01 Aug Group Benefit Plans Can Expose Employees to Financial Hardship
The structure of many Group Benefit Plans expose employees and their families to financial hardship. This is a reality that may surprise you.
Does your benefit program offer a prescription drug benefit where employees are reimbursed 80% with no maximum? Many brokers will tell you that this option is best for your employees, because they can get whatever prescriptions they need with no limits.
Although 80% reimbursement on any medication may sound enticing, please consider the following scenarios:
Scenario One:
Frank comes into your office to share the news that his spouse has been diagnosed with multiple sclerosis and will need to take a drug that costs a minimum of $72,000 a year. Frank has realized that he will be out-of-pocket almost $15,000 due to the 20% co-pay. He emotionally asks if any overtime work is available, telling you that he is in the process of re-mortgaging his house to help cover the cost of his wife’s medication.
Scenario Two:
Your bookkeeper, Susan, has been diagnosed with breast cancer and learns that the prescription medication she needs to take will cost her $6,000 a month due to the 20% co-pay. She charged the first month of this cost to her credit card, before realizing she cannot actually afford to continue this expense and decides to forgo further treatment.
Unfortunately, these circumstances happen far too often in Canada. With proper planning, these situations can be mitigated. When you structure your prescription drug benefit plan properly, members like Frank and Susan would only need to pay a moderate quarterly deductible under their provincial drug benefit program. They could also apply for assistance from drug manufacturers through Patience Assistance Programs.
According to the Canadian Medical Association, 10% of Canadians do not fill a prescription because they are too expensive, and many Canadians stop taking the drugs they need because they cannot afford the out-of-pocket cost.
It is time to realize that traditional drug programs are deficient. They leave organizations and their members exposed to unforeseen risk and out-of-pocket costs – doing nothing to facilitate proper care to determine whether a member is better off claiming through a private plan or through provincial programs.
We found a solution to this problem more than a decade ago. Our solutions are now more relevant than ever due to the escalating cost of prescription drugs.
It is time to think differently about the benefits you offer in your Group Benefits Program. After all, this is YOUR benefits program.