The benefits adviser (an endangered species) per HR Tech


Twenty-five years after graduating university, I can reflect on numerous client interactions as an Analyst, Group Representative, and later as an Independent Adviser. Employment does not equate to competence, so whether I add any more value to the client relationship, more so than my counterpart at another benefits firm can only be answered by my clients.

Judging by similar locks of grey I see at seminars and functions, my experiences in the benefits industry is not unique. Over the years, some of the more aggressive competitors have acted like ‘crabs’ to pull down advisers in their quest to gain a competitive advantage, but in the last couple of years it has not been those firms but rather so called, HR technology firms who are looking to take down the advisory profession.

Listen, I get it. The benefits industry was ripe for change. For decades, advancement in technology meant coming up with a smart phone app. Going paperless even has been a 10 year long project. So while terms like “on-boarding” is used by US companies with sophisticated systems, the benefits industry in Canada, continues to rely on paper enrollment and refuses to create meaningful interfaces between Insurers and Payroll Providers. If it ain’t broke, don’t fix it, and certainly don’t invest in the infrastructure to fix it.

In the interim, Insurers continue to pocket millions in administrative savings from the use of online administration systems that made hundreds of back office administrators, previously responsible for supporting member changes etc. redundant. With plan sponsors responsible for additions, terminations and other changes, accuracy goes up and calls to the Insurer goes down. Yet, most Canadian Insurers have failed to invest in technology or infrastructure so as to be a leader in Insurtech.

So, the Industry was ripe for change and we can thank Zenefits and other HR based platforms for bringing innovation to the marketplace. Increasingly, smart software engineers with the right amount of seed capital or funding are attempting to turn this industry on its head and it is working.

Insurers who chose not to invest in technology over the last 20 years, through their investment subsidiaries are now heavily investing in these HR tech companies in an effort to remain relevant. Companies such as Power Corporation, Sun Life and RBC have secured cozy relationships with these companies to hedge their bets on a digital transformation that they dare not miss. Their previous complacency has left them vulnerable and rather than innovate, at this point they can only provide the backing to more nimbler startups.

As an advisor who has been witness to the ‘glacial’ pace of technological advancement in the benefits industry, I too perhaps am culpable. Perhaps this gives license to the ‘culling of the heard’ mandated by almost all HR Tech firms who seem to see my involvement in the benefits equation as an impediment to the operation of their business and perhaps more important, a lucrative IPO to monetize granted stock options.

Recently, I read a US publication where an advisers message to the small business market she serviced was this, “we are actual insurance advisers, and not a software company with an insurance license. You’re going to get the expertise, access to the market, and the personal touch because we understand your space”. This adviser later went on to say that all of the bells and whistles technology that is available by way of technology firms, are also solutions that her team is quite capable of bringing to the table. This message resonated with me and I think it is worth noting.

When did advisers become the hunted. That was the question I asked myself after watching a video from one of the more well know technology companies. The video was intended to provide their prospects with information on ‘evaluating one’s broker’. (I actually prefer the term adviser, but if broker conjures up the image of bloated indifference then I guess that is fine). Months earlier, before a ‘pivot’ by that same firm, they had thought the broker/adviser channel was infact a market that they wanted to pursue but I suspect this strategy was abandoned after push back from the advisory community who on mass refused to support unrealistic growth targets that if not met resulted in contract termination and a loss of all future revenue from the client the advisory previously brought in. Whatever the case, this firm is now squarely focused on the B2B market.

I am not entirely sure, going alone is the right long term move for that technology company, because after listening to the initial adviser roadshow, I recalled thinking, wow this is fantastic technology, but these folks can hardly spell Group Insurance, how are they going to consult clients on how to manage their compensation budgets?

Whose vision of the customer will ultimately triumph is above my pay grade. If the experiences of fin-tech is any guide, even large robo advisers have had to employ numerous ‘humans’ with ‘real life experiences’ to provide millennials and others with investing advice. Technology was an asset but not the full solution; so far.

Algorithms can no doubt scan textbooks, review legal judgments, perform low level AI functions, but to say they can replace a professional’s knowledge and know-how, I believe is a stretch right now in 2017. Technology is just another resource to help professionals more proficiently manage their client relationships.

In an advisory practice it is difficult enough to understand the various tax codes and human rights decisions and legislation in context of changing attitudes and HR trends. But it’s the interplay of these various structures on employee benefits that make our job unique. To suggest that a technology application can more effectively provide meaningful guidance to a plan sponsor; well, I am not convinced. Clearly, if an adviser is adding zero value and is a dinosaur that barely does enough continuing education (rather than 4 times the required) then yes, that adviser is ripe for ‘replacement or culling’.

Speaking of ripe, the industry is ripe for a shakeup. Insurers have to do a much better job of investing in meaningful technology to provide customers with a paperless, electronic experience, that quite frankly is overdue. A move by CLHIA and perhaps government to stimulate the use and acceptance of electronic signatures would be the catalyst of much needed innovation and would spell the end of paper enrollment forms for beneficiary designations.

To those technology firms, specifically HR tech, that are giving away free vacation scheduling, on-boarding and HR platforms to clients in the hopes that they will ‘fire their brokers’, I get your message, but I don’t see why my 25 years in the business is suddenly worth nothing because your version of “HAL 9000” says so.

On a recent trip to Vegas, I had the opportunity to use an AK47 assault rifle, but on a range and under the competent watch of a trained instructor. I quickly realized that putting a loaded gun into the hands of someone not trained could easily have deleterious and unintended consequences. Just as Google remains a great place to obtain medical reference, much of the information is biased and is not vetted. So, using this information to self-diagnose and self-medicate is probably a bad idea.

HR platforms relying on code and software engineers to navigate the minefield of labor management, employment equity and changing legislation is to me, that same AK47.

Not all my clients see the value in covering pet food and unlimited wellness as a perk for which the employer must provide funding. To suggest that after massages, paramedical, and dental expenses that an employee has the ability to fund a specialty medication with limited out of pocket “pain” is a stretch for me. For an invincible generation of millennial type employees who have just entered the workforce and have not been witness to sickness up close, they will certainly have a particular view of what is relevant to them and that is OK. My job is not to argue with that view but to support the plan sponsor in making sure that the benefits program is congruent with the philosophical views of the company who is paying the bills. If taxable wellness accounts is a priority to that plan sponsor, then it will be part of the solution we put in place.

Alas, not all technology firms mandate a replacement of the advisory channel, some notable firms in particular (one in Calgary Alberta and another in Vaughan Ontario), continue to see the value in advisors as a part of their service delivery model. For the sake of the industry, I hope those two firms have made the right bet.

To their credit, Zenefits and the like have forced advisers and perhaps Insurers to review processes that quite frankly had become stale and to advance the consumer notion. “Customer experience” which is itself a buzzword today had always taken a back seat but because of these new market entrants (so called disruptors) customer experience is squarely in focus. If nothing else disruption or disruptors can take credit for forcing the advisory business to review and update processes that are outdated. As for me the, Independent Adviser, my message to HR Tech, I am not the prey! If you look closely, beyond the IPO and stock option, you will notice that I am wearing the same neon orange vest as you. Maybe if we work together, we can spend less time hunting and more time feasting.

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2016 DRUG TRENDS AT A GLANCE (Express Scripts Report)


In 2016, Express Scripts Canada’s analysis of private-plan spending trends once again reflected opposing cost forces.  Factors driving an increase in drug spend have outweighed downward pressure on drug costs. At the same time, high-cost drugs and high-cost patients continued to create troubling trend acceleration.

These new medicines offer high cure rates for formerly incurable diseases, transform previously fatal diseases into chronic conditions, and provide a much greater quality of life for many Canadians. But the often staggering costs of these drugs have created unmanageable financial burdens for families and plan sponsors. More and more patients are finding they can’t afford the medications their doctors prescribe them. More plan sponsors are limiting employee access to treatment coverage in an attempt to protect plan sustainability without understanding that they have better options.

Parallel to these developments is the ageing of Canada’s population and the related increase in chronic diseases. Of greatest concern to private plan sponsors is the rising number of working-age individuals with multiple chronic conditions that require numerous treatments often prescribed by many doctors and specialists without care coordination.

The combined result of these factors is treatment complexity that, without effective intervention, overwhelms plan members and potentially leads to worsening health and more expensive therapies. These members need expert guidance at key decision points. Sponsors need to implement effective plan management solutions now, before cost increases become insurmountable.

Over the last three years, these forces—extremely high-cost drugs and the rising number of plan members with multiple chronic conditions—have garnered increasing public attention. For plan sponsors, however, the perception of urgency has been lessened by the corresponding effect of generic pricing.

We are now at a crossroads -the cost impact of patent expiries is slowing, while that of high-cost drugs and patients with multiple chronic conditions continues to accelerate.


Astonishingly, just 14% of plan members account for 72% of total plan spending.

In 2011, members with annual claims of more than $10,000 represented 18.1% of total spending; by 2016, that number had increased by 60%, up to 28.8%.

The evidence shows that individuals with total annual claims between $1,000 and $10,000, and those whose annual claims are over $10,000, need help:

  • Making treatment decisions;
  • Managing their multiple chronic conditions (an average of 5.9 and 7.3 respectively);
  • Coordinating care, provided by an average of 3.4 and 4.5 physicians respectively;
  • Managing their many medications, an average of 8.3 and 10.5 respectively.

Innovative solutions are required to help these members make better decisions to manage their overall costs and health.

In this rapidly changing environment, most Canadians simply do not have the clinical knowledge they need to determine which drug is the most cost-effective, clinically appropriate option for their treatment. The difference between the best decision and a sub-optimal decision can be tens of thousands of dollars. Express Scripts Canada’s research shows that optimizing spending on traditional maintenance drugs through pharmacy services that engage patients and influence better decisions can help fund access to new high-cost drugs.

Spending on high-cost specialty drugs (those used to treat complex, chronic conditions such as severe rheumatoid arthritis, hepatitis C and cancer) has grown from 13% of total drug spending in 2007 to 30% in 2016.

Tighter plan management and the successful completion of treatment for many hepatitis C Canadian patients moderated the specialty trend to 3.2% in 2016, a welcome respite after years of double-digit increases.

Excluding hepatitis C medications, however, the specialty category trend was 10.7% in 2016.

One out of every five dollars spent on prescription drugs in 2016 paid for medication for diabetes or an inflammatory condition.

Trend on inflammatory conditions was 11.7% primarily due to an increase in utilization including expanding indications for high-cost, anti-inflammatory medications.

The uptake of newer, more expensive diabetes drugs contributed to a trend of 13.7% in this category. But our analysis also shows that an alarming number of patients were not treated in accordance with the Canadian Diabetes Association’s Clinical Practice Guidelines, an example of an opportunity to potentially improve care while lowering
costs with tighter plan management.

There was also double-digit trend growth on cancer and attention-deficit hyperactivity disorder medications during 2016.

Biosimilars—drugs that provide alternatives to high-cost biologics that have reached patent expiration—are entering the market, but the associated cost savings is not comparable to that of generic drugs.

Cancer treatments dominate the drug development pipeline, and a continued shift from hospital-administered drugs (covered by public plans) to self-administered drugs is expected to mean more claims and higher costs in the future.


Given the number of challenges each plan member is currently facing, lightly managed plans—those that only react to claims—cannot control rising spending or help members achieve better health. But by focusing their plan management efforts on empowering these members to make more effective, informed decisions, sponsors can protect the long-term
sustainability of their drug benefit while supporting better health outcomes for employees and their families.

Tightly managed plans align drug utilization with clinical guidelines, empower members at critical decision points and provide comprehensive care to members with multiple chronic conditions. These plans leverage clinical expertise and data analytics. In addition, they incorporate synergistic management techniques, including formulary, utilization and clinical management tools to provide the best possible patient care at the lowest possible cost.


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Jan. 2017 Employment Insurance (EI) Changes

Earlier this year, the federal government unveiled a number of changes to Canada’s Employment Insurance (EI) program in its initial budget, including a shorter waiting period for EI benefits. The proposal was adopted in June 2016 and will go into effect on January 1, 2017.
Benefits are currently paid for 17 weeks, including a two-week waiting period. Starting January 1, 2017, the total benefit payment period will be 16 weeks — a one-week waiting period and 15 weeks of payments.
The federal government has published a draft regulation to change the EI Regulations’ provisions on the EI Premium Reduction Program (PRP) and the Supplemental Unemployment Benefit Program (SUB program).

If you have a LTD plan but no STD plan, a reduction in the LTD waiting period will help avoid a gap in coverage. Here’s what would happen if you do not amend your plan:

  • Week one (no EI benefits)
  • Week two to 15 (EI benefit period)
  • Week 16 (no EI or LTD benefits)

Next steps
The government has prepared a communications plan and intends to contact all plan sponsors that participate in the PRP or that have set up an eligible SUB plan to provide them with details about the legislative changes and the transition period.
Plan sponsors that participate in the PRP will have to assess the terms and conditions of their plans and determine whether they have to make changes to some of them to ensure their plan continues to meet the programs’ requirements.
The government has also prepared a strategic communications plan to inform the public about the changes to the EI Act and Regulations.


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Innovations In Disability Coverage Beyond 65

The national average retirement age is pegged at 62, but recent trends in labour force estimates reflect a growing shift to delayed retirement. This tide is not enough to dramatically lift the average, but clearly this trend is visible in certain white and grey sectors of the workforce. At the same time, employment rates for Canadians age 55 and over continue to rise sharply. All of this point to longer working careers.

A recent Sun Life poll (the Canadian Un-retirement Index) concluded that in 2008, 51 per cent of respondents had expected to be retired at age 66. In 2012, that number dropped to just 27 per cent. Clearly, there is a real disconnect between actual and expected retirement ages; suggesting that in recent years, workers have shifted their thinking on retirement and perhaps intend to stay in the labour force longer than at any other point in history.

Although the Liberal government in Canada has now rescinded the previous Conservative government’s decision to raise eligibility for Old Age Security benefits from age 65 to 67, over six years, commencing April 2023, it is interesting to note that other industrialized nations such as France, Germany, Denmark, Belgium, the U.S and the U.K. have or are in the process of increasing the qualification age to 67 and ultimately age 68 in the case of the U.K.

Combine this with the end to mandatory retirement in provinces such as Ontario and one would presume that workers (especially those in white collar professions) will undoubtedly remain in the workforce longer.

Insurers and plan sponsors have slowly responded to this trend to delayed retirement with more liberal termination ages for health and dental benefits by extending termination ages to 70 and 75 upon request. However, this liberalization has not extended to disability coverage beyond age 65. In fact, except in the case of pricier individual special risk disability offerings from firms such as Hunter-McCorquodale, disability coverage beyond age 65 is rare.

Plan sponsors seeking to retain the strong leadership skills, and experience of an aging cohort in a market where millennials dominate (45 per cent of the workforce), have simply had to face the reality that long-term disability (LTD) for workers beyond age 65 is elusive.

Insurers and plan sponsors have not faced a backlash from these same plan sponsors because of rulings such as that from the Ontario Human Rights Tribunal in Kartna v. Toronto (City), [2014] OHRTD No. 387 which confirmed that the termination of LTD benefits for workers beyond age 65 does not infringe the Ontario Human Rights Code. In that case, the ruling from the tribunal upheld prior case law that established in Section 25(2.1) of the Human Rights Code that the right to equal treatment was not infringed by a group insurance plan that complies with the Employment Standards Act. Thus, differential treatment on the basis of age with respect to group insurance is permitted, if the person is age 65 or older. (It should be noted that differential treatment is not allowed for persons between ages 18 and 65.)

Extended disability options

Fortunately, relief is on its way as market re-entrants CIGNA Life and RBC (both had previously reduced their activity in the Canadian group marketplace) have taken the lead in responding to this shift in labour trends and have created disability solutions for workers beyond age 65. In the case of CIGNA Life, their program for groups of 35+ offers LTD with no termination age, as long as an employee is actively at work. Conceivably, an employee who is age 80 could be eligible for disability. The benefit duration is limited of course, based on the age of the claimant at the time of disability, but this product at least provides coverage in a market where no options existed previously.

RBC has also introduced LTD coverage for persons over age 65. This product is available to groups with more than 36 insured lives. Unlike CIGNA Life that does not have a termination age, the RBC product will have a fixed termination age of age 70. Its plan will feature a two-year, five-year and a graded benefit to age 70. Up to age 60, the traditional plan features and provisions will apply. However, at age 60 in the case of the five-year benefit, the maximum benefit duration will be just five years. After age 65, the maximum benefit period would be to age 70.

The RBC “graded design” has one-year age increments above the floor of age 60 and features various benefit durations depending on the onset age of disability, (per the accompanying table).

RBC Graded benefit to age 70

Age of disability Benefit duration
Less than 60 years To age 65
60 years 60 months
61years 48 months
62years 42 months
63years 36 months
64 years 30 months
65 years 24 months
66 years 21 months
67 years 18 months
68 years 15 months
69 years 12 months

This piece is not intended as an endorsement of either the RBC or CIGNA offering, rather it is meant to illustrate the options that are available for a cohort which is still recovering from the ‘financial crisis’, in many cases still has mortgage and consumer debt and faces an uncertain eligibility for government retirement programs.

At this point, it is unclear whether other Insurers will wade into the specialty market for extended disability coverage, but based on demographic trends, there certainly will be growing opportunities for those Insurers that embrace the risk.

Chris Pryce (CEBS) is managing director of Human Capital Benefits and services the medium-large case benefits marketplace.


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Dealing with Biosimilars

From time to time, Insurers can do a particularly good job of communicating a particular strategy or educating plan sponsors on a particular topic.  This month (April 2016) Green Shield Canada came out with a very good document outlining their position and possibly that of their competitors with respect to the treatment of “generic” or more appropriately biosimilars or subsequent entry biologics.  Please read on….

Introducing Green Shield Canada’s (GSC’s) Subsequent-Entry Biologic Policy

Subsequent-entry biologic drugs (or SEBs or biosimilars) are a hot topic in benefits circles as both plan sponsors and benefits providers consider the appropriate role they will play in the treatment process. At GSC we see SEBs playing a valuable role in our drug plans and have already developed a new SEB policy to guide our future decisions regarding these drugs. But, before explaining our policy, first we need to explain what SEBs are all about.

So… what’s a biologic?

Biologic drugs are currently one of the fastest growing areas in pharmaceutical development. These types of drugs provide treatment options for serious or rare illnesses where no effective treatments were previously available, such as cancer, rheumatoid arthritis, and multiple sclerosis. Increasingly, however, biologic drugs are also coming to market for many chronic diseases such as high cholesterol and asthma. Familiar drugs like vaccines and insulin are, in fact, also biologics. Here’s how biologics differ from traditional drugs.

Traditional drugs Biologic drugs
Produced through combining chemical ingredients Produced using living microorganisms (e.g., bacteria)
Smaller, less complex molecules Large, complicated molecules
Differences in manufacturing processes are unlikely to affect finished product Even small changes in manufacturing process can affect the nature of the finished product and the way it works in the body

While biologics are generally very effective in treating an increasing number of illnesses, they can be extremely expensive compared to traditional drugs.

So then, what’s an SEB? An SEB is a biologic product that is similar to an approved originator (or innovator) biologic product. Like all biologics, SEBs are complicated to develop and manufacture, and even small differences in production can make a difference in the way they work. Therefore, while they are similar to traditional generic drugs in that they are produced after the patent of the original biologic drug expires, they can’t technically be thought of as “generic biologics.” Unlike true generics, which are considered “bioequivalent” and therefore interchangeable with the brand-name drug, SEBs are not automatically interchangeable, and any new SEB that comes along is treated like a new drug.

GSC’s Subsequent Entry Biologics Policy

In developing our SEB policy, GSC undertook a comprehensive review and analysis of published information and evidence about the safety and efficacy of these drugs. In addition, information from European jurisdictions, many of which have had extensive real-world experience with the use of SEBs, was instrumental in crafting GSC’s SEB policy.

After considering this evidence as well the implications, and alternatives for covering SEBs, GSC has developed a unique approach: we are the first benefits provider to list SEBs as preferred products under our formularies. This means the originator products will be covered only in exceptional circumstances.

By not entering into any pricing agreements for originator biologics, GSC is able to leverage the cost savings available with SEBs while ensuring plan members have access to the biologic drugs they need.

For example, Inflectra™ is the SEB for Remicade® (the originator biologic) – the drug with the highest volume of costs for GSC-administered health plans. We have listed Inflectra as the preferred product to treat rheumatoid arthritis, psoriatic arthritis, psoriasis, and ankylosing spondylitis. And recently we learned that we’re not the only ones to see the advantages of this approach. The provincial drug plans in Ontario, British Columbia, Alberta, and Yukon have also listed Inflectra as the first-line treatment for patients covered under a provincial drug plan. It is expected that remaining provincial governments will follow in the next few months.

In addition to listing Inflectra, GSC will be applying this same strategy to the other SEBs listed below, and when available later this year, we will include the SEBs for Enbrel and potentially Humira – the second and third highest cost-volume drugs at GSC – under our strategy.


A number of biologics will come off patent in the near future, so we expect to see more SEBs become available. With our new SEB policy, GSC is ideally positioned to take advantage of the current cost savings, future market forces, and competition that will continue to drive down the prices of SEBs, while at the same time ensuring plan members receive the most appropriate biologic drug for their condition.

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