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Report To: General Government Committee
Date of Meeting: April 19, 2021 Report Number: LGS-015-21
Submitted By: Rob Maciver, Director of Legislative Services
Reviewed By: By-law Number:
File Number:
Report Subject:
Andrew C. Allison, CAO
Retiree Health Benefits
Recommendation:
1.That Report LGS-015-21 be received for information.
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Report LGS-015-21
Report Overview
At the Council meeting held on March 1, 2021, Staff were directed to report back on the
increased cost and coverage including out of country travel coverage, for retiree health
benefits.
1. Background
Retiree Benefit Coverage
1.1 Retiree benefits provide eligible employees the following benefit coverage from date of
retirement to age 65: extended health benefits, including prescription drugs, vision care,
paramedical services and out of country travel, dental, and life insurance.
1.2 CUPE Local 74 and Clarington Fire Fighters Association Local 3139 have specific
provisions for retiree benefits in each of their Collective Agreements outlining eligibility
criteria. Non-affiliated staff have the same eligibility criteria as both groups.
Out of Country Travel Claims/Costs (active and retired employees)
1.3 In order to protect the benefit plan against the impact of any unusual claims occurring
outside of Canada, a pooling arrangement is included for these claims. The full amount
of each claim is removed from the Municipality’s claims experience when determining
rate renewals. Thus, protecting future rate increases against any unusual out of country
claims. This would include any claims resulting from COVID-19 related illnesses.
1.4 Out of Country Travel claims as a percentage of all extended health claims for the last
three years are as follows: 2017/2018 – 0.7 per cent, 2018/2019 – 0.2 per cent,
2019/2020 – 2.4 per cent. This includes claims for active and retired plan members for
all groups.
1.5 Sun Life applies a pooling charge for this arrangement. This charge is determined
based on Sun Life’s overall out of country claims costs on their entire block of business.
1.6 Sun Life provides an overall premium rate for extended health benefits. They estimate
that based on their entire book of business the cost of Out of Country Travel benefits for
a single retiree is anywhere from $24 - $36 per year. They have not implemented any
additional charges for Out of Country Travel because of the COVID-19 pandemic.
Travel Advisories and Travel Restrictions
1.7 On March 13, 2020, the Government of Canada put an official global travel advisory into
effect advising against non-essential travel outside Canada. This advisory remains in
effect. This advisory does not restrict Canadians from travelling outside of Canada.
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Report LGS-015-21
1.8 In addition, all travellers arriving into Canada, 5 years of age or older, are required to
show a negative COVID-19 molecular test result taken within 72 hours of their
scheduled time of departure or prior to crossing the border into Canada.
2. 2020 Benefit Renewal
2.1 Through Council Resolution #C-437-20 (Report COD-019-20) the renewal for the Health
Benefit Program with Sun Life was renewed through to November 1, 2021.
2.2 The renewal included an overall 4.4 per cent net decrease in cost of the benefit
program. Extended health coverage claims, which includes Out of Country Travel, had
a reduction of 7.7 per cent in total claims costs resulting in a 12 per cent decrease in
premiums for this category.
3. Current Situation
3.1 Travel advisories remain in effect with on-going requirements to quarantine upon return
to Canada and to provide a negative COVID-19 molecular test result taken within 72
hours prior of return. These factors may influence retiree members’ decisions to travel
out of Canada, as they have active members.
3.2 Sun Life has not implemented additional charges relating to Out of Country travel
benefits.
3.3 It is anticipated that the 2021 Health Benefit Program renewal will also be impacted by
the ongoing COVID-19 pandemic as it was in 2020. Many service providers have yet to
return to pre-pandemic service levels. At this time, it is too early to determine if the
impacts will result in decreased premium rates as they did for the 2020 renewal.
4. Concurrence
This report has been reviewed by the Director of Financial Services/Treasurer who
concurs with the recommendation.
5. Conclusion
It is respectfully recommended that this report be received for information.
Staff Contact: Lisa Wheller, Human Resources Manager, 905-623-3379 ext. 2205 or
lwheller@clarington.net
Interested Parties:
There are no interested parties to be notified of Council's decision.