Balancing needs, costs

Rising health-care expenses have employers grappling with what to leave in benefit plans
By Peter Merrick
|CHRR, Guide to Pensions & Benefits|Last Updated: 02/13/2003

Aside from hockey supremacy, what many Canadians believe unifies the nation as a people distinct from our neighbours to the south is a universal health-care system. Canadian identity is directly tied to the Canada Health Act which promises: “To protect, promote, and restore the physical and mental well-being of every Canadian resident and to facilitate reasonable access to health services without financial or other barriers.”

In 2002, more than $85 billion will be spent for health care in this country with 70 per cent of these costs paid for by the publicly funded system. Corporate Canada and individuals pay the remaining 30 per cent. Over the last few years with the rapid growth of SOHOs (small offices and home offices) there has been an increase in individuals purchasing their own medical and dental coverage. These individual plans, however, only account for 15 per cent of the total of all private coverage, while Canadian employers are expected to pay the remaining 85 per cent this year.

The standard benefit plan provides coverage for semi-private hospital rooms, prescription drugs, dental coverage, chiropractors, naturopaths, psychotherapists, physiotherapist, vision care and travel medical insurance. The vast majority of employer medical and dental plans were designed to be supplementary to the government plan and were not meant to be the employee’s primary plan. However the events of the last decade are quickly changing this reality and the function of these insurance plans.