Mental health benefits have become essential for employee wellbeing, rather than just an extra perk. A recent survey by the Commonwealth Fund revealed that 45% of Canadians aged 12 and older reported needing mental health care. Nearly half of these individuals felt their needs were either unmet or only partially met.
Matt Hendrick, CEO of GroupHEALTH Benefit Solutions, has witnessed the shift in mental health support. He explains that employers are now prioritizing these benefits more than ever.
“Over the last 15 years, we’ve seen a huge shift,” Hendrick said. “We started with basic Employee and Family Assistance Programs (EFAPs) that provided minimal support. Now, tailored mental health solutions are the norm, focused on what employees actually need.”
Hendrick pointed out that GroupHEALTH’s data supports this trend.
“When we looked at our plans, we found that most interactions were related to mental health services, like counseling,” he noted. In response to this growing demand, GroupHEALTH plans to launch a new program called “sparrow” in October.
“sparrow will provide access to 5,000 therapists and offer services in up to 30 languages,” Hendrick explained. “It will include internet-based Cognitive Behavioral Therapy (iCBT) and mental health services for children for the first time.”
Understanding Regulatory Changes
As the Canadian government introduces new healthcare programs, such as national dental and PharmaCare, it is important for employers to stay informed about how these changes might affect their existing benefit plans.
“There’s a lot of uncertainty right now,” Hendrick admitted. “Expanding access is sensible since some populations lack coverage. However, about 75% of Canadians already have employer-sponsored benefits, and shifting costs to taxpayers doesn’t always lead to better coverage.”
To navigate these complexities, GroupHEALTH is part of the Smart Health Benefits Coalition. This group works to understand how new regulations will impact both employers and employees. “We need clearer guidance from the government on how these programs will fit with what’s already in place,” he added.
Customized Plans for a Diverse Workforce
Employers are also facing the challenge of a multi-generational workforce. There is a growing demand for customized benefits, but Hendrick notes that many small businesses focus more on sustainability than on tailored solutions.
“We’re seeing less demand for fully customized plans,” he said. “Instead, small businesses prefer cost-effective solutions that still meet the same needs as larger organizations. The ‘sparrow’ program addresses the gaps we’ve identified through feedback from plan sponsors, providing a better experience without the higher costs of fully customized plans. This benefits both employers and employees.”
“For example, we work with many community service workers, like healthcare aides and residential care workers. We have structured our plans to suit their needs, offering lower out-of-pocket costs and reduced dispensing fees.”
Tackling Rising Drug Costs
As drug prices continue to rise, controlling these costs has become a priority for employers. According to the Canadian Institute for Health Information (CIHI), public drug program spending reached $17.2 billion in 2022, a 6.4% increase from the previous year. Spending on biologics accounted for 29.6% of public drug spending, with some of these drugs costing over $250,000 per person annually.
“It’s one of the biggest challenges we face,” Hendrick said. “We’ve seen increased usage of specialty drugs, which are becoming a significant expense. We keep track of provincial formularies and cap specialty drug coverage over $10,000. This helps maintain stability for small businesses while ensuring employees still receive quality care. Mark Cuban’s efforts to lower drug prices in the US are noteworthy, and Canada could learn from that, especially in reducing fees and ingredient costs.”
Looking ahead, Hendrick believes that addressing drug costs and improving disability management is key to maintaining sustainable benefits.
“About 60% of plan costs come from these two areas,” he explained. “If we can focus on early intervention in disability cases and find smarter ways to manage drug coverage, we can make benefit plans more sustainable for the long term.”
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