Use company culture to avoid cutting benefits
How we saved a drug plan for employees who really needed it
How do you keep your employees’ benefits while facing skyrocketing renewals?
It’s a question many employers are forced to face and was the exact dilemma an Ontario community services organization was dealing after GEM Benefits took over their account in 2016.
This community services organization is full of dedicated care-providers. They do important care work through services and programs for marginalized groups facing end-of-life, as well as living with acute and chronic conditions. These hard-working people face a lot on the job and work very hard, while having lower than average compensation.
With the high demands of their work, and their level of compensation, a full spectrum benefits plan is key for their wellbeing. These employees are high users of their benefits and drug plan.
But despite the high usage of their plan they have a tight budget to work with. This put them in a bind when facing steep renewal increases.
They faced a renewal rate increase that would force them to cut their coinsurance from 100% to 80%.
A new approach
Normally cutting back on benefits would be the first approach in this situation. However, when GEM Benefits was given the opportunity to take over their account, we consciously wanted to make a difference in these peoples’ lives. We needed to get these employees the benefits they deserved within their budget and we weren’t afraid to put in the work and get creative.
So, we sprang into action and took the time to get to know the organization by learning about their culture, employees’ attitudes and budgets. The thing that stuck out to us on our deep-dive of their organization was how appreciative they were as a whole. The people that work for this organization are very compassionate, creative and willing to collaborate to keep their benefit costs down.
Because we understood the organization’s culture we had the crucial information required to tackle issues in their benefits plan at a deeper level.
We knew a high-priority part of their plan to keep from cuts was their highly used drug plan. So, we refused to put on caps, introduce higher deductibles or increase coinsurance costs on the employees. Instead, we arranged for the carrier to adjudicate drug claims in a new way.
The new system
With the same administration costs as the old system, the new one we created has three layers that provide the employees the coverage they deserve.
The first layer allows for the immediate payment of occasional acute drugs (such as antibiotics) from any local pharmacy. We achieve this through using a pay direct drug card. The payment through the card is immediate and completely covers the total cost of the drugs.
In the second layer, we use a mail order delivery system for maintenance drugs called MaintainRx. This means claims are no longer from a brick and mortar pharmacy and are instead from an electronic pharmacy. This provides the organization’s employees with the convenience of having their drugs continuously delivered anywhere they want, avoids extra dispensing fees and lowers ingredient costs. Also, the program provides discounts on vitamins, cosmetics and other items offered through a typical pharmacy and delivers them anywhere free of charge.
Another bonus of the second layer is the carrier offered the organization’s employer a cash-back incentive on the group’s drug spend.
The third layer is a drug formulary called FormuCare. This formulary includes any drug requiring a prescription unless it is a drug costing more than $10,000 per treatment. Anyone who is on such a drug is able to find full payment for it using an adjudicator/navigation service which steers the payment either to a government plan (such as Trillium) or the drug manufacturer’s own program.
Making it happen
But just creating a system isn’t enough. We wanted to ensure that the organization’s employees really understood how to use the new system and that the transition for them would be smooth. We were there every step of the way.
After six employee meetings where we were hands on with anyone who needed help, and coached them through the new system, the organization’s employees were up to date and well equipped to use the new system. But, we welcome more meetings for onboarding new employees and ongoing communications.
Just three months after implementation the organization experienced a 20% reduction in drug cost claims.
Additionally, we are always designing new solutions for our clients. The appreciate and creative senior leadership, as well as the commitment and engagement of all the staff, made the new triple-layer plan feasible.
This is just one example of the many different scenarios we have handled. Find out how we can get to work for you.