This category is now table stakes, explains CEO of GroupHEALTH Benefit Solutions
With a growing focus on employee wellbeing, mental health benefits are no longer a "nice-to-have" but a crucial component of group benefits. According to the 2023 Commonwealth Fund survey,45% of Canadians aged 12 and older reported needing mental health care, and about half of them felt their needs were either unmet or only partially met.
For Matt Hendrick, CEO of GroupHEALTH Benefit Solutions, he’s seen firsthand how mental health support has evolved and why employers are increasingly prioritizing it in their benefits offerings.
“Over the last 15 years, we’ve seen a huge shift,” says Hendrick. “We started with basic Employee and Family Assistance Programs (EFAPs) that offered surface-level support. Now, tailored mental health solutions are the norm, and they’re anchored in what employees really need.”
And, according to Hendrick, GroupHEALTH's internal data reflects the changing landscape.
“When we analyzed utilization across our plans, we saw the bulk of interactions centered around mental health services like counseling,” he notes. In response to this demand, the company is set to launch a new program in October—sparrow.
“sparrow will provide access to 5,000 therapists and offer services in up to 30 languages,” Hendrick explains. “It includes iCBT [internet-based Cognitive Behavioral Therapy] and, for the first time, mental health services for children.”
Navigating regulatory changes: What employers need to know
As Canada’s government rolls out new healthcare programs like national dental and PharmaCare, Hendrick says it’s crucial for employers to stay informed about how these changes could impact existing benefit plans.
“There’s a lot of uncertainty right now,” he admits. “On one hand, expanding access makes sense—there are populations that don’t have coverage. But on the other hand, about 75% of Canadians already have employer-sponsored benefits, and shifting costs to taxpayers doesn’t always add up or lead to better coverage.”
To help navigate these challenges, GroupHEALTH is part of the Smart Health Benefits Coalition, a collective working to better understand how new regulations will impact both employers and employees. “We need more clarity from the government on how these programs will integrate with what’s already in place,” he adds.
Personalized plans for a multi-generational workforce
Employers are also grappling with a multi-generational workforce, and the demand for customized benefits is rising. However, Hendrick notes that, in the small business market, many employers are more focused on sustainability than bespoke solutions.
“We’re seeing less demand for fully customized plans,” he says. “Instead, small businesses want cost-effective solutions that still meet the same needs as larger organizations. [sparrow] fills the gaps we’ve identified through feedback from plan sponsors. We’re offering a better experience without the higher costs of bespoke plans, making it a win for both employers and employees.
“For example, we work with a lot of community service workers—healthcare aides, residential care workers—and we’ve structured our plans to meet their needs, such as lower out-of-pocket costs and reduced dispensing fees.”
Combatting rising drug costs
As drug prices continue to climb, controlling these costs is a top priority for employers. According to CIHI, in 2022, public drug program spending reached $17.2 billion, a 6.4% increase from 2021. What’s more, spending on biologics made up 29.6% of public drug spending, with some of these drugs costing over $250,000 per person annually.
“It’s one of the biggest challenges we’re all facing,” Hendrick says. “We’ve seen increased utilization, and specialty drugs are becoming a more material cost. We follow provincial formularies and cap specialty drug coverage over $10,000,” he explains. “It’s a way to maintain stability for small businesses without compromising the level of care employees receive. Mark Cuban’s work on lowering drug prices in the US is interesting. Canada could learn a lot from that approach, especially in reducing fees and ingredient costs.”
Looking ahead, Hendrick believes the key to maintaining sustainable benefits lies in addressing both drug costs and disability management.
“About 60% of plan costs come from those two areas,” he explains. “If we can focus on early intervention in disability cases and find smarter ways to manage drug coverage, we can make benefit plans more sustainable in the long term.”
