Accelerating Cost Efficiencies Through Strategic Benefits Planning

In response to rising claims, employers across Canada are reviewing coinsurance levels, annual maximums and coverage structures within their health and dental plans. This has led many to shift from full reimbursement toward shared cost models for extended healthcare and dental services.

What are we seeing?

• Coinsurance levels of 80%-85% are increasingly common, reflecting a shift toward shared financial responsibility and consumer-driven approach.
• Annual deductibles remain less common, with most employers favoring coinsurance maximums as more predictable cost management tools.
• When introduced thoughtfully, shared cost models encourage informed decision making while supporting plan sustainability while boosting engagement.

"Carriers continue to invest in physical, mental and financial wellbeing initiatives alongside proactive health management partnerships. When supported by clear, tailored plan messaging and carrier provided resources, these programs are easier for employees to understand and use, supporting overall wellbeing," says Reeves.

Budget optimization often begins with a full audit of existing benefits and services. Many employers discover that virtual care, wellbeing resources and support tools are underused, often due to limited awareness or unclear navigation.

As a result, reviewing utilization data alongside employee feedback is vital before introducing new initiatives. In many cases, optimization involves improved communication rather than additional spending.

Employees who receive consistent communication about available benefits are more likely to engage with these resources, leading to higher utilization rates and greater satisfaction. This strengthens the perceived value of the benefits.

A company's approach to coverage also reflects its values and priorities, which can change over time as employee needs evolve and the workforce shifts.

Spending on medications represents a significant share of overall benefits costs, with both specialty and non specialty drugs contributing to ongoing cost pressure across industries and workforce demographics.

High-cost therapies, including GLP-1 medications, remain under review. In Canada, the announcement of generic Ozempic in 2026 has prompted closer examination of pricing, eligibility and future utilization trends.

Issue arise when there are prescription drug changes, for example updates to eligibility rules or formulary management. What happens? Employees often receive messages without clear guidance on how changes apply to them individually.

Indeed, Gallagher research shows that high volume, non targeted communication is associated with a 30% increase in leadership trust risk and a 24% increase in burnout.

This is why early communication is the secret to success. Some practical examples include:

• Clear FAQs explaining eligibility updates
• Practical examples showing how coverage applies to specific medications
• Advance notice to support continuity of care

Gallagher's 2025 Financial Benchmarking report found that 61% of employers continue to rely on employer matching as the primary contribution model. A growing number of Canadian employers are adopting this approach to secure better retirement outcomes for their employees.

Alongside this, they're also offering greater flexibility through registered retirement savings plans (RRSPs), tax free savings accounts (TFSAs) and first home savings accounts (FHSA).

Participation trends also influence plan design decisions. Automatic enrolment continues to expand, helping address lower engagement among employees earlier in their careers, without increasing employer contribution levels.

As for governance, almost three in four (71%) employers report having established processes for their retirement or savings plans, supporting stronger alignment between financial programs, business priorities and employee expectations.