Sun Life recently released 2 exceptional benchmarking reports for the under 50 and plus 50 employer marketplace. Unfortunately, they did not summarize the results in an Executive Summary, so it is unlikely any plan sponsor will read a 56 page and 72 page report. (What were they thinking). That means this data from over 20,000 benefits plan sponsors, covering more than 5 million Canadians will rarely be discussed.
A colleague in British Columbia, Meghan Vallis, HR & Benefit Leader’s Associate with Apri Insurance Services Inc. has provided some colorful commentary on the 2 major reports, but unfortunately, this too is too long for print.
There are three reports:
- The highlights report https://bit.ly/2wX0v4y
- The 50+ employee report https://bit.ly/2oPU53w
- The under 50 employee report https://bit.ly/2Mdy5Zm
Under 50 (random commentary)
- Paramedical coverage – about half of plans have coinsurance and of those that do, 86% have it set at 80%. 56% of plans have a $500/practitioner maximum
- 96% of plans have a drug card – and they should since it became “mandatory” a few years ago. A drug card is the key to drug claims management. If your plan doesn’t have a drug card, get one. Not having a card is costing your employees money at the pharmacy
- 96% of plans have mandatory generic substitution. Once again, if you don’t have this in place, you are leaving money on the table
- Only 38% of plans have major dental
- Almost all plans have 80% coverage for basic and routine services and 50% for major and orthodontics
- 23% of plans still have a deductible. The most common is $25/$50 and unfortunately reflects a dated plan design that has not kept place with inflation
- The only way to add customization to a small group plan is with a healthcare spending account. Yet only 1% of plans with 10-29 employees have one and 4% of plans with 20-49 employees
- 11% of plans have a dispensing fee cap. A good option at one time, but aside from Costco, very few pharmacy chains are able to offer bargain basement professional dispensing fees
- About half of employees make a paramedical claim with massage being the most common. On average they claim $268 for these services
- 89% of employees makes at least one drug claim and employees claim on average $712 per year
- Chronic condition that are preventable with lifestyle changes are responsible for the highest percentage of claims with blood pressure, diabetes and cholesterol accounting for 25% of claims
- 80% of employees made a dental claim. To the 20% that did not, what are you waiting for, please get your teeth cleaned
- Average dental claimed amount was $700. This means that a $1,000 basic maximum should serve most plan sponsors well. $1,500 maximums are thus unnecessary.
Over 50 (random commentary)
- Large employers mostly ignore basic drug cost management options. This group of employers and employees want choice and flexibility. It’s the number one thing that employees say could significantly improve their plan. However, from experience, when you move from a set plan to a cafeteria style plan, often employees choose the same level of coverage they had before.
- 23% of plans are flex plans. Only 5% of groups with 50-199 employees have a flex plan while 43% of 3,000+ employers have one.
- 25% of plans have an HSA – again with a big split (14% at the smallest level and 61% at the largest). Most employees spend their HSA dollars in contact lenses and glasses
- Taxable spending accounts are gaining traction and 5% of plans offer them. Most claims dollars are used on fitness related services
- Similar to small group, half of plans have coinsurance for paramedicals and 80% coverage is the most popular. Half of plans have a $500 maximum for paramedicals
- Fewer large plans have a drug coinsurance compared to small plans at 61%. 80% is the leading coinsurance level
- Because there are fewer plans with a drug coinsurance, we have a higher number of plans with a drug deductible at 28% Most plans have a drug card, generic substation & prior authorization, but when you get into the 3000+ employee category that number plummets
- The 500+ employee groups have not embraced mandatory generic substitution
- Only 6% of plans have managed formularies. Dispensing fee caps are VERY popular in the 3000+ category. This is likely correlated to their higher coinsurance level.
- On the dental front, apparently 100% of employers offer some level of dental coverage (might be rounding anomaly vs 98.9% etc.) But, significantly more groups offer major dental at 76% and orthodontics at 51% compared to small groups
- Almost all major and orthodontic plans have a coinsurance levels, still at 50%
- 80% coverage is still the preferred copay for basic dental
- The average annual cost of drug claims per covered member was $868, just over $100 more than the under 50 life groups
- The average annual cost of dental claims was also higher by approximately $200 at $970. This is due to more plans offering coverage for major and orthodontics.