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Press Release

Investing in health: Canadian companies move to enhance health care and wellbeing despite impact of rising drug costs

Willis Towers Watson survey also finds renewed employer focus on virtual care and mental health

September 9, 2020

Health and Benefits
Risque de pandémie

TORONTO, ON, September 9, 2020 — In response to the COVID-19 pandemic, many Canadian organizations are making enhancements to their health care and wellbeing programs, though rising drug costs are affecting budgets, according to two new Willis Towers Watson (NASDAQ: WLTW) surveys on health care costs and the business impact of COVID-19 on benefits in Canada. The surveys found that more than half of employers (53%) are enhancing wellbeing programs, while 27% plan to make changes to improve health benefits. This comes at a time when drug costs, the main driver of plan sponsor health care costs, have trended up 2.4% over the past year, and the cost of pooling protection to mitigate the risk of high-cost drugs continues to increase.

“Despite the significant challenges facing employers and employees this year, it is encouraging that most organizations are taking steps to either maintain or enhance their employee health and wellbeing programs,” said Christiane Bourassa, Canadian Innovation leader, Health and Benefits, Willis Towers Watson. “Employers are doing what they can to support their workers and their families with a focus firmly on the future. It’s a testament to resiliency and the critical importance of these programs that only 4% of our survey respondents have reduced or are planning to reduce health care benefits during these difficult times.”

Supporting physical and emotional health is a top priority for most employers as 57% believe COVID-19 will have a moderate to large negative impact on employee wellbeing. In response, nearly half (45%) are offering or expanding access to virtual mental health services, while 60% expect mental health services and stress management to be one of the organization’s most important benefit priorities over the next six months. In addition, 34% are increasing access to telemedicine, with an additional 40% planning or considering doing so. Maintaining physical health is also important with 70% of employers offering new easy-to-implement technology-enabled solutions, such as virtual workouts, to support employees who work from home. Another 13% are planning or considering these solutions. More than half (58%) are promoting healthy nutrition and weight management for at-home employees, while 18% are planning or considering adding programs in this area.

Encouragingly, employers are also working hard to avoid one-size-fits-all solutions. Despite the pressure for urgent responses, 57% are using assessments to understand the wellbeing needs of specific cohorts of their employee population, and another 16% are planning or considering similar segmentation. Employers are also recognizing the importance of the manager’s role in remaining connected with employees, with 56% providing manager training on engaging a remote workforce and another 27% planning or considering similar action.

Regarding the health and benefit cost implications of COVID-19, the survey results suggest a mixed picture. Most employers expect some level of pandemic-related increase to sick leave costs (65%) and group disability costs (59%); however, only 37% expect overall health and benefit cost increases, while 31% expect reduced costs due to a decline in access to health care and dental services during the crisis.

“The cost implications of the COVID-19 pandemic cannot yet be fully measured,” cautioned Dawn Noordam, senior director, Health and Benefits, and leader, Benefits Marketplace Canada. “However, as organizations are transitioning to the next phase and with ongoing economic uncertainty, we expect that cost management will certainly be a key consideration. Employers will want to review specialty drug use, which typically represents a third of drug plan costs, to identify cost control strategies. Similarly, they will be well served to also examine paramedical practitioner coverage, the second biggest health care cost driver, and one that often incurs double-digit annual increases, to ensure it aligns with the health, wellbeing and business objectives of our new work-from-home reality.”

About the surveys

A total of 148 employers participated in Willis Towers Watson’s COVID-19 Benefits Survey in June 2020. Respondents employ more than 800,000 Canadian employees.

The 2020 Financial Benchmarks Survey was conducted in March 2020 and includes participants from 223 Canadian organizations representing more than 500,000 employees across all industries and sectors.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.

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