Every five years the Conference Board of Canada releases its Benefits Benchmarking report. The fourth edition, Benefits Benchmarking 2019, was just released. This report is based on a survey of Canadian organizations on their employer-sponsored benefits program.
Naturally, health benefits make up a large part of the report. The survey looks at both traditional insurance benefits plans as well as Health Spending Accounts (HSAs).
Our top three takeaways from the report were:
- HSAs are becoming more popular. About 66% of Canadian organizations now offer HSAs to employees. An increase of 12% from the last report.
- Annual premiums continue to rise. The average annual cost for insurance premiums (extended health plan and dental coverage) rose by 9% from $3521 in 2015 to $3850 in 2019 for family coverage for a full time employee.
- Cost is a top consideration for employers. Just over one-third of organizations ranked cost containment as the number one priority for their benefits strategy.
Given these ever-rising premiums and the desire to contain costs, it should be a no-brainer for employers to switch from a traditional insurance plan to an HSA to make budgeting predictable. There are no premiums with HSAs. The employer sets the dollar amount for each category of employee. The Benefits Benchmarking report highlights the cost advantages of an HSA:
“Not only are [HSAs] fully tax-deductible, but [they] provide the consistency of a fixed cost on an annual basis, which reduces the employer’s risk. Furthermore, funds not used by the employee are returned directly to the employer, rather than being lost in an insurance premium.”
Another factor in designing a benefits plan that is important for employers is attracting and retaining talent. Almost 40% of organizations said that this was very important as an objective of a benefit plan, according to the 2019 Benefits Benchmarking report. At Brock Health we believe that the flexibility of an HSA combined with its comprehensive coverage, makes an HSA an excellent way to retain employees. The Conference Board of Canada further highlights the value of an HSA in today’s multi-generational workforce:
“[HSAs] also provide flexible benefits for workers with more complex demographic needs than their predecessors. For example, younger employees with no dependants might choose to allocate their [HSA] funds to personal vision care, while employees with teenagers may be able to use [HSA] funds to cover expensive dental or orthodontic care for their children.”
There has never been a better time to switch from a traditional insurance plan to a Health Spending Account. HSAs have several advantages over traditional insurance plans including cost containment, more flexibility and increased coverage.