According to a survey published earlier this year by Sanofi-Aventis Canada, a leading healthcare company, “51% of insurance plan members across Canada said they expect to have access to their benefits after retirement, despite studies showing that only about one quarter of retirees actually do receive benefits from their former employer”.
The good news is that McGill continues to offer post-retirement benefits to retiring faculty and staff and their eligible dependents. When compared with other universities in Canada, the results show that several institutions do not provide benefits to staff or retirees past the age of 65. The package at McGill includes health, dental and life insurance plans. For a full description of the University’s benefit plans, click here: http://www.mcgill.ca/hr/bp/benefits.
It’s about access
Why is access so important? Maintaining access to more affordable group rate arrangements such as the McGill benefit plans can represent a significant advantage over obtaining individual coverage, which can be far more expensive and limiting. Access to this coverage represents a valuable commodity for retirees. For example, did you know that in the McGill plan, coverage for emergency medical expenses incurred outside of Canada continues for all ages, at no extra cost? For some, the extra cost of this coverage through a private plan may be unaffordable or unavailable, especially in the later phases of retirement.
Sustainability
The survey reveals greater awareness by plan members of healthcare costs and a concern for the sustainability of health benefits. It indicates that “plan members are more willing than expected to help their employers with cost-sharing measures to protect their health benefit plans, and that a notable number of respondents appear willing to pay in order to keep employee benefits after they retire”.
At McGill, emphasis continues to be placed on maintaining benefit programs that are valued by the community, that are affordable and sustainable. Earlier this year, the University announced a change in cost-sharing of health and dental post-retirement benefits. For employees retiring after May 31, 2016 who meet the eligibility requirements for post-retirement benefits, cost sharing for the supplemental health plan will be set at 30% for the University and 70% for the retiree. This change represents an additional cost of $15 a month for retirees electing single coverage and $29 a month for those electing family coverage, based on current rates.
Retirees will bear the full cost of the dental plan, representing an increase in premium costs of $22 a month for single coverage and $47 a month for family coverage, again based on current rates. Because the employer portion of the cost-sharing will decrease, retirees will pay less in taxable benefits. Despite these changes in cost-sharing, retirees will continue to have access to the group plans.
Keeping the McGill plan affordable
While paying more is one way to maintain benefits, reducing administrative costs is another. At McGill, there are simple things you can do to help reduce costs to keep the plans affordable. For example, having Manulife deposit reimbursements directly into your bank account can represent a potential annual saving in administrative costs. These savings will help to reduce the cost of the plans, maintain their sustainability, and help to ensure that the plans continue to be relevant to the majority of plan members. Direct deposits are also faster and easier. To register for direct deposits into your bank account visit the Manulife site at:
https://wwwec7.manulife.com/GBPlanMemberUI/Register.aspx
In an upcoming edition of Forum we will focus on the McGill benefit plans’ structure, how the plans are managed and how they are funded. We will provide examples of the role we can all play to contain costs to keep the plan sustainable.
McGill continues to offer one the the best and most comprehensive post-retirement benefits package available. McGill employees are fortunate to be among the one quarter of retirees who can count on receiving benefits when they retire. The goal is to ensure a sustainable plan so that employees in the years ahead can have the same access to benefits when they retire.