In November, we hosted our semi-annual client education session, providing plan sponsors with insight on benefits trends and creative ways to differentiate their plan to compete in a tight labour market. Here are the highlights of this session.
Attraction and retention rank highest for plan sponsors as the reason for which plan sponsors are offering benefits. Over he past 2 years, approximately 14% of employees have left the workforce, and 41% say they are considering leaving. This means that labour shortage and attraction and retention are posing challenges for employers in many industries.
Plan members are looking for more from their benefits plan. According to a comprehensive survey of Canadian employees by Benefits Canada, 73% of employees say that a wider benefit offering would be a reason to stay with their present employer for longer and that employee satisfaction is connected to benefits.
According to a US-based MetLife study, 55% of employees indicated that health and wellness programs are critical in their decision to accept a new position in 2022. It is interesting to note that this number has more than doubled from pre-pandemic surveys.
Benefits that have become more important to employees include flexible work environments, more time off, and an overall sense of work-life balance.
If you can, offer hybrid work opportunities and/or less structured hours.
Allow employees to complete their work on their time. It may lead to higher job satisfaction and lower desire to seek new opportunities.
Fifteen years ago, wellness programs were considered a luxury, but today they are an important way of differentiating your workplace. Reduced absenteeism, better attraction and retention, more productivity and increased dedication to the organization.
The pandemic helped give plan sponsors perspective about the concept of wellness. Organizations have taken a more strategic approach to wellness programs to examine what kind of workplace they want to create and the types of benefits that are attractive to employees.
We know that wellness means different things to different people, and that what makes people feel well changes over time. As employers, we must look at employees as whole people and recognize that they don’t leave their personal and health problems at the door when they come to work.
Consider striking a formalized committee for wellness. The purpose of the committee would be to ask employees what they want and measure impact.
Look at gaps to be filled (social health, financial security or lack of financial literacy, physical health)
Target wellness initiatives to address those gaps.
Flexible Spending Accounts
One way to introduce a wellness component into the benefits plan is by way of a Flexible Spending Account. Since 2017, both Health Spending and Wellness Spending Accounts have become more common. Today, 9 out of 10 plan members and sponsors agree they are important.
A bit on terminology:
Health Spending Accounts are also known as HCSAs or HSAs. They are governed by Canada Revenue Agency Rules, and claims submitted are a tax deduction to the employer and any reimbursement is tax-free to the employee.
Wellness Spending Accounts are also known as Taxable Spending Accounts or TSAs, Life and Wellness Expense Accounts, and more. Claims reimbursed through these arrangements are taxable to the employee. Eligible claims can be anything from gym memberships to fitness apparel to pet daycare or group savings contributions.
Flexible Spending Accounts: Give employees a fixed budget per year, and each employee decides how to allocate that budget. For example, one employee might want new glasses or is expecting an orthodontic bill, so that person would allocate funds to the non-taxable HSA. Another employee feels super healthy and prefers to spend their investment on a ski pass and a contribution to the TFSA.
Benefits to Employees:
Employees can personalize their benefits by using the dollars to meet their needs (e.g. Additional mental health supports)
Plan members want the power to purchase what they want for health and wellness – investing in what matters most to their wellbeing.
Benefits to Employers
According to the Sanofi Healthcare Survey, 82% of employees indicate that they intend to stay with their employee if they have a health spending account. This number drops to 64% for those employees without a health spending account.
The fixed contribution to a flexible health and or wellness spending account makes it easier to budget benefit costs.
Communicate to your team that health, wellness, or flexible spending accounts are part of your wellness investment.
Design your wellness plan to say “yes” by clearly identifying eligible claims, linking claim categories to the overarching goal of the program.
Consider having a third party administrator adjudicate wellness claims. It can be awkward having a team member make decisions about whether a co-worker’s claim falls within the intended definition.
Think outside the box when developing wellness claim categories. These programs help make your benefits plan braggable, so be creative!
Pet daycare, vet bills, or pet insurance
Contributions to a TFSA, RRSP, or RESP
Student loan repayments
Continuing Education courses
Home office equipment
Alternative therapies that would not be eligible under the non-taxable Health Spending Account like Reiki or other unregulated health practitioners.
Currently, inflation is top of mind for many Canadians. With rising costs and eroding savings, there is an opportunity for employers to support employees with their financial security.
A group savings plan can demonstrate your commitment to helping plan members save for retirement and can be simple to set up.
Fixed contribution: You can budget for employee contributions (match employee contributions up to a fixed dollar maximum).
Align program with organizational goals: Consider a Deferred Profit Sharing Plans (DPSP) to get everyone pulling in the same direction for organizational success.
Consider new group savings options in the marketplace which are disrupting the traditional insurance company models.
If adding a group savings plan is not in your budget, promoting financial literacy can be within reach. Highlighting the tools that might already be available in your Employee Assistance Program or through publicly funded programs may be appreciated.
Flexible working arrangements that reduce the burden of filling up your gas tank, spending on alternative transportation, or parking can also support employees who are struggling with higher costs in other areas of their lives.
Mental Health continues to be critical for both employers and employees. Canadian life and health insurers processed nearly $600 million in claims related to mental health in 2021, up 45 per cent since 2020 and 75 per cent since 2019, according to the Canadian Life and Health Insurance Association’s Annual Fact Book.
According to the 2022 Benefits Canada Survey, 46% of respondents reported that they think mental health will have the largest cost impact across all benefits (drugs, paramedical, disability) over the next 5 years. Mental health stressors impact absenteeism, productivity, and health claims and this trend is on the rise.
Employers have an obligation to support employees and a duty to accommodate when possible. Helping employees address the many ways in which they might be struggling can take many different forms.
Use your Flexible Spending Account to offer benefits that your team finds beneficial to their mental health.
Scour your plan and communicate what you already have. For example, highlight your Employee and Family Assistance Programs plus expanded services like fitness programs that might be included in your plan.
Look for alternative programs that might do more to support mental Health. The new Mental Health support platform available through Dialogue (available through Canada Life, Sun Life, and the myHSA platforms) offer affordable mental health support with no limit on the number of visits until remission. Read more about the integrated suite here.
The desire for personalized, tailored products and services in other areas of our consumer lives has trickled into the benefits world as well. There is an increased opportunity to offer voluntary benefits to allow your team to build a plan that works for them.
Gaps and financial shortfalls can sometimes be remedied with voluntary benefits options.
They can help both employers and employees
The right mix of benefits can be used to attract and retain diverse employees
Reduce the financial burden of adding a benefits to all employees when the benefit might only be relevant to a few
Charging up your benefits need not be costly. By addressing the basics of plan member communication, looking at employees as whole people, and building a program to address unique and evolving needs, organizations can create a culture of caring and mutual dedication.
We’d love to connect. Feel free to use this booking link to find a time that’s convenient for you.