Employee Benefits: Adapt or Die
Looking for ways to control costs on your Employee Beneﬁts?
Whether in nature or in business, the concept of adaptation is important. Those able to adapt to change will continue to thrive, while those that don't are headed to extinction. Since your employee benefits plan can play a major role in the recruiting and retention of the staff to run your business, this concept of adaptation of your business could be equally important to your employee benefits plan.
Having been involved with the Life Insurance and Employee Benefits business for 34 years, I have watched with interest, the amalgamation and consolidation of Financial Institutions.
This consolidation has had an amazing affect in the area of Employee Benefits.
Years ago there were almost 50 Life Insurance Companies providing Employee Benefits Plans in Canada. Today there are only about a dozen. But even more important is the following:
As of 2007, only 3 Life Insurance Companies control 72% of the Employee Benefits Plan premium in Canada!
This elimination of competition means that, no longer can your friendly Benefits Broker “shop the market” and always ﬁnd you better pricing on your Health and Dental plan.
Companies just won't “buy” your business anymore!
As we continue to see costs rise for health and dental plans, it becomes paramount for employers and employees to be aware of ways to control costs. Statistics tell us that in
2000 the average drug cost per claimant was about $360, in 2006 the average drug cost per claimant was $621. By 2010 it is projected to be $875. We may be reaching the “tipping point.”
One way for plan members to help control the cost of their drug plan, is to be aware that there is a signiﬁcant range of “dispensing fees” when one has a prescription ﬁlled. In British Columbia, at the beginning of 2006, that range went from a low of $5.38 to a high of $9.73 per prescription. While convenient pharmacy locations and knowledgeable pharmacist input are important, just being aware that there may be differences in the cost can save money in the long run.
A recent Sanoﬁ-Aventis Ipsos survey asked employees if they would rather trade their beneﬁts program for a pay increase. A staggering 61% said that they would rather keep their beneﬁts plan than have an additional $15,000 in annual pay.
Lets all adapt to the changing environment so we can keep our beneﬁts plans in the future!