The coronavirus is a challenge unlike anything most employers have faced before. The challenges are even more unique in the multi-employer trust fund world. The pandemic has brought major changes to both retirement and health benefits, including defined benefit pension plans, prescription drug benefits, mental/behavioural health offerings and short-term disability benefits.
A new International Foundation report Impact of COVID-19 on Pensions and Benefits in Canada – June 2020 examines what employers are doing as their organizations adapt to the new world. The following findings are based on the 93 responses by multi-employer trust fund respondents.
Defined Benefit/Target Benefit Pension Plans
About four in five (78%) responding funds have a defined benefit (DB) or a target benefit (TB) pension plan. Those offering these plans were asked whether they were taking or considering taking specific actions due to the COVID-19 pandemic. More than one in four (28%) have conducted an actuarial valuation due to the pandemic, with an additional 19% considering doing so. Similarly, one in seven (15%) has reviewed their actuarial plan assumptions/plan designs, with an additional 29% considering doing so. In addition, 9% of responding multi-employer funds have updated their investment policies, while an additional 25% are considering doing so. Small proportions of responding funds have closed their plans to new members/hires (4%) or discontinued offering benefits to some or all categories of active workers (2%).
Those responding organizations that offer health benefits to their workers (88%) were asked about changes made to their offerings due to the implications of COVID-19.
While more than one-third of responding funds (36%) already offered telehealth/telemedicine services (for physical ailments) prior to the COVID-19 pandemic, an additional 23% have implemented these services due to the pandemic, and an additional 14% are considering doing so. Before the pandemic, 17% of respondents already had reduced/eliminated cost sharing for telehealth/telemedicine services. In response to COVID-19, an additional 12% have reduced/eliminated cost sharing, and another 10% are considering it at this time. About three in four (73%) of the funds that added services to their telehealth/telemedicine offerings did so without a fixed end date, while 13% added them for a limited time. The same proportion (13%) reported that it is too early to tell if they will have an end date for these benefits.
Mental/Behavioural Health Benefits
About one-half of responding multi-employer funds have either added (27%) or are considering adding (18%) components to their existing mental/behavioural health benefits. While nearly two in five (39%) funds already offered telepsychiatry/telemental health benefits before the pandemic, an additional 10% added this benefit for plan members due to the pandemic, and 10% of responding funds are considering it at this time. Prior to the COVID-19 pandemic, 35% of respondents already had relaxed or eliminated eligibility requirements for members to receive mental health benefits; an additional 3% of funds have also relaxed/removed eligibility requirements due to the COVID-19 pandemic, and another 12% are considering this change. About one in six (16%) respondents had previously reduced or eliminated cost sharing for mental/behavioural health benefits. As a result of the COVID-19 pandemic, an additional 5% have implemented this, and 14% are considering this change.
Prescription Drug Benefits
The COVID-19 pandemic has had implications on responding funds’ prescription drug benefit offerings. Of those responding funds that offer prescription drug coverage, two in five (39%) have temporarily waived premiums for some or all plan members, while 15% have extended the time allowed under prior authorization periods for prescription drugs. Responding funds were less likely to have waived prior authorization requirements (8%) or mandated/promoted the use of mail-order programs for maintenance drugs (6%) due to the implications of the COVID-19 pandemic.
Short-Term Disability Benefits
About three in five (59%) participating funds offer short-term disability (STD) benefits; of those, 85% have a required service period. Nearly one in four (23%) of these organizations have reduced/eliminated the required service period for STD benefits due to the pandemic. Of the 80% of funds that have an elimination/waiting period, 27% reported relaxing or removing the periods due to implications of the pandemic.
Employee Assistance Programs (EAPs)
About three in five (58%) participating funds provide an employee assistance program (EAP) to plan members. Of those, more than one in six (18%) added services to their programs, with an additional 8% considering adding services in the future.
Benefit Questions from Workers
During difficult times, multi-employer fund offices typically see an increase in questions from members. The survey asked which topics are the focus of these questions. The topics most commonly cited were primarily health related: general health benefits (53%), mental health benefits (48%), prescription drug benefits (32%) and the employee assistance program (EAP) (30%). Other topics with increased question frequency include early retirement options (29%), DB pension plans (28%), telehealth/telemedicine benefits (22%), short-term disability benefits (22%) and wellness programs (20%).
Download the full report: Impact of COVID-19 on Pensions and Benefits in Canada to learn more about how employers are reacting to the COVID-19 pandemic. The report is available free to International Foundation and ISCEBS members.
Find more coronavirus-related resources for employers on the Foundation’s Coronavirus (COVID-19) Resources page.
Register now for these upcoming events:
- Resilience in Crisis: Tools for Employers to Help | July 23, 2020 | Webcast
- Investments in Today’s Climate and Beyond | August 18-19, 2020 | Virtual Conference
- Mental Health Impact of COVID-19 on Workers and Their Families | September 15-18, 2020 | Virtual Conference
- 53rd Annual Canadian Employee Benefits Conference | September 29-October 8, 2020 | Virtual Conferences
Justin Held, CEBS
Senior Research Analyst at the International Foundation
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