We’ve seen client rate increases be higher in 2023 than we’ve seen in decades and higher than I’ve seen in the 17 years I’ve been tracking and sharing on my website.
With drugs trending up about 6.3%, dental fee guides (in Ontario) up 8.5%, the aging effect on pooled benefits (life and LTD) at 8% or more, it’s really no wonder. Add in the fact that many people are still playing catch up on getting work done (dental, vision and parameds), that was delayed due to the pandemic, and it was almost expected. The article below (from January) identified this before the year even started.
Most clients are glad to see staff making use of the plans. Many are increasing their core benefit offerings, some are adding Health Spending Accounts (HSA’s) and others are increasing existing HSA’s to keep up with inflation. If times are tight and you’re looking to trim costs, or are interested in looking at cost effective ways to enhance plans, please reach out.
The cost of employer medical benefits in Canada are forecast to rise 7.5 per cent in 2023, according to the 2023 Global Medical Trend Rates report from Aon plc.
“As employer-sponsored medical plans become an ever-increasing part of an organization’s employee compensation, pressure is growing to accurately forecast and manage future costs,” the firm states in its announcement about the report’s publication. “Employers need to understand the factors driving costs to better navigate volatility and make more informed decisions.” They add that the rates discussed are not meant to represent healthcare costs as a whole.
The global average medical trend rate for 2023 is expected to be 9.2 per cent, the highest trend rate recorded since 2015. In 2022 the global average sat at 7.4 per cent in 2022.
In Canada, the annual medical trend rate was seven per cent in 2022, rising to 7.5 per cent in 2023.