The High Rate Of Inflation On Drug Expenses
Most people do not realize the high rate of inflation on drug expenses in a health and dental plan. On average, they are between 13 to 15% every year. This high inflation rate is the very reason why the provincial budget allocated to medical expenses keeps increasing. Likewise, the provincial government makes cuts to other areas to support the increasing medical expenses. Left unchecked in a company, drug expenses can quickly account for large increases in employee benefit expenses.
Huge companies like Telus, can see the increase quite easily and can react to make plan changes accordingly. A single employee affected by a corporate policy change may complain, but their complaint will not shift the benefit plan for the thousands of employees. For smaller companies, there is generally a stronger reluctance to make adjustments in spite of the increasing claims and employee benefit expenses. There is a fear of disappointing or upsetting the employee and the status
Huge companies like Telus, can see the increase quite easily and can react to make plan changes accordingly. A single employee affected by a corporate policy change may complain, but their complaint will not shift the benefit plan for the thousands of employees. For smaller companies, there is generally a stronger reluctance to make adjustments in spite of the increasing claims and employee benefit expenses. There is a fear of disappointing or upsetting the employee and the status
quo. Their value to the company is too great, or their company culture may be resistant to these changes. Left unchecked, the expense creep just continues to grow exponentially.
The good news is that there are strategies to address these issues. Employee communication and education are key to encouraging conscientious usage of the benefit plan. Good communication means sharing with the employees any concerns the employer has about plan usage, and listening to the employees feedback. Thoughtful education means sharing strategies on how to more efficiently use the plan. If employees are prepared in advance, they can make educated decisions on their usage. And ultimately, if changes are needed, they can be implemented more easily because the employees feel heard. Education and empowerment is the key. If you would like to learn more about how we educate and empower employees to encourage conscientious usage of their benefit plan, please have someone from your team contact us. We have the results to prove how we have reduced employee benefit renewal rates.
The good news is that there are strategies to address these issues. Employee communication and education are key to encouraging conscientious usage of the benefit plan. Good communication means sharing with the employees any concerns the employer has about plan usage, and listening to the employees feedback. Thoughtful education means sharing strategies on how to more efficiently use the plan. If employees are prepared in advance, they can make educated decisions on their usage. And ultimately, if changes are needed, they can be implemented more easily because the employees feel heard. Education and empowerment is the key. If you would like to learn more about how we educate and empower employees to encourage conscientious usage of their benefit plan, please have someone from your team contact us. We have the results to prove how we have reduced employee benefit renewal rates.
