01 Mar Are You Aware of the Hidden Liabilities in Your Group Benefits Plan?
Posted at 08:00h
in Benefits Insight
There are many opportunities for liabilities to hide within your group benefit plan. These liabilities range from benefits with no maximums to prescription drugs that are used to treat symptoms which may lead to the future diagnosis of a chronic disease – resulting in ongoing claims for high cost speciality drugs.
Let’s take a closer look at few examples.
1.
Accidental Dental benefits usually have no maximum
This is included as part of the health benefit, where standard coverage allows for unlimited costs for the repair or replacement of teeth damaged as the result of an accident. This includes if the accident is due to playing sports – by a member, their spouse or dependent child. Treatment of accidental dental injuries cost thousands of dollars and can take months to be completed.
2.
Unlimited semi-private hospital coverage
The cost of the average semi-private hospital stay is in the $260 to $300 range (depending on the location of the hospital). If a member or a dependent has an serious illness or injury, they could be hospitalized for an indefinite period.
In the above examples, claims that are paid under these benefits are included in your health claim experience and will be part of the insurance company’s renewal calculation.
It is a fact that premium needs to be set to support claims plus expenses. When paid claims plus expenses exceed premiums, it will lead to rate increases. Reducing hidden liabilities is within your control.
3.
Unlimited prescription drug coverage
The hidden liability in the drug benefit is doubled when you consider that when most Canadians start feeling the signs and symptoms of what will later be diagnosed as a serious disease – they are prescribed a drug(s) to treat those signs and symptoms. As a result, the cost of prescription drugs claimed under your plan can increase dramatically in a very short time. Armed with this information, it is possible to detect future liabilities. A few examples include:
- Vimovo – a combination of anti-inflammatory and proton pump inhibitor, this drug is used to treat the signs and symptoms of rheumatoid arthritis and osteoarthritis with an annual cost of approximately $3,000. However, drugs to treat these diseases once diagnosed are upwards of $60,000 annually.
- Levodopa – is a relatively low-cost drug that is generally first prescribed to control the symptoms of Parkinson’s Disease. A single drug taken to treat this progressive disease once diagnosed is upwards of $30,000 annually – and more than one drug is required, with dosages that increase regularly which raises the overall cost to treat this condition.
- Betaseron – this is a disease-modifying drug commonly prescribed for Multiple Sclerosis symptoms before they require more progressive treatment – with costs that will be approximately $70,000 annually.
In these examples, the drugs used to treat signs and symptoms will not likely appear in the ‘top ten’ drug list that you see in your annual renewal as the costs are not in the high range. Auditing to uncover this information requires a thorough analysis.
At JRP, a liability audit is part of all our quarterly reviews. We not only find the hidden liabilities, we deliver you solutions, so you can take control of your Group Benefits Plan.
Isn’t it time to understand the hidden liabilities in your plan? Contact JRP today, to learn how you can adapt your approach to benefits. The Future of Benefits Starts Here.
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