A Formula for Disaster
Insurers design protection against catastrophic drug claims!
On April 3, 2012, The Canadian life and health insurance industry announced an industry-wide drug pooling agreement to help mitigate the impact of high drug costs on fully insured employer drug plans.
This is a positive step for the industry and great news for employers who have a fully insured plan as it allows them to sustain the group drug benefit program in the event that one or more employees has a recurring, very high cost prescription drug claim.
Under the program, insurers share the costs of the most expensive drug claims in order to minimize the impact of high-cost specialty drugs on private benefits plans. The pooling agreement applies to fully insured plans and will come into effect on Jan. 1, 2013.
According to CLHIA, since 2008, claims for high-cost drug treatments have been increasing by more than 20% a year in the group insurance sector. With the new pooling agreement, insurers will no longer include claims for high-cost drug treatments when setting an employer’s premium.
The participating insurers so far are Alberta Blue Cross, Assomption Vie, The Co-operators, Desjardins Financial Security, Empire Life, Equitable Life, GMS Group Medical Services, Great-West Life, Green Shield Canada, Industrial Alliance, La Capitale, La Survivance, Manitoba Blue Cross, Manulife Financial, Medavie Blue Cross, Pacific Blue Cross, RBC Insurance, Saskatchewan Blue Cross, SSQ Financial Group, Standard Life, Sun Life Financial, Union Vie and Wawanesa Life.
Find out more on how this new initiative can help sustain your plan at our breakfast seminar.
BC Drug Reform Update
In 2010, the B.C. government made an agreement with the B.C. Pharmacy Association and the Canadian Association of Chain Drug Stores to reduce the price of generic drugs. The Ministry of Health is terminating the agreement effective April 1, 2012, and proceeding to draft legislation with a goal of further reducing the price from 35 per cent for generic drugs to 25 per cent of the cost of brand name drugs by April 1, 2013.
As with the previous phases of drug price reform, these latest changes are expected to have a positive impact on drug claim costs for plan sponsors and plan members.
Please contact our benefit specialists to review your benefit plan to realize more savings with the updated drug reforms.
Federal Budget 2012: Group Sickness and Accident Insurance Plans Become Taxing
Finance Minister Jim Flaherty delivered the Federal Budget on March 29, 2012.
B.C. aims to slash generic drug prices
B.C. is drafting legislation to make generic prescription drugs cheaper! 
In a move to follow the Ontario legislation, the B.C. government aims by April 2013 to drive generic pricing for prescription drugs down to 25% of the brand name cost. Currently generic drugs cost as much as 40% of their brand-name drug counterparts.
There has long been compelling arguments for Plan Sponsors to switch from brand name coverage to generics. Plan sponsors can save significantly by introducing generic substitution clauses into their group benefit plans. If generic penetration in Canada was increased by just 1%, drug plans would save an estimated $229 million annually. With the new legislation the argument is even stronger for employee benefit plans to switch to generic coverage on prescription drugs.
What are Generic Drugs?
Generic drugs are copies of brand-name drugs that are produced once the brand-name drug’s patent has expired. Brand-name drugs and their generic alternatives have bioequivalent medicinal ingredients; that means the medicinal ingredients are chemically identical. Generic alternatives may look different than their brand-name drug equivalents, but they work the same.
For more information please contact us!
Read the full article here.
Business in Vancouver Article
Check out our article in the special edition of Business in Vancouver: Planning for your business.
Our own president and founder Diane Dupuis discusses the relationship between healthy employees and a company's ROI. It looks like corporate wellness initiatives are here to stay!
A corporate wellness program should focus on changing poor health habits and improving communication in the workplace. It requires commitment from the top, judicious planning and an integration of business objectives with employee needs. Employers who were quick to recognize the positive correlation between healthy lifestyles and a healthy profit margin report that wellness programs produce a healthy return on investment. They describe savings of $4-$5 dollars for every $1 invested in health promotion.
If you'd like to develop a wellness program contact us and we'd be happy to help!
Reminder: CPP changes take effect in January
Changes to the way employers deduct Canada Pension Plan (CPP) contributions are coming into effect in the new year.
Starting Jan. 1, 2012, employers must deduct CPP contributions for all employees aged 60 to 65—even if the employee is receiving a CPP or Quebec Pension Plan retirement pension and did not contribute previously.
Employers must also deduct CPP contributions for all employees who are 65 to 70 years of age unless the employee elects not to contribute to the CPP by giving you a signed and completed copy of Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election. He or she must also send the original to the Canada Revenue Agency (CRA).
Employees cannot contribute to the CPP after the month in which they turn 70 years of age.
The CRA can assess you for failing to deduct CPP contributions or for failing to remit CPP contributions to the CRA as required. The assessment may include penalty and interest charges. For more information, go to cra.gc.ca/payroll and select “Penalties, interest, and other consequences.”
Employees working in Quebec and other workers not subject to the CPP will not be affected by these changes.
For more information about what the changes mean for employers, visit cra.gc.ca/cppchanges-employers.
