How can plan sponsors work out the kinks in paramedical coverage?

In recent years, Lana Burnstad, senior manager of pension and benefits at Epcor, has noticed massage use move from health care to more of a lifestyle service. “You can’t go down any city block without seeing a wellness centre. The consumerism of massage has changed from therapeutic to wellness. That’s great, but it became completely unsustainable.”

Read: Editorial: Hands off my massage benefits!

While confronting its massage costs, Epcor was also looking to ramp up its mental-health coverage. In 2019, it found a way to meet both goals, amending its annual paramedical coverage to include a $500 cap on massage therapy, a $1,250 maximum for all other paramedical services combined and $2,000 for mental-health professionals.

“We were pretty confident about $1,250 as a total cap for all the other paramedicals because, in the year prior, 89 per cent of employees used less than [that] in total,” says Burnstad. “It was only a couple of employees who would have used more than that and the reason . . . was because of the massage.”

Epcor’s plan restructuring reflects broader trends in paramedical coverage. As the services increasingly represent a larger portion of the overall benefits plan spend, employers are looking to massage their coverage to prioritize employees’ health while curbing the excessive cost.

A growing trend

Kenneth MacDonald, manager of small- and mid-sized business at Morneau Shepell Ltd., says when he started his career in benefits consulting nearly 20 years ago, paramedical coverage typically represent-ed about 20 per cent of employers’ annual benefits spend, with 70 per cent spent on prescription drugs and 10 per cent on other health benefits.

Today, it can be common to see paramedical services comprising 40 to 50 per cent, he says, with reasons including the inflationary cost of the services and growing usage. Another reason, he speculates, is people’s increasing openness to alternative forms of medicine.

Read: Time for more hands-on management of massage therapy benefits?

“I don’t think it’s always a bad news story that paramedical costs are increasing; a portion of it is a good news story,” he says. “People . . . are looking for alternative forms of dealing with their health issues.”

The 2018 Sanofi Canada health-care survey found paramedical services were vying with prescription drugs for frequency of claims — plan members filed an average of 9.4 drug claims in the previous year, compared to an average of 8.1 paramedical claims. However, 85 per cent of employees said they used their drug plan at least once in the past year, while just 53 per cent said the same for paramedical services.

Cost versus value

The growing cost of paramedical coverage prompts questions about whether it’s money well spent — and nothing invites that query more than massage therapy.

“I do think massage therapy has become more than just preventative,” says David Boyce, group benefits distribution manager at ABC Insurance Solutions Inc. “I don’t go to my chiropractor for my lifestyle, because he kind of hurts, but massage therapy is a lifestyle; you’re going to go to the spa and get a massage. Whereas, group plans have always been about keeping someone healthy [and] keeping their standard of living.”

As well, notes Burnstad, it’s difficult to separate the therapeutic from the “lighter touch” uses of massage when evaluating claims from plan members who saw a registered massage therapist. “We couldn’t differentiate between the things that were helping people stay at work versus the things that really fall into lifestyle and enjoyment.”

Read: Opportunities around drug coverage for traditional ‘lifestyle’ issues

However, Manulife Financial Corp. takes a different view. “From an employer perspective, . . . those are the sorts of things that, to me, make sense to invest dollars in,” says Maria Fraga, the insurer’s head of global benefits and wellness. “I would rather invest dollars in massage therapy, physiotherapy, chiropractic, acupuncture, mental health — the sorts of things that help people manage — versus [spending on] back surgery or some more advanced-stage diseases.”

In 2016, the company unbundled its paramedical coverage, providing all employees with base mental-health coverage and the choice of three levels of coverage for a range of other services.

As an insurer, Manulife has seen an increase in employers’ massage therapy spend, says Donna Carbell, head of group benefits, but she views it as a preventative approach to physical health. Massage and other physical benefits under the paramedical umbrella, including physiotherapy, chiropractic and acupuncture, often help plan members address chronic physical pain or other health conditions, she adds.

Read: Manulife boosts mental-health benefits for staff to $10,000 per year

But it’s also important for employers to consider how paramedical spending may impact other areas of their benefits plan. “The way treatments are shifting, it does cause that shift in your plan,” says Carbell, providing the example of a new expensive medication that may prompt an increase in an employer’s drug spend, but could also lead to a decrease in absenteeism or long-term disability costs if it’s helping to keep employees at work.

Boyce agrees. “A knee-jerk [reaction] isn’t going to solve a problem; it could create a bigger problem. Either you shift your problem around the plan or you shift a problem down the road to a disability claim.”

With Epcor’s changes, the company offered a workaround for the reduced coverage. If staff found the plan didn’t provide them with the support they needed to be fit for work, they could meet with Burnstad’s team. “We wanted to reinforce to our employees that if they were recovering from a car accident or an old sports injury or something like that, and finding the paramedicals not covering the kinds of support they needed, . . . we would be able to look at our employees’ needs and tailor something for them,” she says. “But that invite was shared with 3,300 employees and not a single employee has called.”

Green Shield Canada is taking a different approach to the cost versus value conversation. The insurer is looking into research and working with practitioners to determine what conditions the services are proven to help. Ned Pojskic, the insurer’s leader for pharmacy and health provider relations, says the majority of the work has been around chiropractic care, but it’s also looking at massage.

Read: Dubious chiropractic claims show need for more scrutiny on paramedical expenses

“Low back pain is a classic case where chiropractic treatment has a lot of evidence associated with it. [Chiropractic care] does not have evidence associated with autism. . . . So that’s the kind of distinction we’re trying to make — where does the evidence exist, where is it emerging? And then reimbursement should follow what exists in terms of evidence.”

Green Shield Canada doesn’t want to go the way of authorization, which would be “burdensome and difficult,” says Pojskic. Instead, it’s changing its claims standards to collect more information from health-care providers about what the work is treating. “In our new claims standards, [it will ask], ‘What body part was being treated? What’s the modality of treatment?’ . . . Then those combinations of factors will give us enough information to judge whether the claim should be paid. We’re not there yet, but that’s the evolution of the system.”

Trading massage for mental health

In 2018, Green Shield Canada also introduced a plan design called SMARTspend, which eliminates massage therapy coverage, re-investing the funds into a managed drug formulary, health coaching, mental-health support, vision and dental benefits.

“It’s not like [massage] is useless. We weren’t saying that. But it’s less evidence-based than some of the other [benefits],” says Zahid Salman, the insurer’s president and chief executive officer.

The new plan design is in line with the trend of employers adapting their paramedical coverage to invest more heavily in mental-health services, like Epcor did with its changes. When the British Columbia Nurses Union’s annual massage costs tipped the scale at $31 million in 2018, compared to $3 million in 2008, it started a year-long consultation to determine which benefits its members prioritized and how it could change the plan, such as capping massage spending and reallocating the additional funds to other valued benefits.

Read: B.C. nurses’ massage benefits costs up $28M since 2008

But even without swapping coverage, the industry agrees that dedicated spending on mental-health professionals under the paramedical umbrella is on a steep incline. As an employer, Manulife increased its coverage for mental-health practitioners to $10,000 annually per employee and their dependants in 2017.

“If we can support employees and remove the financial barriers to get the care they need, we should see resulting disability claims come down, pharmacy claims related to behavioural health medications come down, improved engagement — and we’ve seen all of those,” says Fraga.

Between 2016 and 2019, the insurer saw a 13 per cent decrease in mental health-related short-term disability claims, a four per cent increase in employees returning to work and a five per cent decrease in mental health-related drug spending.

Read: Manulife lowers STD claims with mental-health benefits boost

As an employer, between September 2018 and 2019, Manulife saw a 15 per cent increase in psychologist claims and a 35 per cent rise in claims for social workers and clinical counsellors, says Carbell, while total paramedical claims increased six per cent. “When you talk about change in paramedicals in recent years, I would say the one that sticks out in my mind as the most positive change I’ve seen — employers are putting a much greater emphasis on prevention, early intervention and wellness.”

Philosophical shift

When Epcor restructured its paramedical coverage, there was an initial outcry from employees but the fervor has since cooled, says Burnstad. Also, the change netted a positive outcome. During the plan enrolment period, many employees, for the first time in years, reviewed the details of their benefits plan and made changes to suit their needs.

The shift has also been philosophical, both for Epcor and its employees. “Certainly, lots of employers are struggling, trying to keep their plans sustainable and come up with plans that are the best solution for employees . . . but still send a message that paramedicals aren’t intended to cover 100 per cent of your benefits needs,” says Burnstad. “They’re there to get employees over the inertia of seeking treatment.”

Kelsey Rolfe is an associate editor at Benefits Canada.