May 16, 2017

Canada, Toronto

Employers and plan sponsors must embrace technology and flexibility to meet challenges posed by higher costs, shifting demographics and a more mobile workforce.

Mercer, a global consulting leader in advancing health, wealth and careers, today predicted that health benefits costs to employers would climb by 130% by 2025.

Announced at Mercer’s inaugural Future of Healthcare: Evolution to Revolution event series, the higher costs are expected to be driven by specialty drugs, higher rates of chronic and mental illness, increased benefits fraud and increased health pooling costs. Along with an increasingly diverse and mobile workforce, this highlights the challenges employers will face as they compete for talent in a challenging healthcare world.

But these challenges are matched with opportunity: employers that understand the issues will be able to plan for, and succeed in, the long term.

“As costs rise, employers need to step up to remain competitive,” says Brian Lindenberg, Partner and leader of Mercer Canada’s Health Practice. “This means embracing the personalization of benefits enabled by technology, leveraging innovative funding models, and offering more flexible plans in keeping with the needs of a more diverse and ever-changing workforce.”


The modern workforce, with up to 5 generations in the workplace, is more diverse in its wants and needs than ever. By 2025 this trend will be even more pronounced.

This means that employers must:

  • Develop relationships with specialty vendors: With the availability of specialty drugs to treat specific diseases driving higher costs, Mercer stresses that employers must develop relationships with a broader range of vendors, in order to provide targeted services and communications, better access to healthcare practitioners, and better manage costs.

  • Begin to shift from the traditional group benefits model: The traditional model is not responsive to consumer demand. Younger and more tech-savvy workers want customizable plans that match their unique healthcare needs.

    Voluntary benefits, including a defined contribution model and taxable and non-taxable healthcare spending accounts, are a promising method of cost control. The existing voluntary benefits market in Canada is relatively small, less than $20 million in annual premiums compared to approximately $5 billion in the United States.  The success of this model in the United States shows promise in Canada for benefit plan sponsors, allowing more choice, lower costs and portability, and employers looking to adapt to a changing workforce should strongly consider implementing them.

  • Leverage data to truly personalize benefits: Wearable technology, genetic testing, claims and demographic data all contribute to our understanding of an individual’s likely health needs and advancements in data science will allow benefits to be truly personalized. As this area of healthcare science develops, employers must be prepared to present employees with an optimal benefits plan, based on data, to improve employee engagement with benefits, improve retention, and bolster their position with respect to their competitors.


The healthcare space in Canada is undergoing unprecedented technological and demographic transformation and these same forces also promise to transform the workplace. “The status-quo solutions offered by the market today will not meet the needs of tomorrow’s workforce,” concludes Lindenberg. “That’s why we’re working to help employers get ready for the change.”

Mercer Canada’s 1st annual Future of Healthcare events are scheduled across the country between May 16 and June 13, 2017. 
For more information please visit: https://www.mercer.ca/en/our-thinking/the-future-of-healthcare.html


Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and careers of their most vital asset – their people. Mercer’s more than 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With annual revenue of $13 billion and 60,000 colleagues worldwide, Marsh & McLennan Companies is also the parent company of Marsh, a leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting.  For more information, visit www.mercer.ca. Follow Mercer on Twitter @MercerCanada.