As discussed with John Dujay from the HR Reporter on his recent article “How will the Liberal-NDP pack affect the benefit landscape”, when major stakeholders have yet to be consulted, these Federal Government propositions bring with them more questions than answers.
Like the weather, the debate over national health care has been a topic of conversation for decades in Canada. While for some, it is high time for action, for others, it may be viewed as industry intrusion. Perhaps the government stepping in where it shouldn’t go. But, in my opinion, I think we will land, as we typically do, somewhere in the middle.
In these early days, questions mount at the expectation of having something perhaps “steam-rolled” out without involving the necessary stakeholders. What may look great on paper, may not operate as such in reality. It boggles the imagination to consider the bureaucracy.
In our recent episode of SHifT we engaged with professionals from various provinces to broaden this perspective. For the PharmaCare debate, Phil Tyson, from Global Benefit Advisors, pointed out may we be better served from an employer, employee, and citizen standpoint if this program picked up the high cost drugs like Biologics, rather than making it their intention of “recommending an initial list of commonly prescribed drugs”?
It’s not typically the commonly, low-costing drugs that negatively impact a benefit plan. It is the exceptional growth of pharmacy costs year over year. An Innovative Medicines Canada study suggests the annual growth rate of these cost to be 5.3% year over year to employers with coverage. 68% of this is said to be increased demand, aligned with Chronic Diseases.
Provincial coverage
Many provinces already have programs in place to take care of the needs of those without an employer program. How will the new proposal integrate? Will there be duplication? Will these provincial programs cease? Not to mention, who will foot the bill.
Is there an opportunity here for those who practice in the benefit insurance lines to be advocates of a well-designed government program to integrate with private plans?
Employer Advantage
Consider the advantage we, the benefit consultants, could bring to corporations to creatively design a package for employees which amalgamates seamlessly with the proposed government offering. Perhaps if organizations didn’t have to worry about the negative impact to rates on having high-costing pharmaceuticals included for coverage, they could concentrate more on building the program to align with actual needs, attraction, and retention of top talent. Imagine having a program where those high costs could be excluded and instead build an intentional plan complete with health spending account and personal spending account options?
Inflation on the rise
Business owners need to save money where they can. This CAN provide that option—which is a good thing—but not if we are trading the tax-advantage for an additional tax grab. Without proper dialogue, this may cost the very Canadians who are struggling now, for whom this is intended to protect, more through lack of access to both employer and provincial plans.
It is estimated that some 13.5 million people in this country currently enjoy health and dental benefits tax-free via their employer group benefit package. What will the loss of that coverage mean to them? How will it impact their end of year income?
If employers DO decide to throw in the towel and not offer any coverage, this could severally inflate the expectations of costs for federal plan. And it can’t be expected, from an outsiders point of view, that the government programs will pick up the lesser, more common costs and leave all of the high costing pharmacy and dental services to corporations.
Plan design
Like any benefit package, the plan design of this national program will be key. A necessary element will include collaboration of minds from within the insurance industry, pharmacy and dental associations, the health and dental care providers, and ultimately the corporations because they are all cogs in this massive, proposed wheel.
In any way we look at this conversation, the cost will always come back to the consumer in one or another—via premiums or taxes. More dialogue required.
We’d be pleased to engage further on this topic. Give us a call.
Disclaimer: Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and employment, taxation, legal vary accordingly. Please seek legal, accounting and human resources counsel from qualified professionals to make certain your legal/accounting/compliance interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.
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Disclaimer: Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and employment, taxation, legal vary accordingly. Please seek legal, accounting and human resources counsel from qualified professionals to make certain your legal/accounting/compliance interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.
