As we enter 2025, the landscape of group benefits plans is rapidly evolving, especially with the rise of high-cost medications like biologics and gene therapies. Pooling charges, which protect organizations from catastrophic claims, are more critical than ever. 

If you’re new to pooling charges, think of them as a safety net for your organization. These fees protect you from the financial risks of catastrophic claims, especially those involving high-cost prescription drugs that exceed the stop-loss threshold. Typically calculated as a percentage of your premiums or claims, pooling charges are crucial in today’s healthcare market, which is shifting towards more specialized and expensive treatments. To dive deeper into what pooling charges are, check out our past blog article. As businesses strive to sustain their benefits plans, pooling charges are becoming an essential piece of the puzzle. 

The Rising Tide of High-Cost Medications 

The increase in high-cost drugs has placed a greater strain on benefit plans. Medications for specialized conditions like cancer, rheumatoid arthritis, and rare genetic disorders can cost thousands of dollars per treatment, creating the potential for catastrophic claims. The introduction of new therapies for more common conditions and weight-loss medications, such as Ozempic, adds further complexity, with employers now facing the challenge of whether to classify these as standard benefits or lifestyle drugs. Regardless of classification, the financial impact remains significant. 

Given how pooling charges protect organizations from rising costs, it’s crucial to optimize them as part of your broader benefits strategy. With drug prices and prevalence continuing to climb, ensuring that your pooling charges are appropriately aligned with your organization’s needs is more important than ever to protect your organization from sudden, large expenses while maintaining comprehensive coverage for employees. 

Managing High-Cost Drugs  

To manage the impact of rising drug costs, it’s essential to evaluate and adjust your pooling charges periodically. Here are some practical steps to consider: 

1. Review Stop-Loss Levels and Pooling Charges
   The first step in optimizing your pooling charges is reviewing your stop-loss levels. This is crucial because your stop-loss level determines the point at which your insurance coverage gives way to the larger Canada-wide drug pool. By adjusting these levels, you can strike a balance between the financial risks posed by high-cost claims coming onto the plan’s experience and the associated charges of your pooling program. 

1. Explore Carrier Options
   Not all carriers offer the same pooling programs. When appropriate or recommended by your advisor, comparing options from different insurers can help you find one with a more favorable pooling structure. While some carriers may have higher pooling charges, they might offer better overall support for high-cost medications. Take the time to analyze the pros and cons of each option and select the one that best aligns with your organizational needs. 

1. Assess Drug Caps for Specialty Medications
   For many organizations, implementing drug caps is a strategic way to help control pooling charges. This approach can limit the cost exposure of the plan and lower pooling charges, especially for plans with specialty medications that push claims above the stop-loss threshold. While this may help mitigate costs, it’s important to evaluate how it impacts your employees’ access to necessary treatments. Work closely with your benefits consultant to determine the right balance between cost-saving measures and ensuring adequate coverage for your team.
    

The Importance of Having a Benefits Consultant by Your Side 

Managing pooling charges, especially in the context of rising drug costs, is no small task. With so many moving parts—stop-loss levels, drug caps, and carrier options—navigating the complexities of your group benefits plan can be overwhelming. That’s where a benefits consultant comes in. 

At Navigate Benefit Solutions, we specialize in analyzing and optimizing benefits plans, ensuring that your pooling charges and overall structure are tailored to meet the unique needs of your business. Our team of experts can help you find the right balance between risk and cost, ensuring that your benefits program remains financially sustainable while offering top-notch coverage to your employees. 

Proactively Navigating Rising Drug Costs 

The rise of high-cost medications is a reality that will continue to challenge benefits plans in 2025 and beyond. By optimizing your pooling charges, reviewing stop-loss levels, and staying proactive, you can manage the impact of these rising costs while still offering competitive benefits to your employees. 

Remember, navigating the complexities of group benefits requires both expertise and foresight. By partnering with a knowledgeable benefits consultant, you can stay ahead of emerging trends and make the best decisions for your organization’s bottom line. 

If you’re ready to dive deeper into your group benefits plan and optimize your pooling charges for 2025, contact us today.