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The Employer’s Role in Preventative Healthcare & How it Impacts Benefits Plans

By: Benefits by Design | Tuesday September 21, 2021

Updated : Monday January 29, 2024

If you could decrease the risk of serious illness, disability, or injury for yourself and your employees… wouldn’t you? 

That’s what preventative care can provide. But what is the employer’s responsibility in all of this? Working Canadians agree — employers are expected to play a role in keeping employees healthy. Preventative care is an effective method in doing so, and is significantly advantageous for the employer in the long term through cost-savings, employee happiness, productivity, and more.

What is Preventative Healthcare?

Preventative healthcare aims to keep people healthy in the long term and decrease the burden of serious and costly illnesses, diseases, and risk factors through healthy habits and lifestyles that promote overall health.

You can think of preventative healthcare like spending money on fixing an older, potentially leaky roof now, instead of doing nothing and spending heaps on replacement and repairs from water damage when it finally breaks.

Preventative Health Care in Benefits Plans

Preventative healthcare is a part of many of the most common and sought-after employee benefits coverages, including:

Health / Wealth / Happiness

Health Care Spending Accounts
Group RRSP Referral
Personal/Wellness Spending Account

Here’s an example of some of the coverages we categorize into the “Promote” part of benefits. These coverages keep employees healthy over the long term through access to care, professional practitioners, prescriptions, and health and wellness products that promote an active lifestyle.

How Preventative Healthcare Impacts Benefits Plans

Think about it this way — few companies get into business with the intent not to be around in ten or twenty years, and employees are going to be driving your success forward. In which case, an employee benefits plan is a long term investment in the overall health of your employees and your company, right?

That’s why we’re talking about preventative healthcare. It can have a significant impact on an employee benefits plan over the long term. Here’s how:

Frequency of Claims

Employees with generally unhealthy or inactive lifestyles make more frequent, larger claims on benefits plans. Both frequency and cost of claims have a great impact on benefits plans premiums, so keeping employees healthier also keeps costs down for both employers and employees. 

Severity of Claims

Unhealthy or inactive employees are also more prone to chronic conditions like obesity, diabetes, heart disease, stroke, and even cancers. These chronic conditions can lead to increased claims activity for coverages like Critical Illness and Disability Insurance. Likewise, expensive prescription medications may be required, hitting your benefits plan and impacting rates further.

What’s more, those absences from work impact your business and your employees in more ways than one. You’ll lose valuable employees and their knowledge while they are on leave for recovery.

Preventative Healthcare Lowers Claims Frequency and Severity

Preventative healthcare isn’t about spending less on benefits, or even keeping employees from making claims (that’s what the plan is for after all). Instead, it’s about encouraging employees to lead healthy, active lifestyles. The positive impacts on a benefits plan is a bonus.

What You Need to Submit Medical Claims Under a Group Insurance Plan

How Can Employers Encourage Preventative Healthcare?

Employers can encourage healthy and active lifestyles for employees without breaking the bank, and the best way to do this is to lead by example. Here’s a few ideas:

Whether your employees work remote, hybrid, or on-site, there are always ways to encourage employee health and wellness.

Reimagining Health and Wellness for a Remote Workforce