Government Budgets Impact Benefits

On March 22, 2016, the 2016 Federal Budget was introduced and it does impact group benefit plans.

For group benefits, medical and assistive devices that are specifically designed to assist an individual in treating or coping with a chronic disease, illness or physical disability are zero-rated under the GST/HST. The Budget adds insulin pens, insulin pen needles and intermittent urinary catheters to the list.

For the Employment Insurance (EI) benefit, previously newcomers to the labour market or those returning after an absence of two or more years had to work a minimum of 910 hours before being eligible for EI. This 910 hour requirement will be replaced with “a regional market threshold”. As well, this budget proposes a reduction in the waiting period for EI benefits from the current two weeks to one week.

The Alberta government increased the provincial premium tax from 2% to 3% on April 1, 2016. This will apply to all insured benefit plans that have plan members in Alberta. It does not apply to Administrative Services Only (ASO) benefit plans.

In British Columbia, their Budget proposes changes to the Medical Services Plan (MSP) premium structure effective January 1, 2017. Children will be exempt from premiums and couples will pay twice the single rate. Income thresholds and premium assistance programs will also be modified. These measures will impact payroll and administration systems for MSP group Plan Administrators.

In Saskatchewan, the MRI Facilities Licensing Act came into effect on February 29, 2016. This allows residents of Saskatchewan to pay privately for their MRIs. Each privately licensed facility will set their own prices based on a number of criteria including the complexity of the scan, market demand and their own business model. This will impact benefit plans that reimburse employees for these types of medical expenses, e.g. under a Health Care Spending Plan.

Changes to Ontario Insurance Act Have Broader Implications

Changes to the Legal Actions provision found in benefit contracts will take effect on July 1, 2016. While this change only applies to insured plans in Ontario, many insurance carriers are electing to amend wording for all insured plans across the country. These insurance companies are also looking at changes to a similar clause that applies to all self-insured plans.

Sample of the new wording is as follows:

For Insured Benefits

Every action or proceeding against and insurer for the recovery of insurance mney payable under the contract is absolutely barred unless commenced within the time set out in the Insurance Act or other applicable legislation of the employee’s province or territory.

For Self-insured Benefits

Where the applicable legislation of the province or territory permits the use of a different limitation period, every action or proceeding for the recovery of money payable under the plan is absolutely barred unless it is commenced within one year of the date that proof of claim was to be submitted under the contract terms or within one year of the date disability benefits cease to be paid. Otherwise, every action or proceeding for the recovery of money payable under the plan must be commenced within the time set out in the applicable legislation of the employee’s province or territory.

Where the applicable legislation of the province or territory permits the use of a different limitation period, every action or proceeding for the recovery of money payable under the plan is absolutely barred unless it is commenced within one year of the date that proof of claim was to be submitted under the contract terms or within one year of the date disability benefits cease to be paid. Otherwise, every action or proceeding for the recovery of money payable under the plan must be commenced within the time set out in the applicable legislation of the employee’s province or territory.

Plan administrators need to be aware of these changes and be prepared to communicate them to employees.

Quebec Dental Association Stops Assignment of Benefits

The Quebec Dental Association (ACDQ) has recommended to all of their members that they stop offering Assignment of Benefits for all insurers not subscribed to Dentaide, its payment handling service. This includes many insurers including Great West Life, Manulife and Sun Life.Assignment of Benefits is an agreement between group plan members and their dentist, asking the insurer to send their reimbursement directly to their dentist.

While there is no way of knowing how many dentists will follow the ACDQ recommendation, it will impact the plan memberas they will now have to pay out-of-pocket for their dental services, submit the claim to their insurer and await reimbursement. The dentist should still be able to submit the claim online to the insurer as, to date, there’s been no mention of disruption to that service.