Employees willing to pay higher health premiums

Turns out employees may be willing to cough up some money to cover the rising costs of their health benefit plans after all — alleviating Canadian employers’ pain in the back from carrying the load.

Angus Reid conducted a survey of about 1,500 Canadian group insurance plan members for Aventis Pharma, the Canadian arm of the global pharmaceutical company. The motivation behind the survey was to find an argument for employers not to restrict their employees’ health benefits, said Fred Holmes, national practice leader of Group Health and Welfare, Buck Consultants in Toronto, and advisory members on the committee to the survey.

The results showed that Canadian group members place extreme importance on all aspects of their health benefits plans — so much so that 54 per cent said they would be willing to pay higher premiums if employers would not pick up the tab of increasing costs.

A resounding three-quarters would be willing to pay higher premiums to cover the soaring cost of drugs. Only a few (15 per cent) are “somewhat unwilling” or “very unwilling” (nine per cent).

“It shows there is disconnect between employers’ staff attitude surveys and the survey findings. Employers have perceived resistance to benefit cost increases. But the results of this survey question whether employers have been firm enough, if they’ve pushed employees against the wall about increases,” said Holmes.

The survey asked group plan members whether they would be willing to pay a higher premium to “guarantee that their health benefit plan covers any new drugs that are available regardless of their cost.”

Almost 30 per cent said they would be willing to pay less than $100 per year, another third (35 per cent) said they would pay between $100 and $200 and 21 per cent said they would dish out more than $200 per year.

The average cost of health benefit plans per employee ranges from $1,500 to $2,200 per year. Holmes says that even a $100 increase, about five per cent, is nothing to balk at. “It’s a major statement by employees.

“If you ask me, lots of employers have been talking about cutting back on costs, but the reality is no one is doing anything about it.

“The survey shows employers can play hardball,” said Holmes.

Cindy Wiggins, senior researcher social and economic policy at the Canadian Labour Congress (CLC) in Ottawa, said that affiliates and their members are very much aware of employers pulling back on health benefits, including limits on coverage and cafeteria-style approaches. CLC represents 2.4 million workers in 72 unions, 12 federations of labour and 125 community-based labour councils.

While she said members resist employer approaches to reduce coverage, affiliates recognize that benefits are extremely important to members, and that push come to shove, it could affect bargaining strategies.

She said unions do not want to be in a position where they are forced to bargain for wage increases or benefits, and not both.

“My guess is that if it came down to a choice between a three per-cent wage increase or better health care and only a one per-cent wage increase, members would go for the health-care deal. Because health care is important in terms of security,” said Wiggins.

She said that the government’s pull back and, in the case of Alberta, push toward privatization, would exasperate the issue.

Susan Bowyer is facilitator of the Employer Committee on Health Care in Ontario (ECHO) and consultant at the Toronto office of William M. Mercer. She says a number of cost drivers have had a lot of employers question their plans, including government cost-shifting — delisting of certain portions of medical services (hearing tests, optometry exams, physiotherapy) — increased costs of medical services and drugs and higher incidents of disability.

Some employers have had the philosophy that employees can pick and choose benefits based on need while others have left the plate wide open, and let claims fall where they may, she said. Another approach is a managed care — balancing evidence-based quality medical care with costs.

Bowyer added that more items are expected to be delisted by the government in Ontario, but won’t be announced until the end of the year.

Another effort by employers to reduce costs is improved employee education, said Steve Bradie, vice-president claims and administration at Green Shield Canada, a carrier with more than 3,000 businesses and 80,000 covered people.

“A big thing is education about costs. Very few employees have any idea about how much their health care costs.

“Bills are sent directly to the carrier. There’s a sense of entitlement among employees.”

He adds that while not a lot of employers are looking at wellness programs, there is a trend toward proactive, preventive health care in the workplace.

The survey also found the following.

•Canadian group plan members place a significant amount of importance (between 80 per cent and 94 per cent) on all aspects of their health benefit plan.

•The drug component ranked as number one in importance, 94 per cent, followed by disability coverage, dental plan and extended health benefits.

•A small majority (55 per cent) indicated that if they could have only one health benefit, it would be prescription drug coverage.

•Most Canadians (68 per cent) believe their health plan benefits meet their needs very well.

•Forty per cent of respondents expect their plans to cover the cost of services dropped by provincial health plans, while 38 per cent expect their employer to pay, 12 per cent expect to share costs while five per cent hope the government will pick up the tab.

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