TORONTO — Canadian insurance companies are slashing premiums in a bid to help small- and medium-sized businesses grappling with COVID-19.
The declining use of dental benefits and some extended health care benefits have pushed the Winnipeg-based insurer Canada Life Assurance Co. to offer premium reduction adjustments for employer-sponsored group benefits plans.
Canada Life President Jeff Macoun said the reductions will be 50 per cent for dental and 20 per cent for vision and extended health care benefits, excluding prescription drugs.
“Unlike premium deferrals, these savings do not need to be repaid later, and reflect that some healthcare service providers have shifted to virtual treatment, while others are offering more limited services,” he said in a statement.
Canada Life said prescription drugs are not included as the services are essential and the number of claims have not dropped.
The company said the premium reductions will be retroactive to April 1 with credits applied to May invoices.
“Over 1 million Canadians were laid off in March alone, and financial insecurity is growing,” he said.
“These premium reductions will give more than 26,000 of our business customers some much-needed financial relief, both to their business and to maintaining valued coverage for their employees.”
Over at Sun Life Financial Inc., credits against dental and non-drug-related extended health care premiums will be offered in hopes of reducing invoices for Canadian businesses, who are already struggling with low cash flow.
The insurance company will offer 50 per cent credit per month against paid dental premiums because most routine dental visits have stopped during the pandemic.
For non-drug-related, extended health care premiums it will offer a 20 per cent credit on each of a client’s extended health care benefits.
“Prescription drug usage has not declined during the pandemic,” said Dave Jones, the senior vice-president of group benefits at Sun Life Canada, in a statement.
“Plan members are using an increased volume of virtual care across their paramedical providers, however usage has still reduced.”
April credit in both areas will be applied to June invoices and Sun Life will continue to assess the offerings on a monthly basis.
Meanwhile, Manulife Financial Corp.’s said in an email to The Canadian Press that all group benefit plan sponsors, including small, medium and large-scale businesses, who have a fully-insured, non-refund benefits plan will be given premium relief.
Manulife will reduce their dental premiums by 50 per cent and their extended health care premium, including prescription drugs, by 10 per cent in the month of May.
Manulife said coverage for plan members will not change and the premium reductions will be applied to regular pre-authorized debit draws for May.
This report by The Canadian Press was first published April 17, 2020.
Companies in this story: (TSX:GWO, TSX:SLF, TSX:MFC)
Tara Deschamps, The Canadian Press