Group benefits are evolving towards flexible plans in a response to changing employee needs and the inability of traditional benefits packages to address all employee concerns. According to the 2020 Sanofi Canada Health-Care Survey, 72% of Canadians still have a traditional plan and 28% have a flexible (flex) plan. That is an increase from 2017 when the split was 80-20 between traditional and flex plans.
Among plan sponsors (business owners) with a traditional plan, 67% said they would prefer to offer a flex plan. This category is broken down into 43% who said they are considering the change and 24% who said there are too many barriers.
The survey also found that 57% of plan sponsors offer health-care spending accounts (HSA’s), which is up significantly from 2018 when only 33% said they offered HSA’s.
What is a Flexible Benefits Plan?
Flexible benefit plans offer more choices, personalized coverage, and stable premiums. Instead of providing a defined package under a traditional benefits plan, employees can explore various options to ensure optimum coverage for their individual needs. This contrasts with a traditional plan which offers the same coverage for each employee, even though a young employee will have different coverage needs than an older one.
What are Health-Care Spending Accounts?
HSA’s provide an account for employees to spend on direct medical costs. These could include dental checkups, prescription drugs, physiotherapy, etc. The advantage is there are no premiums for having such an account and the employee gets a choice in what benefits they need from the account.
Some business owners who are concerned about cost and complexity are offering a hybrid system, a traditional benefits plan which covers basic needs and an HSA for extended benefits such as massage therapy. This shows that group benefits are evolving towards flexible plans, even if the majority of plan sponsors still use a traditional plan.
If you are interested in learning more about how group benefits are evolving towards flexible plans, contact DENT Benefits today to discuss your options!
The information in this material is derived from various sources. Material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources; however, no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please contact us for benefit, pension and insurance advice based on your corporate or personal circumstances.