This is not a delayed April fools joke. Many insurers are in fact reducing your group insurance premiums and this initiative is met with a sigh of relief by small businesses.
These announcements come as insurers review claims data across their blocks of business. While some health care providers have shifted to virtual services, many have reduced the scope of their services and this has translated into a reduction in the amount of claims submitted overall.
Insurers are choosing to credit plan sponsors as a way to relieve financial pressure brought on by COVID-19. This initiative only applies to fully insured plans (non-refund accounting). Benefit plans that are self-insured or participate in surpluses automatically benefit given the nature of the underwriting arrangement.
Here’s what insurers have announced so far:
Canada Life (previously Great-West Life)
50% reduction in dental premiums and 20% reduction in health premiums (excluding prescription drugs) retroactive to April 1, 2020.
Desjardins Insurance
70% reduction in dental premiums retroactive to April 1, 2020.
Industrial Alliance (updated April 21, 2020)
60% reduction in dental premiums for the month of April, applied to the June benefit statement.
Empire Life (updated April 21, 2020)
50% reduction in dental premiums and 10% reduction in health premiums (including prescription drugs) for the month of April. Credit will appear on June statement.
Equitable Life
50% reduction in dental premiums and 20% reduction in health premiums (excluding prescription drugs) retroactive to April 1, 2020.
Manulife Financial
50% reduction in dental premiums and 10% reduction in health premiums (including prescription drugs) effective May 1, 2020.
Medavie Blue Cross
50% reduction in dental premiums and 10% reduction in health premiums (including prescription drugs) retroactive to April 1, 2020.
To reduce issues related to plan administration, plan sponsors can choose to defer the credit to renewal.
RBC Insurance
50% reduction in dental premiums and 10% reduction in health premiums (including prescription drugs) for the months of April and May. Credit will appear on June statement.
Sun Life Financial
50% reduction in dental premiums and 20% reduction in health premiums (excluding prescription drugs) retroactive to April 1, 2020.
SSQ Insurance
60% reduction in dental premiums for the months of May and June 2020.
Note that rates remain unchanged and the the credit is applied directly to your premiums. Employers do not need to apply for this refund, it is automatically credited to the benefit statement. Employees and their families continue to have access to the full benefit coverage (many health care professionals remain available for urgent care).
This initiative is one of the many options made available by insurers. In some cases, it may be possible to delay your group insurance renewal or even suspend parts of your benefit plan temporarily. Contact your group insurance advisor for details specific to your plan.
Insurers have committed to reassessing the situation monthly with the expectation that refunds will continue as long as the trend maintains itself.
Information is valid as of the date published.
