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Checking in On Our 2022 Group Insurance Trends and Predictions 

By: Benefits by Design | Tuesday July 19, 2022

At the end of each year, we publish our group insurance trends and predictions for what’s on the horizon, like we did in 2017, 2018, 2019, 2020, and 2021. We’re just over halfway through 2022, and we think it’s time to check in on those predictions we made for this year. We’ll give each of our 2022 group insurance trends predictions an accuracy score to see how things are shaping up. 

Prediction #1: Continued Impacts of COVID-19 

COVID-19 continues to impact Canadians’ day-to-day, affecting employers, employees, Insurers, and Advisors in a variety of ways. Although restrictions have decreased, the industry is still dealing with many of the questions we posed at the end of 2021, including: 

  • Will employers require a COVID-19 vaccine in order to return to work?  
  • Can employers terminate employees who choose not to get vaccinated?  
  • Will work from home be here to stay? Can their workplace accommodate it?  
  • How can employers support employees’ mental health during this time?  
  • Staffing challenges, including acquisition and retention  
  • Are employers effectively using their benefits plan as a recruiting tool? 

Prediction Accuracy: 10/10 (this one was kind of a “gimme”) 

The impacts of COVID-19 continue to be felt across the industry with little indications of going anywhere, as we prepare to enter a seventh wave this summer. 

Prediction #2: Continued Mental Health Crisis (and More Emphasis on Solutions) 

Over 40% of Canadians were worried about their mental health heading into 2022, with COVID-19 and the economy sited as the largest contributing factors. Unfortunately, this is nothing new. Declining mental health has been a fixture of our trends and predictions posts since 2019.  

The mental health crisis remains an issue Canadians are struggling with as they grapple with a variety of issues, including: 

Meanwhile, although group insurance solutions like Employee Assistance Programs (EAP)s remain viable options to combat poor mental health in the workplace, we haven’t seen the notable increase in uptake that we anticipated.  

Prediction Accuracy: 7/10 

Mental health remains top of mind for the industry, but we’re taking a few points off since there’s no mention of economic impacts in our predictions, nor a noticeable increase in mental health solution uptake (yet!).  

Prediction #3: Increasing Long Term Disability (LTD) Insurance Incidence Rates 

Admittedly, it’s a bit too early to tell if this one has been proven right thus far. However, some of the major driving forces that would influence LTD incidence rates are present, and so we can make some guesses with a good degree of confidence. 

The two factors we mentioned at the end of 2021 were mental health stressors — which we’ve already discussed have continued and worsened — and COVID-19’s impacts on the Canadian healthcare system. Both of which have continued, and in many cases gotten worse, over 2022. Much of Canada’s provincial healthcare systems are bogged down in high wait times for surgeries and consultations or experiencing critical staffing shortages.  

Lastly, interest rates have indeed risen in 2022, likely with more increases still to come. As a result, Insurers may see greater interest generated from their reserve funds to pay claims, which could lessen the burden of LTD rates in the future. 

Prediction Accuracy: 9/10 

Although much of the impact on LTD incidence rates still remains to be seen, the ongoing mental health crisis and the issues with healthcare paint a pretty clear picture in our view. 

Prediction #4: Impacts of Inflation and Cost of Service Increases Will be Felt 

Canadians reading this will likely already know this just from a glance at their grocery or gas bill, but the consumer inflation rate has increased substantially in 2022. Inflation rose by 7.7% in May — the largest yearly increase since January 1983, affecting Canadians’ ability to meet day-to-day expenses

How this inflation will trickle down into healthcare costs and what the impacts will be, only time will tell. However, it is reasonable to note that it seems unlikely that healthcare practitioners like dentists, chiropractors, and physicians are immune to these effects as price increases trickle down to the consumer and to their benefits plans. 

Prediction Accuracy: 7/10 

Inflation’s effects on Canadians’ everyday lives is obvious (just look at the gas meter), but its effects on the cost of services and its impact on renewals will take time to reveal itself.  

Prediction #5: The Rise of High-Cost Drugs Will Continue 

High-cost drug claims continue to impact benefits plans as expected, which can lead to challenging renewals for benefits plans that aren’t built to take the hits. Plan sustainability over the long term is something we aim to build into our own benefits plans to help mitigate this, along with cost-effective solutions like our Catastrophic Hybrid Plan

Prediction Accuracy: 9/10 

High-cost drugs remain a significant factor in Canada’s employee benefits space, leaving the long-term sustainability of many plans in jeopardy.  

Prediction #6: Competitive Job Market Will Lead to Continued Hiring and Staffing Challenges for Employers 

In September 2021, a new survey found that 84% of Canadian companies expected to face hiring challenges over the next year. Likewise, a similar Maru Public Opinion Survey found that 46% of small business owners said it’s more difficult to find and retain employees than before COVID-19. One of the most significant changes we’ve seen is a shift in workers’ expectations, with greater emphasis being placed on remote work, work-life balance, and benefits. 

In our previous post, we highlighted the importance of benefits plan as the “carrot on the stick” to attract and retain top talent, and that’s still very much the case.  

Prediction Accuracy: 8/10 

The competitive job market is still very much a factor in 2022. Proactive employers will want to regularly evaluate their benefits offerings to ensure they’re still doing their job — keeping employees happy and healthy, yes, but also attracting new employees and retaining active ones. 

Prediction #7: Employers Will Prioritize Benefits and Perks for Employee Retention and Acquisition 

The many factors affecting working Canadians and employers in 2021 and 2022 led us to believe that employers would place greater importance on benefits offerings to retain and attract employees.  

According to a new survey by Mercer, 70% of large U.S. employers are planning to improve their benefits plans in 2023 to enhance their attraction and retention efforts. It is likely a similar trend will find its way into the Canadian market, in time. Interestingly, while small employers were less likely to make enhancements to their plan, more than half (53%) are still planning to do so in 2023. 

Prediction Accuracy: 6/10 

We got the trend right, but it looks like we were ahead by a year. It’s likely this trend has already started and will continue into 2023. 

Prediction #8: Increased Focus on Financial Wellness and Flexibility 

Canadians are prioritizing financial wellness in 2022 amidst rising inflation and the cost of services. 55% of Canadians believe their overall wellness is directly related to their finances, while 75% indicate that financial wellness is a priority for them. 

Whether employers and working Canadians will hop on board this trend and embrace financial wellness and literacy remains to be seen. However, there’s enough compelling evidence for us to say that Canadians are indeed concerned about finances. Let’s hope that translates into financial wellness initiatives, incentives, and programs for workplaces looking to improve employees’ mental and financial wellbeing. 

Prediction Accuracy: 7/10 

Finances are indeed on the brain for Canadians in 2022, but there’s little evidence to support an increase in financial literacy programs and incentives in workplaces. Maybe next year! 

Prediction #9: Remote Work Will Continue to Bring Changes to Workplaces 

Conversations around remote work have continued in 2022 and employers and employees still seem to be at odds about whether it should be made permanent. Meanwhile, the percentage of employees working remotely is decreasing slightly as pandemic restrictions are lifted.  

On the flipside, employers who are embracing remote and hybrid work opportunities may be at an advantage when it comes to hiring, as potential candidates are no longer limited to a geographical location (and working Canadians are still prioritizing remote work for now). 

Prediction Accuracy: 8/10 

Workplaces and its workers continue to view remote and hybrid work differently, and although the conversation is ongoing, there’s no denying that it has changed the way Canadians work — possibly forever. 

Prediction #10: We’ll Need to Adapt to New Technologies 

The shift to remote work forced employees home and left companies scrambling. Now, those who want to continue offering it as an option will need to adapt to new technologies. Yes, this means video conferencing platforms like Zoom, but it also means hardware upgrades for improved connectivity, required security upgrades, and cloud and data solutions to store information securely. 

Prediction Accuracy: 7/10 

Many Canadian companies are already making the necessary changes, but there’s more work to do. The need for adapting to new technologies is constant, but remote and hybrid work have increased the importance. 

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