Employers are in a strategic position to better support employees by offering group critical illness coverage.
According to the Canadian Cancer Society, 40% of Canadian men will develop cancer during their lifetime. Cancer remains the leading cause of premature death in Canada and is a leading cause for long-term disability claims in the workplace. Cancer, however, is a treatable illness; based on 2004 estimates, 62% of people are expected to survive for five years after their diagnosis.
Employers are in a strategic position to better support employees battling cancer. Group Critical Illness (CI) insurance is designed to assist those who survive a critical illness by paying a tax free lump sum benefit to the beneficiary, to use at their discretion. This benefit can provide much needed financial assistance to cope with unforeseen expenses, allowing the patient to focus on recovery.
As an example, drugs are an important part of cancer treatment, yet the complexity of cancer drug coverage in Canada creates barriers for some patients, as access to the most effective cancer medicine can be challenging and costly. In addition the majority of group insurance prescription drug coverage requires the plan member to pay a portion of the cost, typically ranging from 10% to 20% which can be substantial as some prescriptions can exceed $60,000.00 for cancer treatments not covered by government programs. A CI insurance payment can provide an alternative to patients in pressing need of funding for the necessary treatments. CI insurance plan designs vary and generally cover anywhere from three to 25 illnesses. Cancer claims, however, account for two-thirds of total claims since the inception of CI insurance in the Canadian marketplace in the early 1990s.
As employers are faced with the challenge of managing increasing costs of their benefits programs, many are rethinking their healthcare priorities and focusing on prevention in order to better manage these costs. Expanding voluntary benefits can allow an employer to effectively enhance its program without incurring additional costs.
Offering CI insurance on a voluntary basis is a cost-effective way for employers to support employees battling illness, providing coverage at affordable rates to those who may not be aware of the product and its worth or to those who may be aware of the benefit but do not have the opportunity to afford it on an individual basis. There are some group insurers who offer Voluntary Critical Illness with guaranteed issue amounts to groups (typically100 employees is the minimum requirement to obtain this special feature), which simplifies the underwriting and enrollment process by providing coverage without any required medical underwriting.
Should you wish to review a Voluntary Critical Illness program for your organization, please contact The Leslie Group and one of our consultants will assist you in this review.
This article was taken and edited for content from the May 2011 of BenefitsCanada.
The Leslie Group is a full service benefits consulting firm that is, in keeping with market conditions and legislative changes, committed to providing you with the best advice needed to manage your group benefits program. We would be pleased to address any questions and can be reached at (416) 510-8966.