Jackson And Associates
Current Trends

Changes in Quebec Drug Plan

Quebec has introduced changes to their out-of- pocket and co-insurance amounts amountseffective July 1, 2016 and also through amending the Act respecting prescription drug insurance.

The annual out-of- pocket maximum increased to $1,046 from $1,029 and the amount RAMQ pays decreased to 65.5% from 66%. These changes will impact on any benefit plan designs that “mirror” the provincial plans.

The Minister of Health and Social Services amended the Act to allow for tenders with accredited drug manufacturers for the purpose of establishing the price of a medication or medical supply. This amendment also allows the Ministry to enter into a contract establishing conditions for the supply to pharmacists and the wholesalers profit margin. In return, the wholesaler will have exclusivity as regards the medication or medical supply. This will have an impact on drug formulary costs for plan sponsors with employees residing in Quebec.

Protection for Gender Identity

On June 10, Quebec passed an Act to improve the situation of transphobia and, in particular, transgender minors. In a similar fashion, British Columbia passed Bill 27 on July 25 to include “gender identity or expression” among the protected grounds covered under the Human Rights Code.

Both of these changes are consistent with Federal Bill c-16 which was introduced for first reading in the House of Commons on May 25, 2016. These changes will impact on the definition of dependents under an insured benefit contract.

Recent Court Decision Impacts Retiree Benefits

An arbitrator’s ruling on August 2nd has resulted in benefits being terminated for eight retirees. In April 2015 the Sensient Flavours Canada plant in Cornawall closed. By January 2016, the company had notified the United Steelworkers Local 13292 and the retirees that their group benefits would end on April 20, 2016 despite language in the collective agreement stating “upon retirement, all present employees, surviving spouses and dependants, shall be provided with full benefits”. The union grieved the end of these retiree benefits which included group life insurance, health and dental coverage.

There are two key elements in the arbitrator’s decision that are important for a plan sponsor to consider, as follows:

  1. The wording in the group insurance policy master contract with Industrial Alliance Insurance included a requirement for minimum participation that stated: “at all times, the number of participants shall not be less than 100% of eligible employees and not less than 26 participants” (this requirement did not appear in the benefit booklets provided to employees or retirees)

  2. The collective agreement included language about the insurance contracts prevailing, specifically “Each employee will receive a document detailing the benefits. The summary is intended to provide you with a convenient outline of the more important terms and conditions of our benefits; however, the respective insurance company master contracts are the governing documents and are hereby incorporated into the Collective Agreement by reference.”

Lower Smoking Equals Lower Medical Costs

A recent U.S. study found regions with lower smoking rates had substantially lower medical costs when compared from 1992 through 2009. The researchers conclude that the findings add to the evidence showing tobacco-control interventions pay off.

For more information access the study at “Smoking Behaviour and Healthcare Expenditure in the United States, 1992-2009: Panel Data Estimates” at PLOS Medicine.