With a proud history and a current workforce of 69,000, Canada Post has a wealth of plan sponsorship experience to draw on. Julie Joyal, who recently joined Canada Post as director of pension services, and Stefano Biscotti, the organization’s director of total compensation, discussed the factors shaping the benefits plan landscape today—and in the coming years.
What keeps plan sponsors awake at night? According to Joyal, soaring costs and retirement benefits rank high on the list. In response to these pressures, Canadian plan sponsors have been building such components as controlled formularies, managed care, mail-order pharmacy, self-service administration and preferred providers into their plans, she said. For companies offering retirement benefits, Joyal advocated such measures as defined contributions, variable benefits, higher deductibles and “flexible programs that allow employees to pay for what they really need.”
To illustrate the impact of plan redesign, Biscotti presented Canada Post as a case study. In 2008, facing a twofold increase in drug spend over the next decade, Canada Post replaced its multi-tiered plan with a simpler controlled formulary plan. “We had to make the business case to get senior leadership on board,” said Biscotti. The new plan has contained year-over-year percent increases to single-digit figures, putting Canada Post ahead of current benchmarks. Biscotti said the organization is now turning its energies toward more judicious use of generic substitutions, longer prescription fill cycles and convenience programs to enhance adherence.
Sharing the podium with these experts was Wesley Jones, director of group product development with Great-West Life. He explored the same challenges from a plan carrier perspective. Jones noted the shift in healthcare costs from the public to the private sector and the growing emphasis on mental health in the workplace. “A psychologically safe environment has become just as relevant as a physically safe one,” he said.
Citing prescription drug claims as the key driver of rising benefits plan costs, Jones called for a “dual bottom-line approach,” which considers both cost containment and broad access as ultimate aims. He urged plan sponsors to think carefully before restricting access to benefits. “If there isn’t something to protect employees,” he said, “how will they maintain themselves in the workplace?”
Jones suggested that plan sponsors considering a redesign should ask the following questions:
- What is the key employee benefit challenge we’re facing?
- How do we see technology and self-service impacting our program?
- What cost management strategies make the most sense for us to consider?
- What education and engagement needs do our employees have?
While declaring himself “a big believer in cost-sharing plans,” Jones cautioned against setting deductible or co-pay levels too high. “If the level is so high that the employee doesn’t follow through on treatment, everybody loses,” he said. He also pointed out another issue: “People at different life stages have different priorities and want to tap into the benefits that most affect them.” Options such as voluntary benefits, healthcare spending accounts and retiree benefits help make this possible.
Finally, Jones stressed the importance of keeping members in the loop. “If you want them to be good stewards of your plan, they have to know what’s available,” he said. By the same token, “survey your members to find out what they’re looking for.” Communication with your carrier, meanwhile, “helps us understand and deliver the best fit for your organization.”
Gabrielle Bauer is a freelance writer in Toronto. gbauer@sympatico.ca