Economic crisis and mounting drug prices have pressured advisors to slash costs and develop cost-sharing initiatives to keep clients from canceling benefit plans.
Economic crisis and mounting drug prices have pressured some advisors to slash costs and develop cost-sharing initiatives to keep clients from canceling benefit plans.
“There’s a double whammy occurring,” said Robert McCullagh, a financial advisor at Calgary-based Benefit Planners Inc. “You’ve got considerable and significant pressure on pricing on drugs as they continue to escalate. Then you have the economic pressure on employers when they’re facing uncertainty and (reduced profitability for) their business.”
On the ground in Alberta, things may be even worse than they appear. “There are a substantial number of layoffs going on every day,” he said. “They’re not layoffs that make the paper. They’re layoffs that are occurring at small companies. A lot of people are in transition right now.”
It’s led to some clients contacting McCullagh to work something out. “We’ve received some letters from clients asking us to look at the fact that they’ve had to reduce their pricing and they’d like us to reduce our pricing and we explore that with them,” he said.
McCullagh has taken a proactive approach to get ahead of the problem – contacting all his business owners to talk to them about how the year looks, their staffing plans and what can be done to assist them with the cost of plans.
“A crisis is a terrible thing to waste so it’s a good opportunity for us to revisit some of the plans,” he said. “We’ve met with several businesses and discussed options. Some of those options are plan realignments where we’ve changed some of the benefits. The second consideration to that is looking at cost sharing as a possibility and moving forward, some of the companies that we’re working with have partner relationships.”
One in particular, when you fill your prescription at Costco, so a major brand supplier for pharmacy they actually will give you 100 per cent coverage on a 90 per cent claim base. We can reduce a program from 100 to 90 per cent and they can fill it at Costco and they can get the equivalent of 100 per cent fill. There’s some things like that are creative on behalf of the pharmacy network plans that allow us to do some planning and have some health savings.
“There’s a double whammy occurring,” said Robert McCullagh, a financial advisor at Calgary-based Benefit Planners Inc. “You’ve got considerable and significant pressure on pricing on drugs as they continue to escalate. Then you have the economic pressure on employers when they’re facing uncertainty and (reduced profitability for) their business.”
On the ground in Alberta, things may be even worse than they appear. “There are a substantial number of layoffs going on every day,” he said. “They’re not layoffs that make the paper. They’re layoffs that are occurring at small companies. A lot of people are in transition right now.”
It’s led to some clients contacting McCullagh to work something out. “We’ve received some letters from clients asking us to look at the fact that they’ve had to reduce their pricing and they’d like us to reduce our pricing and we explore that with them,” he said.
McCullagh has taken a proactive approach to get ahead of the problem – contacting all his business owners to talk to them about how the year looks, their staffing plans and what can be done to assist them with the cost of plans.
“A crisis is a terrible thing to waste so it’s a good opportunity for us to revisit some of the plans,” he said. “We’ve met with several businesses and discussed options. Some of those options are plan realignments where we’ve changed some of the benefits. The second consideration to that is looking at cost sharing as a possibility and moving forward, some of the companies that we’re working with have partner relationships.”
One in particular, when you fill your prescription at Costco, so a major brand supplier for pharmacy they actually will give you 100 per cent coverage on a 90 per cent claim base. We can reduce a program from 100 to 90 per cent and they can fill it at Costco and they can get the equivalent of 100 per cent fill. There’s some things like that are creative on behalf of the pharmacy network plans that allow us to do some planning and have some health savings.
