Benefits plans are a significant expense for Canadian companies and employers continue to search for ways to manage the costs according to research released today from Mercer Human Resource Consulting.

In its annual Policies and Practices Survey , Mercer surveyed 200 Canadian employers representing over 700,000 employees.

All of the companies surveyed offer at least one form of supplemental health coverage to current employees such as prescription drug coverage (100%), basic dental coverage (99%), vision care (90%) and paramedical (90%). The majority of employers pay the full cost of supplemental health benefits.

Nearly half (48%) of those surveyed also offer benefits to retirees such as extended health care, dental benefits and life insurance. The majority of companies that offer retiree health benefits pay the full cost of the benefits.

Approximately 45% of companies offer standard medical and dental benefits to all employees, whether full or part-time, and 89% offer same-sex spousal benefits. Only 8% of participants plan to provide a base salary top-up for employees taking compassionate leave. This figure is similar to the number of employers that provide a base salary top-up for employees taking parental leave.

“With governments reducing provincial coverage as Ontario did with chiropractic and physiotherapy a few weeks ago, and employees having access to more drugs and a wider variety of medical services, it is easy to see how a company’s benefits costs can quickly increase if action isn’t taken to manage them,” said Alison Schofield, a benefits consultant at Mercer Human Resource Consulting, in a news release.

“Measures such as setting dollar limits, cost sharing with employees and auditing claims can make a tremendous difference and can ensure the long term viability of the benefits plan,” added Schofield.

In a separate survey conducted in April 2004 by Mercer involving over 260 companies, one in four employers indicated they were planning to make changes to their retiree benefits plans.