Group Benefits

COVID-19 Impact On Benefits

The pandemic has impacted group benefit plan coverage and how insurers are administering certain benefits.

These include the following:

Travel Coverage where most insurers have agreed to cover eligible expenses, including those related to COVID-19. In most cases however, this coverage will not apply for plan members travelling to countries for which the Government of Canada has issued a Level 4 travel advisory (“Avoid All Travel”).

Coverage for Personal Protective Equipment (PPE) worn by Dentists and other practitioners have now been included as a surcharge in their bills to plan members. Most insurers have decided that the surcharges for PPE that are submitted as part of a dental or other extended health care benefit will be deemed ineligible.

Pre-existing Condition Clauses should not be reinstated for plans that have temporarily been suspended due to the pandemic. Further, there should not be any penalty for reinstating the plan

Health Care Spending Account (HCSA) plans have had the rules relaxed around carry-forward credits as a result of changes introduced by the Canada Revenue Agency. For plans that offer a HCSA, you can choose to extend the carry-forward rule by an additional 12 months. This applies to all types of HCSA plans with unused credits expiring between March 15, 2020 and December 31, 2020, including:

• Balance carry-forward
• Expense carry-forward, or
• No carry-forward

For more information on how to affect this deferral or ensure the HCSA is being used effectively, please contact us.

Cost Drivers for Drugs – A New Trend

According to the Telus Health Annual Drug Trends Report, the two drivers resulting in a spike in drug costs in 2019 are attributed to speciality drugs and an increase in younger Canadians using medication for mental-health challenges.

Provincially, Ontario saw the largest spike and, even when the OHIP+ was rolled back and costs for plan members under age 25 were removed, the resulting increase was still 5.4% compared to a decrease of 2.4% the prior year. Quebec saw increases of 5.8%, followed by the Atlantic provinces at 4.2% and western provinces at 4.0%. A deeper dive indicates the eligible cost per claim was up 3% over the prior year and the number of claims per claimant continues to increase as well and hit 10.3. By age group, there was an increase of 11.6% for plan members between ages 25 to 29 due to an increase in mental-health-related drug claims. For plan members ages 25 to 64, the average eligible monthly cost for speciality drugs increased by 10.1%. The top three treatments using speciality drugs are for rheumatoid arthritis, cancer treatments and skin disorders.

There are programs available to support the use of certain speciality drugs through some provincially sponsored plans as well as from some pharmaceutical companies. These are available to the individual and family and please do contact us for more information.

Growth in Virtual Care & Pharmacogenetics

The 2020 Sanofi Canada Health Care Survey showed that 71% of those surveyed would be willing to receive health care services through secure digital chat or video devices where the health care professionals aren’t the member’s usual providers but would be able to share the consultation information with them if requested. This percentage was higher for plan members between ages 18 and 34, at 76%, compared to those age 55 and older at 63%.

The same survey found 74% of plan members would be open to allowing the use of pharmacogenomics to ensure the medication being prescribed would be more effective. Pharmacogenomics is a form of “personalized medicine” and is one of several types of genetic testing available for medical purposes. The test results determine whether a person has certain genetic mutations that are known to influence their response to a drug in a certain way. The goal is to identify who will benefit from a medication, who will not respond at all and who will experience negative side-effects. Based on that information, a physician or pharmacist could choose medications better suited for that individual.

It is acknowledged that there are many factors in addition to an individual’s genes that play a part in their response to a particular drug, such as demographics, lifestyle, co-morbidities, and other drug therapy. Studies continue on the use of pharmacogenomics on treatment for specific conditions and, to date, pharmacists have been sharing the results of testing with prescribing physicians who have accepted the majority of their recommendations. More insurers are recognizing the importance of this testing and some support it as an opportunity to optimize drug therapy and improve patient health. With costs for Drugs increasing, we suggest plan sponsors ensure every action is being taken by their insurer to effect the best result for their plan members while managing costs associated with providing prescription drug coverage

Group Savings

COVID-19 Relief Measures for Plan Sponsors

To support plan sponsors and members during the pandemic, the following sponsors have made temporary changes to pension plans.

Alberta

If the registered pension plan is being amended to reduce employee contribution rates only, then rather than having to provide 30 days advance notice to plan members, the notice can be issued within 60 days after the implementation of the change.

Manitoba

The filing deadlines for Annual Information Returns (AIRs) have been extended as outlined in the following chart:

Newfoundland and Labrador

The filing deadlines for Annual Information Returns (AIRs) has been extended as outlined in the following chart:

Ontario

The Financial Services Regulatory Authority of Ontario (FSRA) released the Pension Sector Emergency Management Response which includes the following:

• Plan administrators do not require a witness for prescribed forms while operating under COVID-19 conditions
• Employers and plan members are required to contribute in accordance with the PBA and their plan text, however, if the plan permits, a member may choose to suspend their contributions and any employer contributions for that member will also be suspended
• Plan sponsors can decide if contributions need to continue for an employee when earnings are reduced or not being paid

The following extensions are in place if original dates were between June 18, 2020 and Dec. 31, 2020:

Legislative

Annual Changes to RAMQ Rates

As of July 1, 2020, changes have been made to the Quebec provincial drug plan for both the out-of-pocket maximum and co-insurance amounts which will affect plan sponsors who provide drug coverage to members residing in Quebec.