 10% increase on Long Term Disability for the drop in interest rates alone. In March of 2020, the Bank of Canada rate dropped from 1.75% to 0.25% in three rates cuts in response to the economic pressures of the pandemic.

When an employee is approved for an LTD claim, the insurer is required to set up a reserve for that employee and the reserve is based on the morbidity tables for the anticipated length of disability and this is then discounted by the current interest rate. As interest rates decrease, the required reserve increases, and this is then reflected in higher LTD rates.

Benefits Canada reported that by the end of August 2020, drugs for anxiety and depression had reached 97% of the level for all of 2019.

5. Increased claims due to the use of Personal Protective Equipment (PPE’s)

The potential for increased costs due to PPE charges, especially for Dental and Paramedical claims, is high. Most Dental Associations have provided their members with Fee Codes to charge this as a specific item. 

There will probably be a significant jump in the Annual Fee Guide for the 2021 year put out in January for the various provincial Dental Associations.

6. Working from home and the gig economy will become the norm

There will be many considerations for employers in how they approach this transition such as:

  • How will they maintain a corporate culture remotely?
  • Will benefit offerings need to change to reflect the new work state?
  • Should they invest in mental health resources?
  • Can they safely bring employees back to work?

Many employers are asking,” Is work from home here to stay?” and so far, the answer has been a resounding “Yes”. We expect to see more workplaces adopt optional permanent work from home policies and for employers to begin tapping in to the talent pool made available by the gig economy.

7. Longer Healthcare wait times will continue to be an issue

Healthcare wait times in Canada were already an issue prior to the COVID–19 pandemic. During the early stages of the pandemic, hospitals were at a reduced capacity and prioritizing coronavirus patients. Because of this, thousands of elective surgeries were cancelled.

Now, as a vaccine seems in sight for early 2021, the backlog of procedures will only increase wait times for 2021.

8. Insurers will bring more diversity and inclusivity to benefits

Today’s multigenerational workforce is the most diverse that it has ever been with 5 different generations in the workforce, all with different wants and needs. 

When it comes to employee benefits, supporting an environment of diversity and inclusion is key to a successful plan. 

Key elements to consider are:

  • Providing choice and flexibility in benefits – like a Health Spending Account
  • Providing or expanding an Employee Assistance Plan
  • Communicating to diverse audiences – using a different medium for a different demographic

9. Defined Contribution plans will rise in popularity

With more and more employees working from home, traditional plan designs will be challenged by a desire for greater flexibility from both plan members and employers.

The increased adoption of defined contribution plans such as Health Care Spending Accounts is on the horizon.

Because these options have defined limits, employees can reduce increases in future premiums.

10. Biosimilars will continue to become mandated by the Provinces

Biologic drugs are strong medications with components such as sugars, proteins, DNA and from living sources – mammals, birds, insects, plants and even bacteria.

Because biologics come from such diverse sources, they are generally much more complicated than other drugs, taking a lot more work to process and produce.

Biologics are expensive – really expensive! These are the drugs that are in the $20K to $30K range per year.

A biosimilar enters the market after the exclusive patent on a biologic drug expires.

Biosimilars are highly similar to the original approved biologic drug both in chemical composition and structure but is not identical. They do achieve the same outcome as the original biologic drug. To be approved by Health Canada, they must demonstrate the same or similar results to the original biologic drug.

Biosimilar cost savings on the 4 most expensive biologic drugs range from 15% to 47%.

Alberta and British Columbia have mandated the use of biosimilars under their provincial plans.

11. Cybersecurity and data storage will change

Online scams are increasing and with employees working remotely, new procedures and processes will need to be implemented to increase security.

Many companies are looking at a future that does not have a traditional workspace and will need to have somewhere to store all of their data.

12. Renewed focus on renewing and updating benefit plans

We expect to see 2021 bring a renewed focus on analysing and reviewing benefit plans and a continuation of updates to existing plan designs as workplaces aim not only to accommodate work from home but increasing mental health claims, drug uptake, paramedicals and more. 

We have seen increased LTD claims, drugs for anxiety and depression and claims for paramedicals increase.

We expect to aggressively negotiate these changes to plans to provide sustainable plan design and pricing for our clients.

For additional information, please contact:

Nigel Ottley, Consultant
Benefits Architect Group
22 Nesbitt Drive, Toronto, Ontario M4W 2G3
Phone: (416) 934-1660
Cell: (647) 228-6556
Email: nigel@benefitsarchitect.ca