Despite cost containment efforts in recent years, employers spending on benefits programs for employees represents a significant cost. In fact, the average cost of providing benefits for employees is $8,330, finds a Conference Board of Canada survey.

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“With the prevalence of chronic disease and incidence of mental health issues increasing, the costs of benefits have never been higher,” says Nicole Stewart, senior research associate, Leadership and Human Resources Research for The Conference Board of Canada. “Employer-sponsored benefits are valued by employees, but in order to control costs, organizations are going to need to make tough decisions about where to best allocate funds.”

To manage these costs, some employers are looking to generic substitutions for prescription medicines, or excluding certain drugs from coverage. Others seek to increase the employee share of premiums.

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However, these solutions only address part of the cost pressures facing employers. Organizations are increasingly turning to programs aimed at physical and mental health promotion, early assessment and intervention to help reduce the cost of claims.

Beyond preventative measures, employers are also keeping benefit costs lower by limiting certain long-term benefits to employees, like retirement benefits. More than half of Canadian employers offer benefits to employees after they retire, primarily covering prescription drugs, vision care, hospital stays, and dental and paramedical care.

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Here are some other survey findings.

  • More than 90% of employers provide full-time employees vision care coverage (92%); private or semi-private hospital accommodation (96%); out-of-country medical coverage (99%); paramedical services like massage therapy, chiropractic coverage, and physiotherapy (99%); major restorative dental services (98%); accidental death and dismemberment (91%); and long-term disability (99%).
  • Nearly all organizations provide benefits for permanent part-time employees who work a minimum number of hours per week (on average 20 hours or more).
  • Most organizations don’t have a set annual maximum for prescription drug coverage. But on average, reimbursement is limited to 89% of the claim. Annual maximums are typically in place for dental work.
  • Over the past three years, there has been a significant increase in the number of employers offering full-time employees critical illness insurance (from 26% to 35%)—though more as an optional benefit than a standard one.