Projected Benefit Cost Increases

The recent Willis Towers Watson annual global medical trends survey suggests the cost of health benefits in Canada will increase by 9.4% in 2017. Initially projected at 7.8%, the additional increase is primarily due to high-cost drugs with the top three conditions being treatment for cancer cardiovascular disease and respiratory illness which insurers don’t anticipate will change in the next five years.

Wellness and prevention programs are becoming more popular however treatments for mental health and stress are still not covered by the majority of insurers.

Impact of Legislated Changes in Quebec

As at July 1, 2017, Quebec made changes to the public drug plan that impact out-of-pocket maximum and co-insurance amounts. These changes will impact on benefit plans that provide coverage to plan members residing in Quebec as the annual out-of-pocket maximum increases to $1,066 from $1,046 and the amount RAMQ pays (the co-insurance) decreases to 65.2% from 65.5%.

Any resulting increases in costs to the plan member will now be picked up by the employer sponsored plan.

We had mentioned in an earlier bulletin that Bill 92 had been adopted and it will come into effect September 15, 2017. This will introduce greater transparency and more details on all drug receipts for drugs eligible under the Quebec public plan including:

• DIN cost
• Wholesalers mark-up, and
• Where the employee lives in Saskatchewan but works outside that province, neither the employer nor the employee premiums are taxable.

Regardless if the group benefit plan is billed by the insurer or your company prepares the billing statement and submits payments, we suggest you contact the insurer (or plan administrator) to determine how the tax will be applied and who will be responsible for remitting it to the government.

Update on new Saskatchewan Tax

The effective date for the provincial sales tax (PST) of 6% applying to insurance premiums is August 1, 2017. Both insured and Administrative Services Only (ASO) arrangements are subject to the tax and relate to premiums payable on or after August 1, 2017 using the following criteria:

• Where the employee lives and works in Saskatchewan, both the employer and employee premiums are taxable
• Where the employee lives outside of Saskatchewan but works in that province, the employer premiums are taxable but the employee premiums are not
• Where the employee lives in Saskatchewan but works outside that province, neither the employer nor the employee premiums are taxable.

Regardless if the group benefit plan is billed by the insurer or your company prepares the billing statement and submits payments, we suggest you contact the insurer (or plan administrator) to determine how the tax will be applied and who will be responsible for remitting it to the government.

New Brunswick Changes Impact Employers

The addition of “family Status” to the Human Rights Act in New Brunswick will obligate employers to accommodate employees for a variety of situations including:

• An employee is unable to find childcare for a period of time, and
• An employee provides care to an elderly parent

Prior to this becoming the employer’s responsibility however, the employee must establish they have made reasonable efforts to meet the childcare or eldercare obligations through alternative solutions and no such alternative solution was reasonable accessible.

Ontario Youth Drug Coverage

In April 2017, the Ontario government announced the creation of a new drug program called “OHIP+ : Children and Youth Pharmacare”. This scheduled to be effective January 1, 2018 and will cover all drugs listed on the Ontario Drug Benefit program (currently over 4,400 drugs) fully for everyone age 24 and under and regardless of family earnings or whether they have private insurance. There is no deductible or co-payments.

This will have a material impact on employer sponsored drug benefit plans if implemented.

Important Contract Terms for Travel Medical Benefits

Standard policy provisions state this coverage will cover any emergency medical claims however it’s important to understand if there are any exclusions for existing conditions and even if there is wording that states there are not provided the condition is “stable” – what stable means. Typically there will be a stated period of time (90 days is common) immediately preceding the departure where the insurer will want the following:

• Has the condition been controlled by the same medications and dosages prescribed by a medical professional and, if not, then in the opinion of that medical professional, will the individual be cleared for travel
• Has the individual consulted a medical professional and been investigated or diagnosed with a new medical condition
• Is the individual scheduled or awaiting a future appointment for examinations, tests or investigations (including results) for a potentially undiagnosed medical condition
• Is the individual scheduled or awaiting any surgical procedures

In all cases, an individual should contact the insurer providing the coverage to ensure they are fully covered by disclosing this type of information to them.

Medicinal Marijuana – An Insurer’s Obligation

There have now been precedents set where a drug benefit was ordered to cover a medicinal marijuana claim by a court of law. In both circumstances, the employee was covered through a Welfare Trust administered through their union.

In these incidences, the Trust argued that the claim, which in both cases was due to an injury that was job related, was not covered due to the following:

• Cannabis had not been recognized by Health Canada and, therefore, there was no drug identification number (DIN), and
• The injury was the result of a workplace accident and should be covered by Workers Compensation or the provincial medical plan

In the case of Skinner v Board of Trustees of the Canadian Elevator Welfare Trust Fund, Mr. Skinner complained to the Nova Scotia Human Rights Commission and the Board of Inquiry ultimately ordered the Trust to reimburse certain expenses.

At present, the implication to insurers and plan sponsors is to state medical marijuana is explicitly excluded from coverage, if that is the intent. Another option is to have it covered but only after alternative treatments have proven ineffective and cannabis has been prescribed as the best solution. In either instance, it is imperative that the insurer (or plan administrator for a Trust) be involved in developing the policy wording.