How climate change is impacting benefits, employee health

Last summer, the NUPGE issued a call for improvements to wildland firefighters’ benefits, salaries, pensions and working conditions. While Blundon says the union didn’t have data on firefighters’ benefits claims — as they’re part of much larger public sector unions — the physical and mental-health impacts of the job are myriad.

Read: Union calling for better benefits, pension accrual for wildland firefighters

Wildfire smoke can cause irritation to the eyes and respiratory tract and, in more severe cases, can reduce lung function, exacerbate asthma, cause cancer and lead to heart failure or early death. There’s also the mental strain of seeing fires burn down homes and injure colleagues.

“It is a difficult work environment, and we’re hearing from workers that their mental health is suffering because of those conditions too,” says Blundon.

Few workers are as obviously exposed to the health impacts of climate change as firefighters. But as extreme weather events become more prevalent, heat waves grow longer and more dangerous and air quality worsens, employees are at risk of developing new physical or mental-health conditions or having existing health issues exacerbated.

While many plan sponsors may be used to responding reactively to extreme weather events when they affect employees, they’re only just starting to consider what the health impacts of climate change mean for their benefits and wellness strategies. Experts say it’s important that employers consider everything from how employees can access health care in emergencies to whether their health benefits adequately cover chronic conditions to what programs can strengthen plan members’ resilience and well-being.

Read: How employers can support remote workers in regions affected by conflict, natural disasters

“Employers today are really looking at [support in this area] as acute management,” says Joey Raheb, chief commercial and broking officer for health solutions at Aon. “But what we’re talking about is how do you get employers ahead of [climate-related health issues] and . . . work on resilience.”

The link between climate and health

Climate change is impacting employees’ health in numerous ways, says Dr. Samantha Green, an assistant professor in the University of Toronto’s faculty of medicine and the faculty lead in climate change and health. “Climate change is the biggest health threat we face. We know that the health impacts of the climate crisis are only getting worse with time.”

Hurricanes, floods, wildfires and other extreme weather events can directly injure people and exacerbate existing mental-health issues and cause post-traumatic stress disorder and anxiety. A 2023 paper by researchers from Monash University in Australia and the University of Edinburgh found “significant associations” between exposure to wildfires and anger issues, PTSD, severe psychological distress and heavy drinking.

While there’s no public data available on the correlation between extreme heat or weather events and rising benefits claims, Raheb has seen this trend among Aon’s plan sponsor clients. “You can see the direct linkage with things like mental-health [claims],” he says, pointing to wildfire seasons in Western Canada. “There’s a wildfire, then increased spend on mental health [and] absences related to trauma-based incidents.”

Read: How employers can support employees impacted by wildfires

The consultancy is currently working with plan sponsors to better quantify the impacts of climate change on their workforce, says Madeleine Catzaras, the firm’s ESG human capital solutions leader for Europe, the Middle East and Africa.

Taking a preventative approach

It’s important that plan sponsors evaluate their existing supports — from mental-health coverage to health and drug benefits to wellness resources and work flexibility — to assess how well they’ll hold up in an emergency scenario and how effectively they can support employees in the aftermath, says Jennifer Schmidt, partner and innovation leader at Mercer Canada.

Evacuation notices and extreme weather can disrupt employees’ ability to get vital health-care services — a particular concern for those with chronic conditions that require regular check-ins. Alex Boucher, national leader for Mercer Canada’s total health management practice, advises employers to ensure employees have access to these services through virtual health and pharmacy platforms. Plan sponsors can also check with vendors about their own contingency plans, such as whether an employee assistance program provider has enough staff to answer the phones in an emergency.

CAA Club Group hasn’t directly considered climate change as part of its benefits and wellness strategy, says Mara Notarfonzo, the company’s vice-president of total rewards, but the broad range of offerings within its plan are crucial to supporting employees.

Read: CAA Club Group’s enhanced health benefits, wellness app leads to award win

In 2023, CAA implemented a new benefits plan: the company now pays 100 per cent of the premiums for extended health and dental, life and disability insurance. It also boosted its paramedical coverage, upped its annual maximum for mental-health providers to $2,000 and introduced new wellness resources and vaccine coverage.

“As employers, what we need to do is build plans that provide flexibility and allow people to access care when they need it. Climate change can affect people in different ways, be it physical or mental, so having good coverage in the moment [is key].”

Climate-specific support

Some plan sponsors are starting to consider climate change-specific benefits to retain their edge as employers of choice.

Catzaras says she’s seeing employers use parametric insurance — a product more typically used in commercial risk — as an employee benefit. The insurance pays out a lump sum to employees impacted by a natural disaster that meets thresholds specified in the policy, which employees can use to evacuate or build back afterwards. She says employers with staff in a region that’s prone to certain weather events have been more likely to consider this benefit.

While CAA’s employee base is primarily in Ontario, it also has a small cohort in Western Canada. Notarfonzo says during last summer’s wildfires, the company ended up helping two employees temporarily relocate by reimbursing moving expenses. It also helped other employees acquire air filters for their homes.

Read: What’s the ROI of employee well-being support tools?

Some benefits offerings can even contribute to climate-change mitigation efforts by helping employees reduce their personal carbon footprint. For example, Raheb says employers could expand the list of eligible expenses under a wellness spending account to include costs related to public transit passes, home energy retrofits, solar panels or upgrading a home heating/cooling system.

It’s something that employers like the University of Western Ontario and the University of Saskatchewan already do. Sun Life Financial Inc.’s personal spending account also counts ‘green living’ costs like home energy audits, air purification systems and energy-efficient appliances among its eligible expenses.

An equity lens

Some Canadians are more exposed to climate health risks than others, notes Green. Low-income and racialized Canadians are more likely to live in ‘urban heat islands’ — areas with little tree cover that can be up to 15 degrees hotter than other areas of the same city. Those who work outdoors are more at risk of heat-related illnesses and may have little or no choice about whether to work or not.

Boucher says employers should consider revisiting their plans with their most vulnerable employees in mind and “flip that pyramid” to prioritize giving them more support.

‘Too hot to work’ regulations have come into effect in some European Union countries, while other jurisdictions, including the U.S., have started considering them.

“These challenges are very much confronting employers,” Catzaras says, adding some are starting to establish measures that allow employees to work earlier in the day or at night to avoid the hottest part of the day, as well as temperature thresholds for when work should stop. In the Middle East, where extreme heat has been a long-standing reality, some employers provide wearable technology that informs employees when temperatures reach unsafe levels.

“Employees are vulnerable, and . . . employers do have an obligation to protect them, especially those who may be exposed to extreme weather through their place of work,” Green says. “I do think they need to develop detailed plans for how they will respond to climate weather events, including extreme heat.”

Kelsey Rolfe is a Toronto-based freelance writer.