Employee Benefit Plan Premium Relief – Coming as early as May

Yesterday, Sun Life was the first Insurer to announce that because of plan members inability to access Dental claims given COVID-19 mandated shutdowns of dental practices (and a subsequent move to emergency only services) that they were refunding their (non-refund/non self-funded) dental plans with a 50% premium credit retroactive to April.  This billing premium credit will appear on the June 2020 invoices.  Additionally, they are offering a 20% credit to the major medical component of the extended health care premium. This will apply to the non drug, non hospital, portions of the benefits plan.

Last night, Canada Life came out with their own version of COVID-19 premium relief, also retroactive to April 2020. This adjustment will be on Plan Sponsors May 2020 invoices however. The premium reduction on dental will mirror that of Sun Life’s 50%, but they specify a 20% reduction to Vision Care and 8% premium reduction on manual/paper reimbursement plans (a good excuse to look at pay direct drug (PDD)). On PDD programs a 20% healthcare premium reduction is offered; matching the Sun Life offer.

It is unclear at this point, whether this is a CLHIA (industry association) initiative. If it is, we would expect ALL Canadian Insurers to eventually fall in line. If not, we still would expect the majority of Insurers to “eventually” do something similar as that would be political suicide and could be seen as gouging vulnerable plan sponsors.  For the early adopters (Sun and Canada Life) mailings to clients will be sent out early next week.

It is important to note for our larger ASO (Administrative Services Only) or Self Funded clients that these reductions in claims have already been registered in their plans and so they have already reaped the benefit of the lower claims costs.  In actuality, these claim reductions for both dental and paramedical practitioners, began mid March and likely reduced dental claims that month alone by 40%.  In April, given the limitation of Emergency Only Dental plans, we suspect some clients might see up to a 75% reduction in average dental claims. The 50% reduction offered by the Insurers is thus likely conservative.  Similarly, we think that Paramedical claims could have reduced in half starting in April; although Practitioners fighting for the survival of their businesses and livelihood will likely be creative and persistent as they encourage the uptake of “virtual visits”.  With ASO plans of course, there is full accountability for claims and we will be available to discuss and review your specific results and details when the reporting is made available.

Until then, please be safe.  We are in this together.

2020-04-18T11:12:44+00:00