QUARTERLY Volume 9 • Issue 1 First Quarter 2002 Benefit E M P LO Y E E ne ws I N S I D E The Script 2 International coverage 4 Canada Pension Plan/Quebec Pension Plan 4 2002 Dental fee increases 5 Employment Insurance premium rates reduced 5 An Introduction to Health Care Spending Accounts 6 e Benefit News 7 Alberta’s Health Information Act could affect pharmacies and pay-direct drug cards 8 Good health is good business That’s the message Danielle Pratt, president Making the connection F or employers, taking the steps necessary to ensure the good health and overall well-being of their employees isn’t only the of Calgary’s Healthy Business Incorporated and author of The Healthy Scorecard, has between customer sensible thing to do, it’s also proving a been taking to business and government satisfaction and profitable course of action. Evidence shows leaders across North America. Through her organizations that make an up-front book and presentations on the subject, Ms. employee well-being investment in the health of employees are Pratt illustrates the connection between great realizing a more robust bottom line. As job- managers, healthy and capable employees, related stress, illness and injuries decrease, satisfied customers and bottom-line productivity, employee satisfaction, customer profitability. loyalty and financial returns rise. see Good health on page 2 Good health continued from page 1 The Script How healthy is your her book, Pratt points to numerous studies A new generation of drugs is causing the health workplace? that show employees are better able to care industry to re-examine how and where Many organizations fail to include employee deliver results that produce satisfied treatments are paid for and delivered. Gleevec™ customers when managers give staff the health as a key component of their business and Tracleer™ are examples of revolutionary new plans. Instead, health is often viewed as a knowledge and skills necessary to do their medications, not only because of their therapeutic qualities, but also because each drug is intended to figure in the expense column—and one to be jobs, the freedom and authority to serve their be self-administered in the patient’s home. These contained. Pratt passionately believes the customers’ needs, and the praise and rewards replace traditional treatments that were invasive that go along with a job well done. health and well-being of employees cannot and available only in a hospital setting. be overlooked or underestimated, and she At the other end of the spectrum, the report Tracleer urges every company to make it a part of “When Workplace Stress Stifles Productivity,” In November, Tracleer was approved for the corporate strategy. When challenged by an by Dr. Martin Shain (Health Canada) and treatment of pulmonary arterial hypertension (PAH), executive who asserts, “It’s not my job to Dr. Jack Santa-Barbara (Corporate Health a rare condition that affects about 2,000 Canadians. keep employees happy. Life is tough. They Consultants), reveals that when those PAH is a chronic, life-threatening disorder that affects the lungs and heart. In its advanced stages, should deal with it,” Pratt concedes, “You’re conditions do not exist, a “toxic work treatment usually requires therapy involving a 24- absolutely right. But it is your job to deliver environment” results. The “toxic work hour infusion pump and an intravenous line superior customer service, and you can’t environment” is characterized by workers implanted through the chest, directly into the possibly do that if your employees are who have high demands placed on them but patient’s heart—a procedure performed and paid for stressed, ill or injured.” low control over how they do their jobs, by a hospital. Tracleer is the first PAH treatment available in the form of a simple pill that can be self- Many ingredients of a healthy work combined with an atmosphere of high effort administered in the comfort of a patient’s home. but low reward. In addition, these environment also contribute to increased This breakthrough home therapy, with an estimated employee performance and motivation. In employees often feel there is little support cost of $48,000 per year, is an eligible expense under drug plans. for them within the organization. In the “toxic work environment” Shain and Santa- Gleevec Tracleer™ is the first of Barbara observed that back pain and heart Gleevec is another recently approved drug a new class of drugs problems tripled, interpersonal conflicts, producing exciting results in the treatment of a called “endothelin receptor antagonists.” mental health problems, injuries and rare form of cancer called chronic myelogenous Patients with PAH have infections increased by two to three times, leukemia (CML), diagnosed in about 500 elevated levels of Canadians each year. Routinely, CML treatment endothelin, a blood substance abuse doubled and even certain includes chemotherapy, radiation therapy and vessel constrictor. cancers increased by five times the normal bone marrow transplant—all invasive, hospital- Tracleer works by blocking the binding of rate of occurrence. Not surprisingly, based procedures. Gleevec, however, is an oral endothelin to its creativity and productivity fell. tablet dispensed at a pharmacy and taken at receptors, preventing home, just like many other pills. Again, this damage to blood If a company is seriously committed to treatment—traditionally paid for from a vessels. building a successful enterprise over the long hospital’s budget—becomes an eligible expense under drug plans. The cost of Gleevec is term, the link between delighted customers estimated at $36,000 per year. Gleevec™ is used to and healthy employees has to be recognized treat people with Tracleer and Gleevec are examples of powerful advanced CML who and built into the organization. Pratt says new medicines that challenge existing health have become “Leaders in these workplaces recognize that resistant to other care delivery methods and offer patients the employee and customer results are not an forms of treatment. chance to lead relatively normal, productive Gleevec targets and either/or proposition…employee and lives. When measured against lost working turns off the enzyme days, disability costs and overall quality of life, that allows cancer customer satisfaction feed off each other.” the new generation of medicines has the cells to grow. potential to provide a better future for all. Sources: Novartis Pharmaceuticals Canada Inc., Actelion Ltd. 2 my personal and family life.” In 2000, benefits. The insurance industry has to You can help create a culture of improvement was noted when 70% of respond by offering value in the form of success in your organization by participants indicated their organizations information and knowledge designed to help encouraging: demonstrated increased efforts, over the plan sponsors manage their employee costs • A sense of belonging and productivity.” Teaching organizations • Meaningful involvement previous year, to help employees balance their how to better understand what their total • Learning and challenge work and personal needs. Still, with 30% health costs are, is a good place to start. • Social and supervisory support ranking their companies’ performances as • Job clarity “below expectations” there’s work to be done. Pratt breaks health costs into three • Pride in workmanship categories: the good (prevention and Those who are up to the challenge will hold a • Balance between job demands and detection), the bad (failure costs) and the employee control over how work is distinct advantage over their competition. ugly (the cost of lost opportunities). By performed Employees need managers’ help to strike a increasing prevention and detection efforts • Balance between effort and reward balance between their personal and through high quality health care and • Suitable physical working conditions professional lives. Satisfying an employee’s education, the severity and frequency of • Overall job satisfaction benefits requirements goes a long way toward sickness can be reduced, which lessens achieving this goal. Successful strategies exposure to the cost of lost opportunity and include health promotion programs to educate drives total health costs down. The province plan members about healthy lifestyle choices, of Ontario recognized this reality when it What employees want with an emphasis on prevention of illness. began offering province-wide flu shots in The value a culture of success brings to Employee assistance programs offer 2000—the only jurisdiction in North employers will be seen as Canada’s confidential, third-party counselling and America to make the flu vaccine available to workforce ages, and the available number of advice on a broad range of subjects including every resident, free of charge. The $44 skilled workers shrinks. In the “War for depression, financial and marital problems, million immunization program seeks to Talent” employees will have more power to childcare and other issues of a personal reduce the impact of influenza on the nature. Early intervention services provide a province’s health care system. choose the position that offers them the most bridge between an employee on disability and in return, and financial compensation will But, as Pratt points out in her presentations, the workplace, easing the often difficult only be part of the equation. Understanding many job-based prevention efforts don’t have process of returning to work after an injury or exactly what is important to employees to carry big price tags. “After all, how much lengthy illness. becomes critical in the struggle to keep the does it cost to sincerely say, ‘I really like the job you did’, every chance you get?” best performers. The total cost of health Sources: The Healthy Scorecard by Danielle Pratt, Dave Hales, Manulife Financial’s vice The Canada @Work™ study by Aon www.healthyscorecard.com, Canada@Work™ by president of Group Distribution, says the Consulting looked at how Canadians cope Aon Consulting (1999, 2000) subject is “bigger and broader than employee with the challenges associated with balancing work, family and life. In both 1999 and 2000, the survey found an individual is most Total Health Costs strongly committed to an organization when The Good Detection costs: customer loyalty and employee commitment surveys, that company recognizes the importance of health risk appraisals. the employee’s personal life. By taking steps Prevention costs: cultural transformation, ergonomic design, work/life to recognize employees have goals and initiatives. responsibilities outside of their working lives, The Bad Direct failure costs: WCB premiums, drug costs, STD/LTD costs. an employer actually builds a stronger, Indirect failure costs: replacement worker and turnover costs. potentially more successful company. The The Ugly Opportunity failure costs: income lost because of poor well-being (lost 1999 survey noted less than half (46.3%) of productivity, quality and creativity from stressed, ill, injured and demoralized workers). The “underbelly” of the health cost iceberg! respondents fully agreed with the statement “Management recognizes the importance of 3 International Canada Pension Plan/ coverage If you’re in the market for home or auto insurance in Quebec Pension Plan Canada, you’ll most likely do one of two things – 2002 rates and benefits consult the yellow pages and start making phone calls or begin surfing the Internet. What can you do The rates for the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) were adjusted as if you need employee benefits for a sales office you of January 2002. This chart compares rates and benefits for 2002 with those for 2001. recently opened in Japan? The Multinational Insurance Arrangement (MIA), Summary of Canada/Quebec Pension Plan Figures 2001 2002 more commonly known as MIA Benefits, is an extensive network of reputable insurance Yearly Maximum Pensionable Earnings $38,300.00 $39,100.00 companies representing more than 28 countries around the world. MIA Benefits member Yearly Basic Exemption $3,500.00 $3,500.00 companies provide an array of comprehensive insurance products and services for employee Employee/Employer Contribution Rate: benefits programs including medical, disability CPP 4.3% 4.7% and life coverage. QPP 4.3% 4.7% The idea for an international insurance network evolved with globalization. In the late 1960s, three Maximum Employee/Employer Contribution/Year: multinational insurance companies agreed to form CPP $1,496.40 $1,673.20 an alliance providing international insurance QPP $1,496.40 $1,673.20 products and services to existing clients. Since its inception, MIA Benefits has become one of the Maximum Monthly Disability Benefit: most renowned and widely respected networks of Contributor: CPP $935.12 $956.05 its kind in the world. QPP $935.09 $956.02 With more than 30 year’s experience, MIA Child: CPP $178.42 $183.77 Benefits’ extensive membership enables clients QPP $56.65 $58.35 whose employee benefits needs go beyond their borders to provide benefits coverage to employees Maximum Monthly Retirement Benefit (at age 65): abroad. Working through a plan advisor, a CPP $775.00 $788.75 company can receive information or a quotation QPP $775.00 $788.75 from MIA Benefits through some of the leading employee benefits providers around the world. Death Benefit: Manulife Financial Group Benefits recognizes CPP $2,500.00 $2,500.00 many clients are active in the international QPP $2,500.00 $2,500.00 business community. As a MIA Benefits member for Canada, Manulife confidently refers Canadian Maximum Monthly Survivor’s Pension: clients with employees in other countries to CPP: Under Age 65 $428.70 $437.99 reliable insurers who operate in those countries. Age 65 and Over $465.00 $473.25 Conversely, Manulife Group Benefits products and QPP: Under Age 45 services are available to international companies • Without dependent children and not disabled $381.26 $389.13 with Canadian-based employees through referrals • With dependent children and not disabled $619.17 $634.18 from MIA Benefits international members. • Disabled, with or without dependent children $644.47 $660.24 For more information about MIA Benefits, visit Age 45 - 54 $644.47 $660.24 www.miabenefits.com. To request a referral or to Age 55 - 64 $690.22 $695.37 find our more about Manulife’s participation in the Age 65 and over $465.00 $473.25 MIA Benefits network, contact your local Manulife Financial representative or visit Cost of Living Adjustment 2.5% 3.0% http://www.manulife.ca/Canada/GB_v2.nsf/Public /MIA. 4 2002 dental fee increases Employment Most provinces have released their Insurance 2002 Dental Fee Guides The average dental fee increases for most provinces are summarized in this chart. premium rates reduced Average Increase Effective Date Alberta 2.97% January 1, 2002 2002 update Human Resources and Development Canada British Columbia 2.32% February 1, 2002 (HRDC) has reduced EI premium rates for Manitoba 3.56% January 1, 2002 2002. Employees will pay $2.20 per $100 of Newfoundland 3.0% January 1, 2002 insurable earnings—down from $2.25 in 2001—while employers pay $3.08 per $100 New Brunswick 3.0% January 1, 2002 of insurable earnings—reduced from $3.15 in Nova Scotia 2.55% February 1, 2002 2001. Ontario 2.5 to 3.0% January 1, 2002 Maximum annual insurable earnings for Prince Edward Island Not available Not available 2002 remain at the 2000/2001 levels of Quebec 3.42% January 1, 2002 $39,000. The maximum benefit payable Saskatchewan 3.35% January 1, 2002 continues to be $413 per week. Northwest Territories Not available Expected April 1, 2002 Since there is no change to the EI maximum Nunavut Not available Expected April 1, 2002 insurable earnings/benefits for 2002, Yukon Not available Expected April 1, 2002 Weekly Income plans that are linked to the EI benefits/insurable earnings will not require benefit adjustments in 2002. Summary of EI figures for 2001 and 2002 2001 2002 Maximum Yearly Insurable Earnings $39,000.00 $39,000.00 Maximum Weekly Benefit $413.00 $413.00 Employee Contribution • Rate per $100 of Insurable Earnings $2.25 $2.20 • Maximum Annual Contribution $878.00 $858.00 Employer Contribution (Without a Registered WI plan) • Rate per $100 of Insurable Earnings $3.15 $3.08 • Maximum Annual Contribution $1,228.50 $1201.20 Employer Contribution (With a Registered WI plan) • Rate per $100 of Insurable Earnings $2.86 $2.78 • Maximum Annual Contribution $1,115.40 $1,084.20 EI savings per employee for employer with a registered WI plan* $113.10 $117.00 *The reduced premium amount applicable to an employer may differ from the numbers shown here, depending on plan design or type of arrangement (for example, sick leave, salary continuation). Plan sponsors can obtain this information through the EI Premium Reduction Program. Visit the EI Web site www.hrdc-drhc.gc.ca or contact your local EI office. 5 An introduction to Health Care Spending Accounts employee, except in Quebec where taxes are payable, deductibles, coinsurance or any H ealth care spending accounts (HCSAs) are an option easily adapted to serve a variety of needs, from both the plan charged by the provincial government. In most plans any money remaining in a other portion of a claim that isn’t automatically paid. However, not all sponsor’s and plan member’s perspectives. member’s HCSA at the end of the first year HCSAs are alike and many variations are Here’s a brief look at what health care can be carried over into the second year. If, possible based upon specific plan design. spending accounts are, how they work, and at the end of the second year funds remain Plan members should always consult their why they’ve proven to be an excellent fit for from year one, the amount is forfeited by the booklets and speak to their plan many large groups of approximately 750 plan member. administrator to clarify which services and members and more. expenses are considered eligible. Power to the plan Usually, claims are paid from the core benefit Tax-free benefits member plan, then submitted to any secondary plan for Think of an HCSA as a special allotment of A health care spending account is an easy coordination of benefits, and finally submitted benefits coverage—money set aside to pay for way for plan sponsors with large, diverse to the HCSA. This makes the most of the health and dental expenses not already workforces to acknowledge plan members’ coverage available and reserves the HCSA for covered by a group benefits plan or a different priorities and needs at different expenses not covered by any other plan. provincial health plan. Each year, a plan stages in life. For example, HCSAs can be Members can monitor the balance remaining sponsor allocates a specific amount of designed to recognize a broader definition of in their accounts by referring to the eligible dependants, making funding explanation of benefits statements attached to available for the health care of a parent who their claims cheques. Progressive insurers, A health care spending requires eldercare, or any other financially including Manulife Financial, also make account is an easy way dependant family member for whom a balance information available via a secure medical tax credit could be claimed. for plan sponsors with Internet site. The HCSA also answers plan members’ large, diverse workforces requests for more control over the kinds of A versatile solution to acknowledge plan services covered, giving them access to the There are many compelling reasons to members’ different long list of supplemental procedures and consider a health care spending account. As services approved by the Canada Customs an enhancement to an existing benefits plan, priorities and needs at and Revenue Agency. Many of these HCSAs become a persuasive tool in the different stages in life. procedures are normally excluded from, or effort to hire and keep the very best only partially paid for by, traditional benefits employees. An HCSA may be used as a key plans. Cosmetic medical and dental surgery, element in an overall compensation plan, coverage to each plan member’s account. treatment for hair loss, laser eye surgery, offering enhanced benefits that contribute This is available for the plan member to draw electric lifts for disabled people and other, directly to the health and well-being of plan upon as required to pay for eligible expenses similar expenses can all be paid for using members and their families. HCSAs may as he or she sees fit. The only limitation to funds in an HCSA. prove useful when moving to a benefits plan coverage is the amount of the allocation itself, with more cost sharing between plan sponsor Applied in conjunction with an existing which acts like a benefit maximum. Oh, and and member, helping to ease the transition. group benefits plan, a health care spending in case you’re wondering, going into account can be used to “top up” core benefits The ability to set and control the cost of the overdraft is not an option! and pay for expenses not completely program is obviously an appealing feature Private health services plans (such as an reimbursed by the plan. These include for a plan sponsor who begins by deciding HCSA) are a tax-free benefit to an amounts exceeding the plan’s maximum how much will be contributed to each 6 …by giving plan members a more active role in the reimbursed claims, also for a period of up to one year; this is “claims carryover.” According to Canada Customs and Revenue e Benefit News Agency rules, plan sponsors must choose Access delayed purchase of benefits, they one carryover option or the other—but Last September’s terrorist attacks in the United States may be encouraged to use cannot offer both. Also, all members must have delayed plans to make high-speed broadband Internet access available to all Canadian communities by their resources wisely and be subject to the same carryover rule or the the year 2004. With an estimated price tag of $4 billion, plan’s tax-free status is jeopardized. this big-ticket item took a back seat to spending on cost-effectively. While plan members appreciate the choice airport and border security in December’s budget. and flexibility that health care spending Internet access has been part of the government’s accounts allow, plan sponsors must realize agenda since it was promised during the last election member’s account, then budgets accordingly. that they relinquish a certain amount of campaign. As the Internet grows by leaps and bounds, There are no renewal, reserve or inflationary providing access to communities currently without influence whenever they pass control and considerations, and by giving plan members service takes on some urgency. costs back to the member. If choosing an a more active role in the purchase of HCSA as a way to reduce overall costs, plan Despite (or perhaps because of ) the fact that traffic on benefits, they may be encouraged to use their the Internet currently doubles in volume every twelve sponsors have to ask, “How much influence resources wisely and cost-effectively. months, the digital divide between those parts of the am I willing to give up? Will plan members world with Internet access, and those without, continues use allocations wisely? When the maximum Plan design and other to grow. Naturally, areas with better infrastructure enjoy benefit is reached, will they be willing to pay increased access and use. Consider North America and considerations for any additional treatments on their own? most of Western Europe have more than 200 Internet HCSA plan design can be very Or will they choose to go without, and if so, users for every 1,000 people, compared to areas like straightforward, but one decision that must India that have about 5 users per thousand. This has how will that decision affect on-the-job be made concerns “carryovers.” At the end implications for a country as big and diverse as Canada productivity and absenteeism?” On the other of a given calendar year, two situations may where nearly 4,800 of 6,000 communities fall into the hand, when viewed as part of a company’s exist. Some employees may have exhausted rural and remote categories. total compensation package, the HCSA the funds in their health care spending Even within areas where access exists, there are still offers plan members an enhanced level of accounts, but have claims on-hand that barriers to overcome. A study on Internet use in England coverage and protection, and gives them the found young, well-educated men with good jobs were haven’t been reimbursed. Others may have chance to play a more active role in more likely to have and use the Internet in their homes. unused money left in their HCSAs. As determining which treatments and services So income, education, age and sex are obstacles to be indicated earlier, remaining funds can be best meet the needs of their families. bridged before the population as a whole can fully carried over for use in the second year; this benefit from the information and opportunities the is called “credit carryover.” As an If you’re considering an HCSA or any other change to Internet makes possible. your benefits program, contact your benefits alternative, plan sponsors may choose to consultant. This article is provided for information In the areas of health and health care specifically, the allow members to bring forward any non- only and is not intended to give legal or tax advice. National Broadband Task force (commissioned by the government to make recommendations on the project) sees potential benefits including easy and rapid access to health information and training, greater collaboration Applied in conjunction between health care providers, improved diagnosis with an existing group through diagnostic imaging, reduced waiting times for medical services and new opportunities in tele-homecare. benefits plan, a health These are exciting prospects, so the challenge will be to care spending account can prioritize these needs, against the need for increased be used to top-up core national security, in the post-September 11 world. benefits and pay for Sources: the Broadband Task Force Web site (broadband.gc.ca), Internet use: the digital divide by Jonathan Gardner and Andrew expenses not completely Oswald, National Geographic Magazine (Dec 2001). reimbursed by the plan. You can read about the National Broadband Task Force at http://broadband.gc.ca Want to “connect” with your fellow Canadians? Try www.connect.gc.ca To explore the world from your computer screen, visit www.nationalgeographic.com 7 Benefit E M P LO Y E E ne ws For further benefit information, please call your usual Manulife Financial Alberta’s Health Information Act contacts. Employee Benefit News is published by: could affect pharmacies and Manulife Financial pay-direct drug cards Group Benefits 25 Water Street South Kitchener, Ontario N2G 4Y5 A lberta’s Health Information Act, which came into effect April 2001, may cause changes in the way plan members use pay-direct drug cards at Alberta pharmacies. Please send your comments and The Act regulates the collection, use, disclosure and protection of personal health information suggestions to the EBN editor, in Alberta. Under the Act, custodians of this information (such as hospitals and pharmacies) by fax: (519) 744-8908, or use the cannot disclose individually identifying information to a third party without first obtaining “contact editor” feature on our Web site. consent from the person involved. As a result, no information relating to a pay-direct drug claim can be transmitted by a pharmacist to a third party (such as an insurance company or a Please Note: pharmacy benefit manager like ESI or Assure) unless the customer has expressed his or her Employee Benefit News is published to provide consent to do so. Consent cannot be implied and must include the following: information about current issues and assist in • an authorization for the custodian to disclose the health information specified in the consent. the decision-making process. Our articles • the purpose for which the health information may be disclosed. however, are not intended to provide medical, • the identity of the person to whom the health information may be disclosed. financial or legal advice and any queries you • an acknowledgement that the individual providing the consent has been made aware of the may have should be directed to an appropriate reasons why the health information is needed and the risks and benefits to the individual of professional advisor. consenting or refusing to consent. • the date the consent is effective and the date, if any, on which the consent expires. Extra! Extra? • a statement that the consent may be revoked at any time by the individual providing it. Plan sponsors and advisors can download Obtaining consent for every prescription filled would involve a massive administrative effort. additional copies of this Employee Benefit In the event pharmacists decide to request payment directly from the customer (to avoid News or previous issues from the transmitting health information entirely), the convenience plan members have enjoyed with Employee Benefit News pages on Manulife Financial’s Web site at pay-direct drug cards will be lost. www.manulife.ca/groupbenefits. Pharmacists and insurance companies are consulting with Albert Health and Wellness to find a Additional copies of this or previous issues are also available in hardcopy. Fax requests workable solution and drug card customers shouldn’t experience any difficulties using their cards to (800) 230-2520. during the review. One possible solution is the inclusion of a consent statement printed on the Ce bulletin est enrolment form and/or the drug card. Others are calling for the government to change its également publié interpretation of the Act to recognize an individual’s use of the card as the equivalent of consent. en français. Watch upcoming issues of Employee Benefit News for further information on this topic. Manulife Financial’s Group Canadian Publications Benefits Web site at Mail Agreement www.manulife.ca/groupbenefits 1460501 provides information about group GCQ102E(02/2002) products and services, industry and The Manufacturers Life Insurance legislative issues and our Regional Company Group Offices.