What’s the Latest Employee Benefits Trend?

Jan 25, 2016

When it comes to selecting only one of the latest employee benefits trends, it becomes a difficult task because there are so many!

Some of the latest trends include:

  • continued impact of high cost drugs on extended health care pooling rates;
  • introduction of the latest high cost, potentially high volume biologic drug;
  • implementation of the Ontario Retirement Pension Plan (ORPP);
  •  

  • recent amendments to pension legislation in Alberta and British Columbia;
  • organizational impact of mental health; and
  • increasing prevalence of health and wellness programs in the workplace.

For this blog, the employee benefits trend I have selected revolves around the new class of cholesterol drugs known as PCSK9 Inhibitors. This new class of cholesterol lowering drugs target patients with chronically high cholesterol levels and/or those who have already had a cardiovascular event.

The manufacturer of one these drugs, Amgen, estimates that only 1.32% of the population would require them and have priced their product at $7,236.36 per covered patient per year. This translates to an additional $10,000 per year in claims for the average 100 employee group, compared to the current average cholesterol spend of roughly $3,000.

Compounding the issue is that many plan sponsors have an extended health care stop loss limit (the level at which the insurer starts to provide true insurance) of greater than $10,000. Since the per patient annual cost falls below this limit, most of these dollars will end up being the responsibility of the plan sponsor, which will lead to higher rates at renewal.

This is in comparison to last year’s blockbuster Hepatitis C cures, where the majority of these costs, (when not picked up by a provincial plan), would actually be the responsibility of the insurer rather than the plan sponsor. In this case, extended health care pooling rates would be affected (another employee benefits trend as noted above) but the short term impact to the plan sponsor is reduced, as the insurer pools these claims across their block of clients.

At this point, it is still unclear as to whether Amgen’s numbers will be accurate and whether the provincial formularies will add these drugs to their list of covered drugs. The effect on your plan, therefore, is difficult to predict, but a worthwhile trend to follow in the industry news.

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