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Canadian Employer Medical Benefit Costs to Grow 7.0 Percent in 2021, Aon Survey Forecasts


TORONTO, October 28, 2020 – Aon plc(NYSE: AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, today announced that employer-provided medical benefit costs in Canada are forecasted to rise 7.0 percent in 2021, outpacing general inflation by 5.7 percent, according to its 2021 Global Medical Trend Rates Report.

The increase for Canada employer-sponsored medical plans expected next year is due to a combination of higher costs from the increased spend for drugs in general, reflecting the many health risk factors facing Canadians today and the expectation of the continued introduction of new and expensive therapies. While several of these risk factors are manageable through a combination of drug therapies and other wellness initiatives, employers are increasingly looking at the bigger picture to determine the approach they want to take to mitigate costs.

“The claiming patterns throughout 2020 have been significantly impacted due to the restrictions on both employees and the providers of medical and dental services due to the COVID-19 pandemic,” said Greg Durant, Canadian chief actuary for Health Solutions at Aon. “Based on our analysis, Health per capita claims on an annualized basis are expected to be almost 10% lower than expected, and Dental per capita claims are expected to be in excess of 20% lower than expected during 2020. The questions we all want answers to are when will these claiming patterns recover, and what will be the ‘new normal.’”

Globally, costs for employer-sponsored medical plans in 2021 are forecasted to increase 7.2 percent. This is mainly due to expanded benefits, higher unit costs for medical services and a decrease anticipated in general inflation.

Projected medical trend rates vary significantly by region. Costs are expected to increase the most in Middle East/Africa regions, with average medical premium rates forecasted at 12 percent. In contrast, Europe is projected to see an average medical premium rate increase of 5.5 percent.

Forecasted Health Care Benefit Cost Growth from 2020 to 2021

  2020 2021
North America
Latin America and Caribbean
Asia Pacific
Middle East/Africa

The Forecasted Health Care Benefit Cost Growth figures for 2020 were based on what was expected and are without the impact of the novel coronavirus (COVID-19) pandemic. Further, the 2021 figures are based on the expected 2020 claim level. Lastly, these projections assume the extent of lockdowns impacting utilization will be limited in the future. Durant added, “Given the relative fluidity and uncertainty of COVID-19, as well as the inherent limitations of projecting costs in this unprecedented environment, these figures should be used with caution.”

Aon's report confirms the increasing impact of non-communicable diseases on health care costs globally. In Canada, Musculoskeletal, Cardiovascular and mental health were the most prevalent health conditions driving health care claims under an employer-sponsored health care plan.

Leading Medical Conditions Driving Plan Sponsor Costs in Canada and the World

Canada Global
  1. Musculoskeletal
  2. Cardiovascular
  3. Mental health
  4. Diabetes
  5. Cancer
  1. Cardiovascular
  2. Cancer
  3. Diabetes
  4. High blood pressure
  5. Musculoskeletal

Aon’s report also confirms the growing prevalence of risks to the cost of employee benefit plans from unhealthy personal habits in Canada, such as poor stress management; excessive alcohol or drug use and insufficient sleep follow as the top health risk factors in the country. However, Aon predicts that in 2021 one of the most significant risk factors could be Occupational Risks. The need for personal protective equipment, the need to comply with social distancing measures and the related physical obstacles that are in play (e.g. plexi-glass partitions) are changing how Canadians perform the basic functions of their workplace and how they acquire and consume material goods and services. The risk of failure of these measures, including pandemic fatigue, may lead to either the real or perceived increase in the risk of infection. This will drive increased absences and the possible utilization of different services that employees may not have previously used.

Leading Health Risk Factors in Canada and the World

Canada Global
  1. Occupational risks
  2. Poor stress management
  3. Excessive alcohol or drug use
  4. Insufficient sleep
  5. Ageing
  1. High blood pressure
  2. Physical inactivity
  3. High cholesterol
  4. Bad nutrition
  5. Poor stress management

“There is still a significant amount of uncertainty regarding COVID-19’s impact on deferred treatments and long-term health care,” said Tim Nimmer, Aon’s chief global actuary for Health Solutions. “While countries navigate through different outbreak phases, the expectation is that medical plan utilization will return to normal levels during 2021 as medical services begin to reopen to the market.”


The survey was conducted among 105 Aon offices, each one representative of a country, that broker, administer, or otherwise advise on employer-sponsored medical plans in each of the countries covered in this report. The survey responses reflect the medical trend expectations of the Aon professionals based on their interactions with clients and carriers represented in the portfolio of the firm’s medical plan business in each country.

About Aon
Aon plc (NYSE: AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

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Media Contact
Alexandre Daudelin
+1 514 982 4910

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