“One of the ways we’re able to compete is that we target those job seekers who are looking for a career, versus a job, a full-time permanent role with benefits and vacation, not a short-term pay bump,” said Katie Gibson, director of people, culture and diversity, and Shannon Langsford, director of human resources, operations, at Toronto-based Mevotech.
However, as employer-sponsored medical plans become an ever-increasing part of an organization’s employee compensation, there is growing pressure to accurately forecast and manage future costs. The overall market medical trend rate is an important component of overall spend, Aon pointed out. Employers have to understand what factors are driving costs to better navigate volatility and make more-informed decisions.
The trends Aon is seeing come at a time where volatile economic conditions dominate the landscape, observed said Carl Redondo, global benefits leader at Aon.
“Although there is still a fair amount of uncertainty on how long global inflationary pressures will persist, it is clear from the locations surveyed that the expectation around employer-sponsored medical plans is that the medical trend rates will see a sharp rise in 2023 – and employers need to consider several factors as they maintain the resilience of their workforce,” Redondo said in a statement.
The top five medical conditions driving medical plan costs in Canada are:
The role of COVID-19 is playing a factor in medical plan costs.
“The effects of long COVID-19 and other COVID-19 related illnesses and comorbidities (i.e., mental health) continue to evolve, while the Canadian market remains conservative in its reaction to pricing,” said Joey Raheb, senior vice president and Canadian national leader for growth and client engagement for health solutions at Aon.
“We expect a return to typical medical inflation driven by Canadian plan sponsors taking a more preventative and pragmatic approach to managing plan spend in 2023.”