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.
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:
- Diabetes
- Autoimmune Diseases (excl. Diabetes)
- Mental health
- Lung disorder/respiratory
- 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.