Thursday, April 11, 2013

What Should the Plan Sponsor Think About Industry Drug Pooling?

Not that long ago, I was in Cambridge, Ontario discussing the topic of “Industry Pooling” for catastrophic (exceptionally high) drug claims.  I did so as a presenter at a March 26 Connex Breakfast Session on the topic of “Catastrophic Coverage: An Ongoing Industry Challenge Explored.”   My role on the day’s agenda was to discuss the potential impact of our industry’s new pooling arrangement on plan sponsors.

I shared my thoughts with the audience that day; now let me share this with you – Pal’s clients and friends.  But first, a little background:

Background on Industry Drug Pooling


For a couple of years, we heard talk of the creation of an industry health care pooling arrangement to help mitigate the cost impact of catastrophic drug claims on drug programs.  Indeed, close to a year ago, Canadian Life & Health Insurance Association (CLHIA) announced the first details of such an arrangement. We reviewed that announcement in our April 2012 issue of The Advisor here.

The basis for this initiative was rooted in the belief that the problem of rising costs due to increased use of expensive specialty drugs was only going to get worse.  CLHIA’s member insurance companies developed a health pooling arrangement at the industry level to help ensure the sustainability of drug programs.

Why the concern about sustainability?  The following provides a little insight into the current drug landscape; with a little imagination, consider what might happen to future costs if left unchecked.

  • The number of drug claims exceeding $25,000 ­per individual, per year increases every year.
  • More and more, high cost medications are being prescribed for the long-term; they are no longer typically prescribed for just rare or acute treatments.
  • The use of new, expensive biologic drugs is increasing.  Biologics are very effective; they are also very costly due to an expensive manufacturing process.

What this means for the plan sponsor – both today and in the future:


Today


On a practical level, today, what does this mean for the plan sponsor?  The reality is that, even though there has been positive press on this arrangement, the direct impact on most plan sponsors will be minimal.  This is because it is a carrier’s internal pooling level that more directly affects a plan sponsor’s annual financial renewal rating.  Typically, internal pooling levels are at $10,000 or $15,000 for small and medium sized businesses and, in most cases, encompass other health claims (such as for hospital and costly medical equipment) in addition to drugs.  This is the level of protection that is most important to plan sponsors.

Assuming this does not change, and in most cases it won’t, it remains business as usual for most sponsors.


Tomorrow


As the industry pooling arrangement continues its rollout, some carriers (not all) are re-evaluating their current internal pooling.  One of the issues under the insurers’ consideration is whether or not certain circumstances preclude them from offering any pooling coverage at all. 

If this becomes a reality, some plan sponsors would be without any risk management tool for their health benefit and this concerns me.

Carriers continue to consider their options and I anticipate we will learn more about this topic in the coming months. 

Stay tuned for my “Pooling: Part II” blog!

Tuesday, January 29, 2013

Ask before you offer disability coverage to foreign contract workers


I’m currently tracking two human resource trends that will likely remain strong in 2013 and beyond and which are generating questions in the benefits world.  They are: (1) Increased global hiring and (2) increased outsourcing.

The impact of these developments – and they have been noted on a number of human resource trend prediction lists for 2013 – is that we are fielding more questions about providing disability coverage to contract workers who come into Canada on a temporary work visa.  Providing health coverage for these individuals is relatively straightforward; providing disability coverage is a little more involved and employers should ascertain the insurer’s coverage criteria for foreign workers before offering this benefit.  Be aware that some carriers don’t offer disability insurance at all to foreign contract workers; others do but usually with some restrictions and limitations.

For insurers that do offer disability coverage to foreign contract workers, some of the following boundaries might apply:

  • Coverage limited to duration of the work visa with maximum time frames imposed
  • Insurer must be notified when the individual’s employment status changes from contract worker to permanent resident
  • In the event of a disability payment, insurers may have varying rules as to when payments cease, for example, two years after the date of disability.
  • There may be allowances for work permit extensions.
  • Foreign contract workers must be listed during annual renewal census reviews.
  • Coverage ceases upon leaving Canada.

In short, as Canadian hiring practices continue to tap into foreign talent and more non-Canadians enter the workforce on foreign worker visas, make sure you investigate your disability insurance details before making any promises to prospective candidates.  You want to make sure you have the appropriate coverage in place.  

Judy Buckley
V.P. Consulting

Tuesday, June 26, 2012

HR’s Next Generation: Observations from Teaching Compensation

I finally got the chance to return to school – not as a student, but as an instructor of two compensation courses: one at Seneca College and the other at the University of Toronto. The students at Seneca are early in their career, pursuing their HR or payroll designation while the students at U of T are graduate students completing their Masters in Industrial Relations and Human Resources.

After just over a year of teaching, I realize I’m learning as much as they are. The first thing I learned is that, despite my expertise in compensation, my knowledge of the tricks of trade, and my many “been there, done that” stories did not necessarily mean I know how to teach. My wife, a grade 4 school teacher, could have told me that, but, of course, I had to learn the hard way.  I ask for a sincere apology from my first set of students, the poor guinea pigs.

But I do have some interesting observations about the upcoming generation of HR professionals.  I also learned of few of my own lessons and I share them with you here.
  • Students continue to struggle with the ongoing disconnect between theory and practice.  Perhaps its just part of a teacher’s experience in educating, but I find the disconnect between academia and actual business application to be a little concerning.   In the real world of business, certain behaviours regularly take place side-by-side with the actual practice of the business.  These include the need to prioritize actions based on business needs and objectives, available resources, and, of course, budget.   It also includes certain subtleties such as sensitivity to internal or external politics.  Unfortunately, I found too many students unfamiliar with how to integrate that awareness into their practices; they were not necessarily sensitized, during their earlier academic training, on how to determine where to focus their energies.  I’ve come to understand that I need to help them grasp the practicalities and realities of a real-life human resources professional.
  • I became a better communicator.  I had to learn to communicate better in order to teach the mysteries of compensation, pay equity, incentive plan design, market analysis and related areas.  The benefit to me is that I find myself to be a better communicator with my own clients and am more sensitive to ensuring work nuances and project outcomes are clearly understood.
  • People rise to the occasion.  They may have gone kicking and screaming the whole way, but when challenged, my students rose to the occasion and did a great job.  Often, diploma content is focused on learning and remembering material as opposed to developing independent and critical thinking, but my students enjoyed the challenge of the latter.  They valued the “ah-ha” moments that occurred when they rose above the basics of the matter and achieved some real learning through their own mental processes. They were not used to it, but did so when asked.
  • Self confidence required in business.  Finally, I realized that one of the most important lessons to teach students (and it was the one that was least present before) was self confidence, specifically, the confidence to defend one’s position, speak in front of the class, and challenge another’s point of view. Being spoon-fed or told one is always right does not prepare a future professional to confidently respond to a challenge and defend one’s position. I found that just as important as the actual topic is the need to give students confidence to move forward in their careers and become able contributors to their future organizations. My job as a consultant is to provide effective recommendations and to build my clients’ confidence about how to go forward. So, too, I wish to give this to my students.
There is a lot more I could talk about such as the differences between college and university and opinions about pay equity.  I’ll have to leave that for another blog. For now, I need to get back to marking assignments.

Steven Osiel
VP, Total Rewards

Tuesday, May 1, 2012

Spare Yourself Administrative, Litigation Grief






As a Service Consultant who works closely with benefit plan administrators across Canada, I notice some common benefit related tribulations that can take up a fair bit of my clients’ time.  Let me share a few with you and, perhaps by reading through, you might be inspired to correct any lapses or gaps that might exist in your benefit plan administration.  Basically, I’m writing now to spare you some administrative or litigation grief later.


  • Beneficiary appointments/updates – Those of us in the benefits world are well aware that people usually don’t think much about their insurance details…not unless there is a problem.  We get that.  But, in the event of a problem, details obviously need to be in order.  A major one is that of beneficiary appointments and this applies to life, optional life and accidental death and dismemberment insurance (AD&D).  Considering that families often evolve, plan members need to occasionally re-visit their beneficiary decision. As a plan administrator if you are aware of a change in an employee’s life such as marriage, divorce, or a new child, this is a good opportunity to remind them to update their beneficiary information.  Otherwise, there could be an issue at the time of claim and that is not a good time to discover that an ex-spouse is still listed as primary beneficiary. 
Reminding employees to remember their beneficiary designation is also an opportunity to discuss adding or removing dependents from benefits.  Keep in mind that original signatures are always required.  Given the advancements in technology, some clients are moving to paperless environments; despite that, it is important to remember that an original signature is always required for beneficiary purposes.

  • Make sure to inform ALL carriers – When there are updates to name, dependent, coverage, or salary, most plan administrators are great at informing the health and dental provider about the changes.  But if you have multiple carriers – one for disability, one for life, etc. – don’t forget to inform ALL of them of these changes, too.  Obviously, all providers need to be made aware of personal updates affecting an individual’s coverage.

And, to wrap up, I have a suggestion on how you can save yourself some time by reducing the number of benefit questions you may get.  If you find yourself spending too much time telling people how many units of dental scaling they are entitled to or whether or not there is any room left in their vision benefit for a new pair of glasses, you should direct employees to your insurer’s resources for answers to common questions.  Most insurer websites have personal and secure log-in features allowing plan members to look up coverage details, claims status, etc., and enables on-line claiming.  Encourage plan members to register for on-line access and free up some of your time.

I hope that helps!

Amy Gasparini
Pal Service Consultant

Monday, February 27, 2012

Too Much Sugar in Your Benefits Program?

In a drug landscape weighed down by the high personal and fiscal costs associated with Type 2 diabetes, heart disease, and cancer, the media’s recent debate on sugar regulation comes as no surprise.  This attack on sugar almost makes sense when you consider this sequence: Too much sugar has an unhealthy impact upon diet; poor diet is a critical risk factor contributing to obesity; obesity has implications for ill health and all this manifests itself both at work and at home.   

I’m not going to make a statement as to whether or not sugar should be regulated but I’ll direct you to one recent National Post article and to its rebuttal and you can decide for yourself.

Instead, since March is National Nutrition Month, and because we’re in the business of helping you with your benefits, retirement, and compensation programs, I’ll share some tips on how to reduce your exposure to too much sugar which, I hope, will be good for you, your employees, and your benefit experience.  I invite you to share this information within your workplace.

As a trained chef, I’ve studied nutrition and here are my hints on how to avoid consuming more sugar. 

  1. Processed Food – Almost all processed products on the supermarket shelves, including health foods, are topped up with extra sugar.  “Low Fat” products are some of the worst culprits because the fat is often replaced by sugar to boost flavor and, consequently, calories.   Be careful: Some of our typical Canadian breakfasts contain more than 65 grams of sugar – equivalent to nearly 3 Skor chocolate bars or 13 teaspoons of sugar!
  2. Your Own Food – Cook from scratch with items that have only ONE ingredient. (Fruits, vegetables, spices, meats, legumes, etc.)  As a guide to the freshest one-ingredient items, shop the outside of the grocery store and avoid the aisles.
  3. Read labels. You would be surprised at how much sugar is used (and in large amounts, too) in foods wherein you wouldn’t expect to see it.  Ingredients are listed in order of concentration so see if sugar is in the top five.
  4. Watch condiments and sauces. Ketchup, some salad dressings, and even mustard list sugar as their second ingredient. 
  5. Know sugar’s other names.  Sugar is masked by the following names:  Molasses, cane sugar, dextrose, glucose, and sucrose, to name a few.  These are all sugar. 

Finally, I’ll share this last thought with you: There is no exact right amount of allowable sugar per day but the recommended daily limits (and these are not goals, they are limits) are as follows:


Men:   36 grams
Women: 20 grams
Children: 12 grams


What do you think? Looking at your benefit plan utilization, is there anything there that suggests the negative manifestation of too much sugar in your workplace?  Comment below.

Allison Brown
New Business Development