As the government cuts spending on health care, workers expect employers to pick up the slack
Just about every week there is some mention in the media about the state of health care in Canada. The crises vary but generally include overuse of resources, inadequate funding, limited access to providers and hospitals, too few caregivers, an aging population, new diseases, costly treatments and the list goes on.
Another issue frequently discussed is the question of entitlement. Canadians believe that universal health care is their right. Taken one step further, many employees in Canada believe an employer-paid benefits plan is also their right.
Certainly Canada’s health-care philosophy as enshrined in the Canada Health Act is an enviable one, founded as it was on the promise of equal access and basic, universal coverage.
The question becomes: is the public philosophy binding on the private sector, and more, are extended health-care benefits a right, or are they a shared responsibility between employers and employees?
Many Canadian workers have access to upgraded or “extended” health-care coverage through the private sector. While media headlines usually focus on the issues in the public sector, there is often little sympathy for the “greedy” employers who aren’t willing to sponsor a broad package of medical, dental and income protection benefits.
Yet all the issues confronting the public system similarly affect employer-sponsored plans.
Not surprisingly, in the public arena, average Canadians can have little influence on the future of health care in Canada (other than through exercising their constitutional right to vote every four or five years). They can only sit and watch as an increasing percentage of the costs are shifted to individuals or private plans, where they exist. Meanwhile, private plan sponsors face a daunting challenge. As the government distances itself from responsibility, the public (that is, employees) increasingly expects the employer to pick up the growing tab.
In response to this troublesome mix, consultants and actuaries worked out cost-containment measures such as flexible benefits and health-spending accounts, health management organizations, preferred provider networks and wellness campaigns.
The most common approach in Canada is the flexible benefits plan with a number of design strategies available.
Modular plans give employees the option to choose among a selection of plan designs aimed at common needs. For example, one option might provide increased health and dental coverage while another maximizes retirement savings.
Core-plus option plans provide employees with minimum amounts of coverage and allow employees “to buy” additional benefits from an allotment of flex credits.
Health-spending accounts are an additional component either offered as part of a flexible plan, or occasionally on a stand-alone basis. They provide more flexibility to health and dental benefits by extending the coverage to any medical or dental expense that is an allowable expense under the Income Tax Act.
The employer makes a monthly contribution to each employee’s spending account and each employee chooses what products and services to purchase. At the end of the calendar year, members either carry forward the unused deposits or the unclaimed expenses for one additional year.
All of these programs were designed to help employers sponsor benefits programs while establishing an upper limit on their annual investment. Even with these strategies, plan costs have continued to rise dramatically year after year.
Meanwhile, many employees have interpreted coverage cutbacks and plan restrictions as unreasonable “take-aways” from their total compensation. They often feel ill used and under-appreciated. What creates this disconnect? Is it really because Canadians are “whiners” and irresponsible spendthrifts, people who waste their benefit dollars through inappropriate use of the system and yet still demand ever-more coverage?
No. The private and public sectors have completely overlooked the opportunity to treat the Canadian populace as mature and responsible adults. While thousands, maybe millions, of dollars have been spent on cost containment, by comparison very little has been invested in education or communication.
There is a widespread belief that greater efficiencies and cost-savings can be realized in the health-care system by changing government practices, restricting providers and limiting care options. The real opportunity to influence change is at the individual level, where better information can make Canadians more effective consumers of their health-care resources.
Canadians are adept at adaptation. It is an essential characteristic of the Canadian culture, ingrained in our response to our geography, our climate, and our two solitudes. Yet few employers, and certainly not the government, take advantage of this trait.
Human nature being as it is, people will rise or fall to the expectations established for them. Rather than “build it and they will come,” employers should “tell it and they will understand.”
Organizations that expect employees to perform a specific job function provide training and support so that the employee can meet those expectations. A standard component of most performance management programs is the communication of performance expectations, corporate objectives, development issues and key success factors. There is no reason that this approach cannot be equally effective in educating employees about their benefits and how to use them effectively.
The saying, “knowledge is power” implies that knowing something no one else knows gives you an advantage. Unfortunately, most information is more powerful when it is shared.
The best strategy to redress an entitlement mentality is to expect personal accountability and to communicate this expectation through information shared both formally and informally. Most employees have no idea about the total cost for an employer to provide a benefits program because they are never told.
Engage them, communicate with them and make them a partner. Prospective employees go through a rigorous hiring process and demonstrate they have the skills and the talents to help achieve an organization’s business objectives. Tap in to these skills and help employees see their benefits programs in a business light, with competing objectives and strategic choices to be made.
Jacqueline Taggart is a principal in the Communications Practice of the Toronto office of Morneau Sobeco. She can be contacted at (416) 385-2119 or [email protected].
Another issue frequently discussed is the question of entitlement. Canadians believe that universal health care is their right. Taken one step further, many employees in Canada believe an employer-paid benefits plan is also their right.
Certainly Canada’s health-care philosophy as enshrined in the Canada Health Act is an enviable one, founded as it was on the promise of equal access and basic, universal coverage.
The question becomes: is the public philosophy binding on the private sector, and more, are extended health-care benefits a right, or are they a shared responsibility between employers and employees?
Many Canadian workers have access to upgraded or “extended” health-care coverage through the private sector. While media headlines usually focus on the issues in the public sector, there is often little sympathy for the “greedy” employers who aren’t willing to sponsor a broad package of medical, dental and income protection benefits.
Yet all the issues confronting the public system similarly affect employer-sponsored plans.
Not surprisingly, in the public arena, average Canadians can have little influence on the future of health care in Canada (other than through exercising their constitutional right to vote every four or five years). They can only sit and watch as an increasing percentage of the costs are shifted to individuals or private plans, where they exist. Meanwhile, private plan sponsors face a daunting challenge. As the government distances itself from responsibility, the public (that is, employees) increasingly expects the employer to pick up the growing tab.
In response to this troublesome mix, consultants and actuaries worked out cost-containment measures such as flexible benefits and health-spending accounts, health management organizations, preferred provider networks and wellness campaigns.
The most common approach in Canada is the flexible benefits plan with a number of design strategies available.
Modular plans give employees the option to choose among a selection of plan designs aimed at common needs. For example, one option might provide increased health and dental coverage while another maximizes retirement savings.
Core-plus option plans provide employees with minimum amounts of coverage and allow employees “to buy” additional benefits from an allotment of flex credits.
Health-spending accounts are an additional component either offered as part of a flexible plan, or occasionally on a stand-alone basis. They provide more flexibility to health and dental benefits by extending the coverage to any medical or dental expense that is an allowable expense under the Income Tax Act.
The employer makes a monthly contribution to each employee’s spending account and each employee chooses what products and services to purchase. At the end of the calendar year, members either carry forward the unused deposits or the unclaimed expenses for one additional year.
All of these programs were designed to help employers sponsor benefits programs while establishing an upper limit on their annual investment. Even with these strategies, plan costs have continued to rise dramatically year after year.
Meanwhile, many employees have interpreted coverage cutbacks and plan restrictions as unreasonable “take-aways” from their total compensation. They often feel ill used and under-appreciated. What creates this disconnect? Is it really because Canadians are “whiners” and irresponsible spendthrifts, people who waste their benefit dollars through inappropriate use of the system and yet still demand ever-more coverage?
No. The private and public sectors have completely overlooked the opportunity to treat the Canadian populace as mature and responsible adults. While thousands, maybe millions, of dollars have been spent on cost containment, by comparison very little has been invested in education or communication.
There is a widespread belief that greater efficiencies and cost-savings can be realized in the health-care system by changing government practices, restricting providers and limiting care options. The real opportunity to influence change is at the individual level, where better information can make Canadians more effective consumers of their health-care resources.
Canadians are adept at adaptation. It is an essential characteristic of the Canadian culture, ingrained in our response to our geography, our climate, and our two solitudes. Yet few employers, and certainly not the government, take advantage of this trait.
Human nature being as it is, people will rise or fall to the expectations established for them. Rather than “build it and they will come,” employers should “tell it and they will understand.”
Organizations that expect employees to perform a specific job function provide training and support so that the employee can meet those expectations. A standard component of most performance management programs is the communication of performance expectations, corporate objectives, development issues and key success factors. There is no reason that this approach cannot be equally effective in educating employees about their benefits and how to use them effectively.
The saying, “knowledge is power” implies that knowing something no one else knows gives you an advantage. Unfortunately, most information is more powerful when it is shared.
The best strategy to redress an entitlement mentality is to expect personal accountability and to communicate this expectation through information shared both formally and informally. Most employees have no idea about the total cost for an employer to provide a benefits program because they are never told.
Engage them, communicate with them and make them a partner. Prospective employees go through a rigorous hiring process and demonstrate they have the skills and the talents to help achieve an organization’s business objectives. Tap in to these skills and help employees see their benefits programs in a business light, with competing objectives and strategic choices to be made.
Jacqueline Taggart is a principal in the Communications Practice of the Toronto office of Morneau Sobeco. She can be contacted at (416) 385-2119 or [email protected].
