Canadian health benefits cost trend increasing to 7.4% in 2025

We share information with clients, both at renewal and throughout the year, about their plan usage as well as changes happening in the industry.  We even post the average rate changes our clients are seeing on our site at; https://www.mainstayinsurance.ca/our-philosophy/  Below is a recent report of interest.


In Canada, the average health benefits cost trend for 2025 is estimated to be 7.4 per cent, up from five per cent in 2024, according to a new report by Aon.

It found the top medical conditions driving health benefits plan costs are diabetes, autoimmune diseases (excluding diabetes), mental health, lung disorders/respiratory and cardiovascular and weight loss.

https://www.benefitscanada.com/benefits/health-benefits/canadian-health-benefits-cost-trend-increasing-to-7-4-in-2025-report/

Annual Employment Law Update

Each year there are numerous changes to employment law. WV does an annual employers’ webinar to get caught up on the latest challenges and developments, including new case law, legislative changes, new best practices for employers, new litigation strategies, plus more.  Check out the link below for a slide deck from them covering….

Legislative Amendments

i. Employment Standards Act – Minimum Wage

ii. Employment Standards Act – Increased Fines

iii. Employment Standards Act – Temporary Help Agency and Recruiter Licencing iv. Employment Standards Act – Medical Notes

v. Employment Standards Act – Vacation Pay

vi. Employment Standards Act – Job Postings

vii. Occupational Health and Safety Act – Remote Workplaces

viii. Occupational Health and Safety Act – Digital Harassment and Digital Sexual Harassment

ix. Canada Labour Code – Termination Entitlements x. Digital Platform Workers Rights Act

https://wvllp.ca/media/WVLLP-Annual-Employment-Law-Update-Nov-2024.pdf

Canadian Employer Medical Costs to Spike 7.4 Percent in 2025

AON does an annual report estimating future benefit costs, for Canada and the world.  They are anticipating continued higher than normal inflation in benefits.  We track and share our clients average increases each year (on our site below) and generally don’t hit this high a level of inflation.  Our recent history shows average increases of about 4% over the past 10 years, increasing to 4.5% over the past 5 years.

Our Philosophy

We’ll continue to work with you to maintain a fairly priced benefit plan, but wanted to let you know that your employees increasing usage will be a factor in the coming years, and as new treatments are introduced and drugs released.  Reach out any time you’d like to look at makign changes to either enhance coverage or reduce costs.


“In 2025, we anticipate a return to more typical inflationary conditions, with the Bank of Canada projecting that inflation will be well under control,” said Joey Raheb, senior vice president and Canadian national leader for growth and client engagement for Health Solutions at Aon. “However, our concerns are now shifting towards continued economic slowdowns, which will undoubtedly influence plan sponsor decisions. While we have yet to witness a full-scale pullback on spending, employers are exercising caution and continuously reviewing their plans for efficiency in delivery and optimal medical efficacy. Discussions are expected to continue to be dominated by GLP-1 drugs and chronic conditions, such as diabetes. Alongside these, efficient plan design that allows employers to deliver programs that meet the needs of a diverse workforce while keeping costs sustainable will remain a focal point.”

The top medical conditions driving medical plan costs in Canada are:

  1. Diabetes
  2. Autoimmune Diseases (excl. Diabetes)
  3. Mental health
  4. Lung disorder/respiratory
  5. Cardiovascular & Weight loss

In its global report, Aon forecasts medical plan costs across the world will rise on average 10.0 percent in 2025, this figure is just shy of the projected increase for 2024 of 10.1 percent, which represented the highest increase forecasted in 10 years.

READ THE REPORT

Current and coming soon employment law changes in Ontario!

For Ontario Employers, the following clip from an E2R newsletter may be of interest.

The Working For Workers Five Act, 2024 has received Royal Assent.  Most of the new legislation makes common sense (clean washrooms?), but sharing it in the off chance any of these may apply to your firm. 


  • Sick notes: Employers are now prohibited from requesting a medical certificate in relation to the sick leave provisions under the ESA (the entitlement still being three unpaid days). Note: Organizations like the Canadian Medical Association are lobbying for changes that would put even greater restrictions on an employer’s right to request medical validation of absences due to illness.
  • Fines go up: The maximum fine for an individual who violates the ESA has gone from $50,000 to $100,000.
  • Telework/remote work location in private residence: This is a significant one, as there was some debate on this, but it is now clear that the Occupational Health and Safety Act (OHSA) applies to telework/remote work performed in a private residence. However, such locations will not be deemed an ‘industrial’ establishment.
  • Enhanced definition of Workplace Harassment and Sexual Harassment: The definition now captures harassing behaviours that occur virtually through the use of information/communication technology.
  • Electronic Posting under OHSA: Employers may now satisfy the ‘posting’ requirements related to the joint health and safety committee, the workplace health and safety policy and a copy of the OHSA (and explanatory materials) itself in a readily accessible electronic format (we are uncertain how this will impact the bulletin board industry!). The obligation to post this in English and the majority language of your workplace continues.

Coming soon:

  • Clean Washrooms for Workers: Employers/constructors will be required to ensure that washroom facilities provided for worker use are maintained in a clean and sanitary state and they will be required to keep a cleaning log/records in this regard.

There are also amendments to the Workplace Safety and Insurance Act, 1997 with regard to wildland firefighters/investigators coverage for PTSD and provisions coming soon on coverage for primary-site skin cancer for firefighters/investigators with at least 10 years of pre-diagnosis service.

If you would like to discuss any of the above with regard to your business in greater detail, we recommend reaching out to speak to an e2r™ Advisor. We are here to help.

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