While more Canadians are choosing not to retire at age 65, the decision may end up costing more than they expect
There were more than 400,000 full-time and almost 300,000 part-time Canadian workers over 65 years old in 2015, according to Statistics Canada. There are several explanations for this, the most conventional one being the decreased ability among the elderly to live solely on passive income streams such as pensions and annuities. But while such workers have the advantage of getting active income, they may still face the drawback of having to shoulder their own health expenses, according to a piece published by the Globe and Mail.
Citing a recent survey of 170 Canadian employers, actuarial experts John Have and Robert Brown reported that about 25% of employers stop providing health and dental coverage for active employees past the age of 65, 40% stop providing short-term disability, and 87% cut off their long-term disability coverage.
The same survey also indicated that only about a third of employers have formal policies on employee health coverage past 65. “In other words, many health and employment policies have not kept up with the changing demographic reality. And it’s not against the law,” the pair wrote.
Many Canadian employers have stuck to the convention of using 65 as the endpoint for employee health coverage, and since provincial human-rights codes in place have no provisions for such benefits, they’re still within their legal rights to do so.
While the Ontario Human Rights Commission has recommended legislative changes to end benefits discrimination against active employees at 65, they have yet to bear fruit. In the meantime, the commission is urging employers and unions to work within the spirit of labor legislation, but without explicit rules to back it up, such pronouncements lack teeth.
Have and Brown noted that payouts for employee health and dental benefits, especially pharmaceutical costs, tend to decrease beyond 65 because that’s when provincial plans take effect. Insurance companies are also willing to accommodate employers who want to maintain some coverage beyond 65 for active employees, extending the disability benefit by 12 or 24 months.
“From an employer perspective, keeping employees healthy and productive is one of the key goals of having a health plan in the first place. So what are we really saving when employee health benefits are cut off prematurely for senior staff?” they said. “It’s time for governments to protect employee health benefits for our aging workers.”
Related stories:
Tax on employee dental and health benefits being considered
Employers need to remain vigilant on exorbitant drug costs: Empire Life VP
Citing a recent survey of 170 Canadian employers, actuarial experts John Have and Robert Brown reported that about 25% of employers stop providing health and dental coverage for active employees past the age of 65, 40% stop providing short-term disability, and 87% cut off their long-term disability coverage.
The same survey also indicated that only about a third of employers have formal policies on employee health coverage past 65. “In other words, many health and employment policies have not kept up with the changing demographic reality. And it’s not against the law,” the pair wrote.
Many Canadian employers have stuck to the convention of using 65 as the endpoint for employee health coverage, and since provincial human-rights codes in place have no provisions for such benefits, they’re still within their legal rights to do so.
While the Ontario Human Rights Commission has recommended legislative changes to end benefits discrimination against active employees at 65, they have yet to bear fruit. In the meantime, the commission is urging employers and unions to work within the spirit of labor legislation, but without explicit rules to back it up, such pronouncements lack teeth.
Have and Brown noted that payouts for employee health and dental benefits, especially pharmaceutical costs, tend to decrease beyond 65 because that’s when provincial plans take effect. Insurance companies are also willing to accommodate employers who want to maintain some coverage beyond 65 for active employees, extending the disability benefit by 12 or 24 months.
“From an employer perspective, keeping employees healthy and productive is one of the key goals of having a health plan in the first place. So what are we really saving when employee health benefits are cut off prematurely for senior staff?” they said. “It’s time for governments to protect employee health benefits for our aging workers.”
Related stories:
Tax on employee dental and health benefits being considered
Employers need to remain vigilant on exorbitant drug costs: Empire Life VP
