Escalating health costs are pushing Canadian employers of all sizes to reassess how they fund and manage employee benefits, with small and mid‑sized businesses facing some of the toughest trade‑offs.
Across the market, plan sponsors are dealing with inflation in medical therapies that outpace general consumer prices, along with a steady stream of new treatments and technologies. That innovation brings better outcomes, but at a price.
“The advancement in medical technology, in care technology, has been exponential,” said Beneva’s vice president, group sales & partner experience, Ontario, Western & Atlantic Canada Sunil Hirjee (pictured). He points to “inflation on therapy at a much higher rate than on an average consumer price index,” which has put a sharper focus on how to keep programs viable.
Asked to identify the single most pressing issue his clients raise, Hirjee is unequivocal. “The most pressing matter is the cost sustainability,” he said. That priority is the same whether he is dealing with a small, family‑owned business of less than 10 employees or a multinational with thousands of employees across the country.
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While the concern is universal, the consequences can be more acute for smaller organizations. These firms often run on tighter margins and thinner overhead structures. They still have employees with diverse needs, but fewer internal resources to track plan performance, communicate changes and monitor emerging risks.
“The challenges there are that a small or a medium business still has that same diverse membership with all of those needs,” Hirjee said. At the same time, “the reality of having a budget constraint is even bigger of an issue” in that segment.
Limited headcount also makes it harder to devote staff to benefits administration. Many smaller employers lack dedicated people to interpret claims reports, keep up with new offerings or run education campaigns. That can result in underused programs or late reactions to trends that could have been addressed earlier.
In that context, Hirjee says a set of practices has emerged that can help. He describes it less as a one‑size‑fits‑all template and more as a structured approach that has proven to work.
The first component is to work with a specialist intermediary. Brokers and consultants, he argues, are not just useful for initial placement but ongoing oversight.
“Working with a qualified intermediary is part of the solution,” he said. One of their responsibilities is to review market options and “make sure that the cost drivers are not indicating any surprises,” effectively serving as a second set of eyes on plan performance.
The second element is disciplined use of data. Claims and utilization reports are standard features of group contracts, but Hirjee stresses that they must be reviewed regularly to be useful. Waiting for annual renewals can leave employers exposed to trends that have been building quietly.
“Having access to the right data and the right reporting to look at claims utilization historically is something that helps us make decisions that make the most sense for sustainability into the future,” he said. He typically recommends quarterly reviews.
Those sessions are an opportunity to identify categories where incidents are rising, assess potential cost impacts and consider adjustments. If, for example, a particular class of drugs or a specific paramedical service is growing rapidly, employers can consider whether plan design changes or other interventions are warranted.
That leads to the third component: using levers within the plan to manage exposure without simply stripping coverage. Hirjee talks about “plan alternatives that don’t necessarily remove access to care, but make sure the access to care cost is sustainable.” That can include tweaking reimbursement levels, introducing caps, steering use toward lower‑cost but clinically appropriate options, or adding prior authorization in defined cases.
Alongside those defensive measures, he encourages employers to look at options that could improve health outcomes and avoid downstream costs. That might mean enhanced chronic disease management, early‑stage mental health resources or other services aimed at reducing the severity or frequency of high‑cost claims.
“There are scenarios that can maybe help improve overall health and maybe even avoid costs that can be incurred down the line,” he said. He frames this as a second path that should be considered in parallel with more traditional cost controls.
Virtual healthcare is one of the more tangible examples he cites. In many parts of Canada, access to a family physician is limited, forcing people to rely on walk‑in clinics. For workers dealing with their own health or that of a child, those visits can absorb a significant chunk of the workday.
Virtual care “allows me as a plan sponsor to offer a service that can minimize the amount of time that my plan member may need to be out of work to go deal with a health scenario,” Hirjee said. Being able to connect with a provider from home "and not take as much time away from being a productive member of the organization” can generate operational savings that help justify the added benefit.
Mental health support can have similar effects. When employees juggle caregiving and other pressures, their attention is divided and productivity falls even if they remain physically present. Addressing these issues proactively can reduce fatigue and the subtle performance losses associated with presenteeism.
For small and mid‑sized businesses, the cumulative effect of these measures is to turn a blunt cost problem into a series of manageable decisions. Partnering with intermediaries, building a habit of quarterly data reviews, refining plan design and selectively adding services that support productivity can help offset the impact of rising medical inflation.
Hirjee argues that this type of structure is essential as costs continue to climb. Without it, employers risk being forced into abrupt cuts or steep premium increases. With it, they stand a better chance of maintaining coverage that employees value while keeping budgets within acceptable bounds.
