Spotlight | Fall 2017 by Cowan Insurance Group

spotlight Providing insights and information on industry trends and developments.

Issue 4

Fall 2017

#T1D Looks Like Me

Living Life with Type 1 Diabetes

PLUS: Harmonization— Helping You Bring It All Together

Return to Health’s LOA Administration Goes Global

Workplace Addiction—Are Your Employees Addicted to Their Jobs?

Border Crossing— Harmonizing American and Canadian Pension Plans

Be the Change You Wish to See—At Your Company

Foreign Workers— Is Being Misinformed as Costly as Being Uninsured?

Easy-Peasy Drug Price Control

#T1D Looks Like Me

Living Life with Type 1 Diabetes More than 300,000 Canadians live with T1D. Canadian Diabetes Association. The prevalence and costs of diabetes. December 2009.

What comes to mind when you hear the word diabetes? Chances are you will think of yourself or someone you know who has been diagnosed with diabetes, or its precursor condition, pre-diabetes. The odds are even higher, about 9:1, that it will be Type 2 diabetes that comes to mind. According to the Juvenile Diabetes Research Foundation (JDRF) three million people (almost ten percent of the Canadian population) live with some form of diabetes; 90 to 95 percent of them have Type 2. But what about that “other kind” of diabetes, Type 1? Isn’t it the “bad” and more "severe” type? Both Type 1 (T1D) and Type 2 diabetes (T2D) result in high blood glucose levels. If left untreated or unmanaged, both can lead to devastating complications and cost. In many ways, however, the two types are distinctly separate diseases, with differing realities for those who have them. As the prevalence of T2D grows, along with media attention, it is more important than ever to eliminate the myths and misconceptions surrounding T1D, and to raise public awareness.

The other kind

Complicating matters Once referred to as "juvenile diabetes,” the onset of T1D typically happens during the pediatric stage. By contrast, T2D or “adult onset diabetes”, where the pancreas may produce normal insulin levels, but cells become resistant to it, historically took decades to develop. But T1D can strike at any age. And T2D is not just for adults anymore. Over the last twenty years, the incidence of T2D has not only exploded in adults; it now affects a growing number of adolescents and children and is expected to reach epidemic proportions. Regardless of type, the complications that all people with diabetes face are similar. The majority of these are related to nerve and blood vessel damage resulting from sustained high blood glucose levels and include: • Diabetic coma, or ketoacidosis • High blood pressure • Hypoglycemia, or low blood sugar • Nephropathy, or kidney disease • Retinopathy, or eye problems • Heart attack and stroke

T1D is an autoimmune disorder that attacks and permanently destroys insulin-producing beta cells in the pancreas. Insulin is necessary to metabolize glucose (or sugar) in the bloodstream. Without insulin, high blood glucose levels cause cellular damage and an inability to metabolize sugar into energy, leading to organ damage, starvation, and death. The cause of T1D is unknown, but researchers believe that the condition is triggered by a combination of genetic and environmental factors.

• High cholesterol

What is known, is that unlike T2D, the onset of T1D is not related to diet or a sedentary lifestyle. It is not caused by eating sugar or by being overweight. Neither strict caloriecounting nor excessive exercise will “cure” it. A healthy, balanced diet and regular exercise are as important for people with T1D as they are for the population in general. There is nothing that can be done to prevent this condition, and there is currently no known cure.

Preventing complications and preserving the quality of life can feel like a full-time job. To remain healthy, people with T1D must become good self-managers of their condition, mastering the information and skills required to integrate the disease into everyday life. Like any chronic illness, the constant and exhausting demands of monitoring and selfcare can be challenging and grow tedious, adding an extra level of complexity to the hectic, demanding lives most of us already lead.

Insulin is not a cure Human beings need insulin to survive. Before the discovery of insulin as a treatment in 1921, T1D was a terminal disease. A starvation diet was one of the few options that could keep patients alive—but not for long. Without daily doses of insulin, a T1 diabetic will die. Control of T1D is optimal with multiple daily injections using syringes, an insulin pen, or via an insulin pump; a small device that resembles a pager containing an insulin cartridge. The pump is connected to the body using tubing and a needle, like a small IV. In most cases, the method of insulin administration is a matter of choice and affordability, and is not a reflection of the “severity” of the condition.

• Neuropathy, or nerve damage, most often in legs and feet • Amputation • Ulcers and skin infections • Cognitive decline

Every day is a battle

Food, medication, physical activity, as well as biological and environmental factors can all affect blood glucose— sometimes in the most unpredictable ways. It is impossible to control, or even account for, some variables and not every individual will respond in the same manner. The same person may react differently from day-to-day, or over time. The non-stop demands of T1D can take a toll on mental health—not to mention feeling guilt and shame when, in spite of best efforts, target blood glucose levels are not met. People with T1D can run the risk of developing diabetes distress. This involves feeling frustrated with blood sugars and overwhelmed by daily management tasks, or being isolated in the diabetes experience. Prolonged diabetes distress can lead to diabetic burnout,

Common Characteristics of Type 1 and Type 2 Diabetes Occurs when

Type 1 Diabetes The body’s immune system destroys its own ability to produce insulin. Insulin is no longer produced.

Commonly Afflicted Groups

Often diagnosed in childhood/teens, although onset can occur at any age.

Physical Attributes Onset

BMI typically falls within the normal range, or is low.

Bodily Effects Warning Signs

Treatment Prevention Cure

Type 2 Diabetes The body still produces insulin, but receptor cells have become less sensitive to the insulin (insulin resistance). This insulin resistance results in less sugar being removed from the blood. Adults, elderly, certain ethnic groups (African American, Latino/Hispanic, Native American, Asian or Pacific Islander). Typically diagnosed in individuals over 30 years of age but occurring at younger ages. BMI is typically in the overweight or obese ranges.

Rapid, sudden onset. Often associated with higher than normal ketone levels at diagnosis.

Slow onset, sometimes taking years and often presenting without early symptoms. Often associated with high blood pressure and/or cholesterol levels at diagnosis. Believed to be triggered by autoimmune destruction of the Appears to be related mostly to obesity, but also aging, beta cells; autoimmune attack may occur following a viral genetic influence and a sedentary lifestyle. infection such as mumps, rubella, or cytomegalovirus Extreme thirst, frequent urination, drowsiness or lethargy, Feeling tired or ill, frequent urination (especially at night), increased appetite, sudden weight loss, sudden vision unusual thirst, weight loss, blurred vision, frequent changes, sugar in the urine, fruity odor on the breath, infections and slow wound healing; may be asymptomatic. heavy or labored breathing, nausea and vomiting, stupor or unconsciousness. Treated with insulin via injections or pump. Commonly treated with lifestyle changes such as diet, exercise and weight loss; oral medication, insulin. No known way to prevent the autoimmune attack on Commonly prevented or delayed with a healthy lifestyle, pancreatic, insulin-producing cells. including maintaining an optimal weight, eating sensibly, and exercising regularly. None. There is no cure for type 2 diabetes, although gastric bypass surgery, lifestyle, and medication treatment can result in remission. An active lifestyle, healthy loss of weight, and diet control is advised.

The rate of T1D incidence among children under the age of 14 is estimated to increase by three percent annually worldwide. IDF: http://www.idf.org/diabetesatlas/diabetes-young-global-perspective

or feeling unable to cope with diabetes.1 In a constant see-saw between prevention of complications and preservation of the quality of life, developing coping strategies to maintain health, balance, and happiness is crucial.

Getting lost in the shuffle If current trends continue, T2D is being poised as an economic tsunami, with catastrophic social and financial outcomes. How can T1D compete for attention and funding in the face of such an epidemic? Federally funded and industry-sponsored clinical trials are influenced by the number of cases found in the general population. An even bigger part of the problem is that the conditions are being continuously lumped together, creating confusion and blurring the difference between the two. Government statistics, sectors of the

medical community, and insurance carriers make no distinction between T1 and T2D. Public health officials are aggressively preaching prevention in an effort to change the current course of T2D. But head to the Canadian Diabetes Association (CDA) website, and you will find that “raising awareness of diabetes” appears to be synonymous with raising awareness of T2D and how to avoid it. Advertising dollars are being spent at a staggering rate as the number of T2D cases, but marketing campaigns, geared towards the mass market and profitability, all use the term “diabetes” interchangeably with T2D. This confusion and lack of distinction can lead to misconceptions about T1D, making it more difficult for organizations who are more committed to finding a cure to secure funding for research. While the situation has led some T1 diabetics to lobby for a

new and distinct name for the condition, others feel that education and raising public awareness is the best course of action. All types of diabetes are serious. T1D and T2D are just the most common. There is no “good” kind of diabetes. With proper management, however, people with diabetes can live relatively normal, healthy, and productive lives, ever hopeful that a cure for all types will soon be found.

The importance of employer benefits What many people do not understand is the amount of effort that it takes to keep T1D well-controlled. There are no breaks, no vacations. It is constant—and it can be costly. But what about those people who simply cannot afford to effectively manage their condition? A 2011 report published by the

CDA notes that 57 percent of Canadians with diabetes say they do not comply with prescribed therapy because they cannot afford medication or supplies. Government coverage of diabetes medications and supplies can vary by location, leaving those living with T1D to bear the costs directly. Particularly at risk are lower-income earners without social assistance; fixed-income seniors; and those with high drug costs, who do not qualify for other forms of assistance and are not covered under a private health plan.

The same CDA report notes that on average, Canadians with diabetes already spend more than three percent of their income—over $1,500 annually—on out-of-pocket medical costs related to diabetes. The argument can be made that the federal government should enhance financial assistance for people with diabetes, ensuring affordability and access to medications, devices, and supplies. As it stands, however, for Canadians who live with a chronic disorder, employersponsored healthcare benefits play a crucial role in their effort to remain healthy and productive.

Employers find themselves making crucial business decisions that have serious ramifications with real-life consequences on a daily basis. If the argument for implementing an HCSA, in lieu of a traditional benefits plan, is to promote prevention by facilitating choice, that choice and prevention may come at a high cost for those with chronic conditions. For employees with health challenges that are truly beyond their control, their employer plan is the most valuable thing of all.

The life expectancy for people with T1D may be shortened by as much as 15 years. Canadian Diabetes Association. An economic tsunami: the cost of diabetes in Canada. December 2009.

#t1dlookslikeme For me it’s not just a catchy slogan—it’s my life, and has been for the past 45 years… over 16,500 days, and 42,000 injections, although those are harder to calculate, as multiple-dose insulin injection therapy did not exist in 1972, when I was diagnosed at the age of six. The burden of responsibility and fear of complications that accompany T1D make a person grow up—fast. I don’t remember a time before diabetes, but I distinctly recall a nurse scolding me for squirming and telling me to “get used to it”, because I'd be giving myself a needle every day for the rest of my life. I injected water into an orange over and over those first weeks, losing my fear of needles quickly—at least those that I give myself. I’ll let you in on a secret though, people who have managed diabetes for years dislike finger-pricking and needles just as much as the next person. It’s been ninety-six years since a fourteenyear-old boy with T1D became the first person to have their life prolonged by insulin. It seems surreal to me that had

I been born fifty years earlier than I was, I likely would not have survived into my teens, let alone adulthood. While I may not be overly fond of injections, I am grateful that there is something that keeps me alive until a cure is found. T1D is always in the back of my mind. My insulin, monitor, and an emergency source of carbohydrates are with me at all times. The factors that can potentially affect my blood sugar are endless, sometimes unidentifiable. What I eat, what I do, stress, illness, lack of sleep, hormone fluctuations… all can have an unpredictable effect on my blood sugar. With T1D, you have to deal with the same everyday home and work stress that life throws at all of us, yet you still have to test six or more times a day, and injecting just as often, counting carbs and running calculations in the back of your mind, while dealing with blood sugar highs and lows that can sometimes be extreme. Yet most people who interact with me daily never know that I have T1D until I tell them. T1D has cost me dearly on a personal and

Polonsky WH. Diabetes Burnout: what to do when you can't take it anymore. American Diabetes Association, New York 2000. Resources

professional level, but it has also left me wiser and more appreciative of things that others sometimes take for granted. I’ve dealt with my fair share of complications and am stronger for it. Sometimes I almost feel like there’s a perverse determination among those with the condition to enjoy life and succeed in spite of it. I’ve travelled the world on my own and finished my degree after temporarily losing my sight due to diabetic retinopathy when I was 22. Thankfully, technology and research had advanced enough to restore the majority of my vision, and to make diabetes management easier, allowing me to lead a healthy, full, and active life, pursuing my passions. After more than four decades, I’ve learned to deal with the fear and guilt that many T1D’s report having—most days. I know I do the best that I can with the tools I have available to me. Blood glucose meters, as well as numerous other medical and technological advances over the years, have made T1D much easier to manage I’ve learned the hard way that what’s most important is my health.

For chart: http://www.diabetes.co.uk/difference-between-type1and-type2-diabetes.html http://www.webmd.com/diabetes/tc/diabetesdifferences-between-type-1-and-2-topic-overview http://www.diffen.com/difference/Type_1_Diabetes_ vs_Type_2_Diabetes http://www.medicalnewstoday.com/articles/7504.php http://www.jdrf.ca/news-and-media/fact-sheets/ type-1-diabetes/

For article: http://www.benefitscanada.com/news/shift-towards-dc-approach-to-health-benefits-inevitable99676?platform=hootsuite https://www.canada.ca/en/public-health/services/chronic-diseases/reports-publications/diabetes/diabetes-canadafacts-figures-a-public-health-perspective.html#toc http://drc.bmj.com/content/3/1/e000044.info http://www.diabetes.ca/CDA/media/documents/publications-and-newsletters/advocacy-reports/burden-of-out-ofpocket-costs-for-canadians-with-diabetes.pdf http://www.diabetes.ca/publications-newsletters/advocacy-reports/economic-tsunami-the-cost-of-diabetes-in-canada https://www.diabetes.ca/newsroom/search-news/diabetes-awareness-month-highlights-need-for-actio https://www.diabetes.ca/diabetes-and-you/living-with-type-1-diabetes https://www.diabetes.ca/diabetes-and-you/kids-teens-diabetes/children-type-2-diabetes http://www.jdrf.ca/t1dhub/ http://www.mayoclinic.org/diseases-conditions/type-1-diabetes/symptoms-causes/dxc-20340979

CONTRIBUTOR Joanna Swan Communications Specialist The Williamson Group 519-756-9560 x204 jswan@williamsongroup.com

Harmonization No matter how big or small your organization is, acquiring a new company and bringing them into the fold of your organization can be daunting and unfamiliar—and it can make your employees feel uneasy. Top of mind for employers and employees alike is compensation. Group benefits play a significant role in an employee’s overall compensation package and can directly affect employer cost controls, as well as employee attraction, retention, and engagement.

Helping You Bring It All Together When beginning the acquisition and merger process, consider the following as they relate to both companies: • What are the current programs? • What will be your benefits philosophy? • What are your benefit intentions? •A re there opportunities to streamline offerings, or to harmonize the plans? •A re there opportunities to take advantage of new buying power? •A re there opportunities to explore greater flexibility and financial arrangements with continued growth? • How will the merger be accomplished? • What is your communication strategy? • What is the proposed timeline? While this course of action may seem overwhelming, we can help you manage the process. Reviewing current benefit programs against benchmarking statistics provides a good starting point to grasp the current state of the plans in question. Outlining the objectives of your company, along with the desired end result, assists in ensuring the final objective is kept in the line of sight at all times.

The Williamson Group—A Cowan Company works with our client partners to obtain the desired results with the least amount of impact possible to the employees affected by the merger/acquisition. Key areas that we focus on are: Benefits Review. A full benefits review of both organizations is necessary in order to ensure a smooth merger/acquisition and that the most effective benefits decisions are made. Sometimes this means facilitating a full plan overhaul. A closer examination of client intentions alongside the review data may also result in the client leaving both plans intact. Communication Strategies. Every person perceives change differently. Ensuring that everyone embraces the new road ahead can become a difficult task. Understanding that communication is imperative—and working with a benefits consultant to navigate this road with you—can help you effectively communicate the compensation path that your new organization will be taking. Employee meetings and communication brochures help explain the process, allowing employees to digest the information and actively participate in their benefit plan. Giving employees the chance to ask questions and understand how the changes will affect them and their family helps provide greater comfort in times of change. Communication is the key. Strategic Timing. As this is a big undertaking, we advise providing enough time to take careful consideration, especially when major changes are being contemplated. While every amalgamation may not have the luxury of time, developing a benefits action plan with a trusted partner will help ease the burden and ensure that all areas on the critical path are addressed in a strategic manner. Having just completed this application with one of our clients, we were able to carefully and thoughtfully navigate both plans and harmonize their benefits to provide streamlined access and administration. Employee communication and timing was instrumental to their success as it allowed for open dialogue and acceptance of the cumulative goal.

CONTRIBUTOR Tammy Ryan Manager, Benefits Consulting, Small Business Segment, National Benefits The Williamson Group 519-756-9560 x204 | tryan@williamsongroup.com

Client Case Study

Return to Health’s LOA Administration Goes Global The Williamson Group—A Cowan Company’s Return to Health® (RTH) has been a leading provider of short term disability management, medical accommodation request management, WCB/WSIB/CNESST management, and medical leave of absence management services for over fifteen years. By providing support that reaches beyond the scope of traditional case management, RTH creates a culture of collaborative communication and support for all of its clients. The department recently reached another milestone with the expansion of its Employment Standards Act (ESA) leave of absence management services to a global clientele. Stantec first implemented COLO—RTH’s fully integrated realtime online short term disability and ESA leave of absence management system—on January 1, 2012. Along with the development of a new platform under COLO, RTH created an Intake Centre to facilitate absence registration throughout Stantec’s Canadian office locations. The centre is staffed with Intake Specialists to guide Stantec employees through applicable provincial legislative guidelines—often advising on the appropriate leave types to be registered, depending on the circumstances. “We were thrilled to partner with Stantec when they approached us for assistance with finding a solution to managing their ESA leave of absence under one platform,” says Catherine Vandenberg, Manager, Disability Solutions, at The Williamson Group. “COLO was an obvious solution.”

What did this mean for Stantec? By implementing COLO, Stantec gained the capacity to register all of their Canadian disability and ESA leaves on a single platform. With the ability to accurately track all employee absences in real-time, Stantec quickly regained full control of their disability and ESA leave of absence status. COLO also offers 18 standard reports, as well as customizable reports, specific to Stantec’s needs. Along with full ESA leave of absence administration and short term disability assessment by the RTH team, COLO has helped streamline and reduce the company’s administrative burden. With successful Canadian implementation, Stantec realized that COLO needed to be rolled out further afield and into their US office locations. RTH and Stantec went back to the drawing board, along with Jane Standings, Manager, Leave of Absence Administration, HR Service Center at Stantec. Together they mapped out, designed, and successfully implemented the next phase—ESA/LOA management in the US.

Over the past five years, Stantec has been working closely with The Williamson Group to help us safely return our employees to work. Within the process, The Williamson Group uses COLO, a case management tool that supports day-to-day interactions with staff, captures employee personal and work information, and houses documents to support their current disability claim. The Stantec Leave of Absence Team finds this tool to be easy to navigate and provides the necessary information to ensure we can manage alongside our extended case managers at The Williamson Group. When reviewing case management tools for the Leave of Absence Team in the US, our first thought was to reach out to The Williamson Group and ask if this same system could be used across the border. In the US, our extended case management team would not be managing the claim; instead, the Leaves Team would become the case managers, accessing the same tools, tasks, employee personal and work information, and documents required to manage the claim. In April 2016, we began the implementation process of COLO US. We worked together with The Williamson Group to design a tool that would look similar to the Canadian COLO, using the leave types and rules applicable to US employees. I have worked through many system projects over the past 15 years and found working with The Williamson Group easy. They had a plan which included our needs and wants of supporting our employees and the team. We implemented COLO in September 2016 and have just reached the 500-employee leave mark. The Stantec Team can run reports, track by leave type, complete their work, set reminders, gather information for other departments, confidentially send personal emails to the employees, and most of all, they know what work needs to be done daily. As a leader, I can see who on the team may need help with their tasks and provide solid statistics to Leadership when requiring additional headcount. COLO can continue to be enhanced to fit Stantec’s changing needs. When enhancements are requested, they are completed the same day. It’s almost been a year since we implemented and if asked today, the Leaves Team would say “what did we ever do without this tool—how was I managing my work?” Jane Standing

CONTRIBUTOR Catherine Vandenberg Manager, Return to Health®, Health, Disability & Wellness The Williamson Group 1-800-265-9973 x229 cvandenberg@williamsongroup.com

1/5

Every year, one out of five Canadians experiences problems with addiction, along with negative consequences that reach much further than the impact that the addiction has on the addicts themselves.

Defined as an “inability to consistently abstain, impairment in behavioural control and craving, diminished recognition of significant problems with one’s behaviours and interpersonal relationships, and a dysfunctional emotional response” by The Canadian Society of Addiction Medicine (CSAM), addiction is likened to other chronic diseases that involve cycles of relapse and remission, and which can result in disability or premature death without treatment or rehabilitative efforts. There is a direct correlation between mental illness and addiction. People suffering from mental illness are twice as likely to have an addiction, while those who struggle with addiction are up to three times more likely to have a mental illness. The cost of addiction in Canada is staggering—between $7.1 to $11.8 billion annually in lost productivity and $3.3 billion in direct health costs. Over 75,000 Canadians are admitted to hospital annually as the result of alcohol-related illnesses—that’s more than are admitted for heart attacks, and these numbers are growing. Alcohol, cannabis, and opioid medications are the top three most abused substances nationally, but there is another more common addiction that these statistics don’t factor in—one-third of Canadians consider themselves to be workaholics, making it the most prevalent addiction by far.

Workplace Addiction Defining “Workaholic”

How Can Employers Help?

By focusing on being busy rather than on being productive, workaholics have a tendency to be inefficient workers. With a poor work-life balance and less-than-healthy lifestyle, workaholics also commonly suffer from sleep deprivation, and impaired brain and cognitive function. Researchers have noted that workaholics do not work well as part of a team; have difficulty delegating or entrusting co-workers; and often struggle to stay organized—all of which can further decrease their workplace efficiency.

Lead by example. Entrench a work culture that puts employee health and welfare first. Along with your management team, enforce the importance of taking vacation days, daily lunch breaks and encourage employees to go home on time to have dinner with their families. Establish walking clubs with a points program that motivates employees to get moving and enlist your management team to put on their running shoes and ‘walk the talk’ with them! Studies have shown that just 15 minutes of walking daily can have a significant impact on happiness, wellness, and productivity.

A workaholic’s obsession with their job can be all-encompassing, preventing healthy relationships, recreational interests, and self-care. A recent UK study showed that working more than 55 hours a week increased an employee’s chances of having a stroke by 33 percent, and increased their chances of suffering from a heart attack or cardiovascular issues by ten percent. So are employers profiting from these over-enthusiastic employees? The answer is no. Workaholics are counterproductive and more likely to put a burden on an employer’s health and disability program, due to their lack of self-care and healthy lifestyle choices.

ARE YOUR EMPLOYEES ADDICTED TO THEIR JOBS?

Educate and communicate. For more traditional addictions, the first step is admitting there is a problem. Education and open communication, without creating shame or judgment, is crucial. Your Employee and Family Assistance Plan (EFAP) provider has literature and communication sessions that focus on addiction. If you don’t have EFAP, your Group Benefits Consultant will be able to help. We’ve also provided a few resource links below. http://www.drugandalcoholhelpline.ca/ http://www.conferenceboard.ca/Libraries/PUBLIC_PDFS/ MHCC_Workplace-Substance-Use_EN.sflb Recovery is positive and achievable. A CCSA study of Canadians in recovery revealed that 91 percent of those studied feel that their lives have greatly improved as a result of recovery; 96 percent were able to maintain a stable home, compared to only 65 percent before rehab; and 90 percent could participate in family activities, compared to only 31 percent while addicted. More than 20 percent of Canadians are struggling with their own, or a loved one’s, addiction, making it likely that at least one of your employees is being affected. Creating a safe, nonjudgemental environment for employees to get the support and help they need, will have long-lasting, positive effects on your organization. Let’s take that first step together.

CONTRIBUTOR Sources: Canada, Government of Canada Statistics, “Health at a Glance”. Government of Canada, Statistics Canada. N.P. 27, November 2015. Mental Health Commission of Canada “Start the Conversation, Problematic Substance Use and the workplace”. Mental Health Commission of Canada, 2016 Canadian Centre on Substance use an Addiction, 2017

Louise Delic Senior Benefits Specialist, Client Partnerships Cowan Insurance Group 519-650-6364 x51414 louise.delic@cowangroup.ca

Harmonizing American

Canadian Pension Plans

Upon the acquisition of a Canadian company, American parent companies will often assume that they can easily mirror the benefits they offer on both sides of the border. In the pension consulting field, we commonly see two distinctly different pension approaches that American parent companies regularly take when attempting to amalgamate benefits. The first approach keeps the acquired Canadian firm’s benefit plans intact, without interruption or change, including pension. The second tries to harmonize the features of the Canadian plan with those of the American plan. It is this latter approach

Border

that can prove to be more difficult than initially estimated, leaving both American and Canadian plan sponsors grappling to understand the fundamental differences between Canadian and American retirement savings plans. The chart below outlines common Canadian and American retirement savings vehicles, with the primary differences in pension legislation, plan design options, and general retirement plan philosophy that frequently influence key decision-makers on both sides of the border.

Canadian vs. American Group Plan Comparison

Eligibility

Defined Contribution Pension Plan (DCPP)

Registered Retirement Savings Plan (RRSP)

Deferred Profit Sharing Plan (DPSP)

401(K)

Determined by Plan Sponsor

Provincial legislation applies

Federal limits apply

Provincial legislation applies

Contributions Legislation requires (Funding) employers contribute a minimum 1% per year Most often stated as a % of salary

Discretionary contributions, Discretionary contributions, Employer discretionary typically a % matched by usually a % based on often a % matched formula the employer salary, no employee contributions allowed

Maximum Contribution Threshold

18% of current year’s earnings up to the contribution limit for the year ($26,230 for 2017)

18% of previous year’s earnings up to the contribution limit for the year ($26,010 for 2017), plus any unused contribution room minus any pension adjustments

18% of current year’s earnings up to a maximum of ½ of the DCPP contribution limit for the year ($13,115 for 2017)

Employees can defer up to IRS max – defined each year. In 2017 $18,000 for employees under age 50. $6,000 catch up contribution for employees 50 and older ($24,000 total). Employer can contribute additional with a max annual contribution of $53,000.

Pension Age Qualification

As early as age 55

As early as age 50 (for RRIF)

Defined in plan text Distribution without penalty as early as age 59½

Vesting/ Locking-in

Immediate/ Immediate in Ontario

Immediate/ No

2 years of plan membership but can be waived by Employer / No

Set by the employer as plan design

Spousal Contribution

Not allowed

Employer Contributions

Deductible in accordance with annual contribution limits

Treated as employment income

Employer contributions Discretionary are not subject to payroll Deductible in year made tax and are tax deductible for the employer

Crossing In the United States, a single 401(K) plan may be sufficient to meet an organization’s needs whereas, in Canada, a combination of a Group RRSP, DCRPP and/or DPSP may be required to mirror the 401(K) as closely as possible. Another significant cross-border difference can found in the “bundling” of Canadian plans. On this side of the border, the professional services associated with operating a compliant retirement savings plan—including record keeping, trustee/custodial, and investment management services—are commonly bundled by insurance companies under one umbrella.

customary in Canada for employers of a similar size and industry. Contribution rates, common eligibility or waiting periods, plan design (Group RRSP, DCPP, and DPSP) were examined.

In contrast, American plan sponsors take a more “unbundled” approach, paying separately for the above services. Employers in the United States typically also foot the bill for these services, whereas, in Canada, these costs are most commonly built (or bundled in) to the member paid investment management fee— and not at the expense of the employer.

• Although a complete harmonization was the most desirable outcome, there were significant efficiencies gained simply by consolidating multiple plans with one carrier, with little disruption for the plan members.

Amalgamation in action In a recent example, a Cowan Insurance Group pension client—a large Canadian corporation with multiple divisions across Canada—was purchased by a more major American company. As a percentage of the overall employee numbers, the Canadian operation was small by comparison. For ease of administration, the new owners decided to undertake a global harmonization project whereby the features and benefits of the various pension plans would all mirror that of the American plan. Our first step was to market the existing Canadian programs and assist our client in selecting an insurance carrier capable of partnering on a project of this scope and complexity, and willing to apply the resources required to gain a full understanding of the multiple plan designs, union contracts, and applicable provincial legislation. The consolidation of plans under one carrier was completed in less than six months and was the first step in the harmonization project. Before the company decided to proceed with changing the basic rules of the plan to mirror the American retirement savings program, a pension benchmarking analysis was performed to help the new owners understand what was reasonable and

Careful analysis of the benchmarking results allowed both Canadian and American decision-makers to identify who would “win or lose” in the wake of any proposed changes, and the overall cost implications and potential impact on previously negotiated union contracts were also studied.

What the client discovered was:

• Collective bargaining agreements prevented sweeping and immediate change. • Culture and demographics should be carefully considered before imposing change. • Realistic expectations must be set to avoid unattainable deadlines, and each step in the process requires much discussion before moving forward. All employers want their employees to be able to retire well and at an optimal time for all involved. Understanding the drivers of change—whether that’s cost, culture, or ease of administration— can avoid misunderstandings that cause delay and frustration. Experienced pension consultants can provide objective guidance, do the heavy lifting when required, and help you navigate the road to change.

CONTRIBUTOR Leslie Sing Director & Principal, Pension & Retirement Consulting, Pension & Retirement The Williamson Group 519-756-8830 x219 | lsing@williamsongroup.com

BE THE CHANGE YOU WISH TO SEE—AT YOUR COMPANY Company culture has become a recent buzzword in the HR world, as the influence of a positive company culture is reported to increase productivity, engagement, and ROI, and have an impact on the retention and attraction of top talent.

The creation of company culture—or the modification of an existing one—can be challenging. Once defined, however, why not take the first step towards reinforcing it by examining any existing group benefit and retirement programs to ensure they emulate the culture you are trying to create. Interestingly, many benefits plans are neither updated nor evaluated annually to ensure that they still reflect shifting corporate cultures and align with the company’s changing needs.

Building a benefits plan with cultural fit To build a culture of leadership, giving employees more choice is a priority. A flexible benefits program can provide employees with a customizable insurance plan. Offering retirement and savings plans that include both a “hands-on” and “hands-off” investment approach can provide ultimate diversification and flexibility to a wide range of ages within your workplace. Alternatively, an employer promoting a family-friendly culture may choose to include additional benefits, such as dependent life insurance, additional coverage in the event of a critical illness, or coverage for the cost of an employee’s benefits program, regardless of single or family status. A workplace that values environmental sustainability may choose

to partner with a carrier who offers paperless reimbursement and shows commitment to reducing their ecological footprint. Those looking to promote a culture of wellness may decide to add an employee and family assistance program or an additional taxable spending account funded for items such as gym equipment and memberships. Every company and culture is unique. The choices around plan design, carrier selection, and cost-sharing can be shaped to your liking. Our role is to understand what’s important to you, and then work together with you to find creative solutions to match your needs. Need help aligning your company culture with your benefits program? Just ask.

CONTRIBUTOR Lauren Tucker Consultant, National Benefits The Williamson Group 519-756-9560 x315 ltucker@williamsongroup.com

Foreign Workers Globalization has altered how we communicate, interact, and innovate. By facilitating a worldwide talent pool of qualified candidates, our universal economy has transformed the employment climate and has had a significant impact on workforce composition. Recruitment of foreign workers has become increasingly popular in Canada, allowing employers to address a number of organizational pain points. From filling longstanding vacancies in fields such as agriculture to recruiting top talent for niche market needs, hiring foreign workers allows employers to fulfil their mandate, often providing the competitive edge required to execute the delivery of services, products, and projects. Duty of care obliges employers to take all reasonable measures to ensure that employees are accommodated accordingly, and able to fulfil their employment mandate. For in-patriates, understanding Canada’s single-payer healthcare system can be a daunting undertaking that results in unnecessary stress. In this case, duty of care may include assisting employees with integration into—and navigation of—a new culture, society, and healthcare system.

It is imperative to educate employees on how to use their newly granted Government Health Insurance Plan (GHIP) or privately attained provincial-plan replacement coverage to access healthcare, and on how it integrates with your organization’s benefits program. Securing coverage is only as beneficial as the information and knowledge that is passed on to employees. A consultant, who is well-versed on the challenges faced by in-patriates and their employers, will be able to help you secure the necessary interim comprehensive medical coverage. They will also be able to explain the difference between a clinic and a hospital, how to navigate wait times, and how to access a Preferred Provider Network (PPN), to prevent employees from incurring high out-ofpocket expenses.

• How do I ensure that my employee is adequately covered to eliminate the risk of a catastrophic claim—and the financial liability that comes with it? Although the requirements vary by province, Ontario foreign workers holding a valid work permit may be eligible for OHIP (Ontario Health Insurance Plan).

Employees and employers cannot afford to be misinformed—or uninsured. The result could prove catastrophic to the employee and the organization as a whole.

• Is my foreign worker eligible for provincial healthcare? • What are the necessary criteria? • Is there a waiting period?

https://www.ontario.ca/page/apply-ohip-and-get-health-card#section-4

coverage to begin. During this waiting period, employees without privately attained provincialplan replacement coverage run the risk of incurring significant and costly medical claims, which can pose a grave risk to employers—both financially, and in their obligation to uphold their duty of care.

Cowan Insurance Group partners with the best in the industry to ensure our clients have access to competitive packages, and fully-integrated programs that can accommodate various organizational and employee needs. Cowan’s comprehensive PPN comprises a range of medical providers, including hospitals, doctors, and diagnostic facilities, who bill Cowan directly. This is particularly beneficial as it minimizes outof-pocket expenses for the employee. To utilize this service, members simply locate a provider on our network and present their Cowan card. Cowan’s network spans across Canada, with highest concentrations of providers in Ontario and British Columbia.

As an employer, it is crucial that you know where your foreign workers fit within the provincial healthcare system and that you know the answers to questions such as:

Is Being Misinformed as Costly as Being Uninsured?

Eligibility is contingent on the: • validity period of the work permit • duration of an employee’s consecutive physical presence in the province

CONTRIBUTOR

• employee’s full-time employment status for a minimum of six months

Yara Khankan Consultant, International Benefits Cowan Insurance Group

Once a foreign employee’s application for OHIP is approved, it can take up to three months for

613-741-3313 x2388 yara.khankan@cowangroup.ca

EasyPeasy

Drug Price Control

Google “drug price control,” and in .078 seconds you’ll get 5,180,000 items in response. Add “Canada” to the search bar, and that number drops by more than half, to 2,710,000—and not a day goes by without more chatter about this topic hitting the web. Drug pricing in Canada is not a wide-open, free-market game. The Patented Medicine Prices Review Board (PMPRB) is a federal government agency charged with establishing the price of new drugs approved for sale in Canada. The PMPRB’s 1987 mandate is “to ensure that prices of patented medicines sold in Canada are

not excessive. … The PMPRB regulates the “factory gate” prices … ”1 Factory gate prices refer to a maximum amount that a drug manufacturer can charge, but quite often the price right out of the factory gate is less. Typically, the drug is shipped to a wholesaler, who will add a markup to the price they were charged when they resell the drug to a retail pharmacy. The retail pharmacy, in turn, will add its markup on the drug when reselling it to the consumer—or, more accurately, to the plan sponsor. If your plan is using a pay direct drug card, however, there will be limits to the retail pharmacy markup. Most insurers have also put Private Listing Agreements into place with manufacturers to manage the cost of some speciality drugs—we’ll expand on them in the future.

If your plan is still on regular reimbursement, we need to talk.

Manufacturer

Wholesaler

The initial step of setting the factory gate price may seem simplistic in some ways, but it’s extremely complicated in reality. There are five factors involved in setting drug prices2, but we’ll focus on one in detail—“the price at which the medicine and other drugs in the same therapeutic class have been sold in countries other than Canada.”

Retail Pharmacy

Customer

PMPRB’s goal is to set Canadian prices at the median price of comparator countries. A recent federal government announcement (https://www.canada.ca/en/healthcanada/ news/2017/05/economic_club_ofcanada-may162017. html?wbdisable=true), however, is about to renovate the list of comparator countries.

Comparator Countries Current

Proposed

France

Australia

Norway

Germany

Belgium

South Korea

Italy

France

Spain

Sweden

Germany

Sweden

Switzerland

Italy

United Kingdom

Japan

United Sates

Netherlands

Bye-bye Switzerland and the United States All the countries that have been proposed to be added to the comparator list rank below Canada (see graph shown below), which will effectively drop the median drug cost.

2.5

2.0

Average Foreign-To-Canadian Price Ratios, Patented Drugs, OECD, 2015

1.5

1.00

1.0

0.74

Turkey

Greece

South Korea

Estonia

Czech Republic

Poland

Slovenia

Netherlands

Slovakia

Portugal

Norway

Hungary

Belgium

Great Britain

Italy

France

Spain

Luxembourg

Median - OECD

Ireland

Finland

Austria

Australia

New Zealand

Chile

Sweden

Germany

Switzerland

Japan

Canada

USA

0.0

Mexico

0.5

To put this into context internationally, you need to know how other countries set their pricing for new, brand drugs. Aside from the UK (while they remain), and Sweden, every nation in the EU sets their cost relative to the other countries. Other than these two outliers, the price is set on the average—or less than the average—of the other countries.3 Sound familiar?

medications in spite of PMPRB reform’s talking points? This same thing happened under the North American Free Trade Agreement (NAFTA) in the 1990s. The USA has now initiated renegotiations on NAFTA, backed out of the TPP, and are looking to reset all agreements to be in their benefit. Déjà vu all over again, as philosopher Yogi Berra would say.

Let’s get even more global. Brand drug prices in Canada are also affected by trade agreements, such as the Trans Pacific Partnership (TPP) which Canada has signed on to. Deep within the bowels of the agreement are provisions for intellectual property rights that could increase the length of time before a generic version of a brand drug becomes available to consumers. These provisions were noted in the working documents well before the final agreement was signed. Perhaps the Government of Canada doesn’t object to Canadians paying more for

Will all of this cast a shadow on drug prices in Canada? I think so. Drug price control in Canada is not going to be like whipping up a Jamie Oliver recipe, and it’s definitely not going to be easy-peasy.

Resources For chart: PMPRB 2015 Annual Report

For article: 1 http://www.pmprb-cepmb.gc.ca/about-us/mandate-and-jurisdiction 2 http://www.pmprb-cepmb.gc.ca/en/regulating-prices/price-review 3 https://www.government.nl/topics/medicines/keeping-medicines-affordable

CONTRIBUTOR Noel MacKay Principal Consultant, National Benefits The Williamson Group 519-756-8830 x234 nmackay@williamsongroup.com

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Legal Information Spotlight is provided for general information purposed only. Cowan Insurance Group and its affiliates make no representations or warranties to its accuracy or completeness. Readers should be aware that the content of this publication should not be regarded as legal, tax, accounting, investment, financial or other professional advice nor is it intended for such use.