How will OHIP+ rollback affect plan sponsors?

February 4, 2019

The Ontario government is proposing a rollback of OHIP+, which would restrict the free prescription drug coverage program to dependants under age 25 who aren’t covered by private plans.

The previous Liberal government implemented the program in January 2018 with an estimated cost of $465 million annually. It covered all OHIP-insured dependants under age 25 for the 4,400 drugs currently paid for by the province.

If the legislation is passed, some of the cost will shift back to employers. “From an overall perspective, we’re not talking big money, with a blanket adjustment estimated at about two to five per cent in additional premium costs before taking into account new drug and inflation costs,” says Sherry Shaw, vice-president of benefits and health at Accompass Inc. “But in some cases, the cost could be as much as $100,000.”

The draft regulations for the new regime introduces an “either or” approach. It defines a private plan as any type of employer, group or individual plan, program or account that could (potentially) provide coverage for any drug product at all.

What that means is individuals who have any coverage at all under any type of private plan must look solely to the private plan for coverage whether or not the plan fully covers the cost of the drug, whether or not maximum limits have been reached under the plan, and whether or not the plan covers the particular drug at all.

But one senior employee benefits lawyer, who spoke to Benefits Canada on condition of anonymity, says their firm has had “no reaction” from clients. “I thought we would have had at least a few calls,” says the lawyer. “But maybe it’s because we’re just going back to the world as it was 18 months ago, before what was regarded by many employers as a windfall came along.”

Still, Shaw advises employers to take stock of their new situation. “Companies are now going to have to make a paternalistic decision about what to do for their employees. But it’s also an opportunity to review their exposure, as well as how any decision will affect their ability to attract and retain talent.”

Ultimately, Shaw believes, employers won’t opt out of benefits plans. “They’re going to work with their consultants and internal partners to support the plan’s members and sustainability,” she says. “There are many ways to manage costs.”

Ironically, perhaps, the possibility exists that the changes could encourage some employees with high drug costs that would have been covered under OHIP+ to quit their jobs in order to obtain access to the drugs.

“All the more so because programs like the Trillium Drug Program [which provides support for individuals with significant drug costs that are disproportionate to their income] remain unchanged,” says Shaw.

Finally, there appear to have been no public complaints about the rapid turnabout in the regime. Most observers believe the general availability of employers’ historical records about their group members will facilitate the transition.

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