GroupNews – February 2019
Eckler’s GroupNews monthly newsletter provides commentary on the issues affecting Canadian group benefit plans.
In this edition:
New guidance on PHSPs for plan administrators and members
On January 30, 2019, the Income Tax Rulings Directorate (Directorate) released further guidance to plan administrators and members on Private Health Services Plans (PHSPs). A PHSP is defined as a contract of insurance in respect of medical and/or hospital expenses, a medical care insurance plan, a hospital care insurance plan, or a combination of the two plans.
The Directorate reviewed whether employer-paid premiums for a health and medical plan on behalf of an employee should be excluded from the employee’s income. Generally, employment benefits provided in cash or in kind are included in an employee’s income (pursuant to paragraph 6(1)(a) of the Income Tax Act). However, PHSPs are excluded from an employee’s income.
In the situation outlined in the guidance, the employee is enrolled in an insurance plan from Blue Cross/Blue Shield, with the purpose of reimbursing the employee for certain medical and healthcare costs incurred in the U.S.
The Directorate notes that a plan is considered a PHSP if “all or substantially all” of the premiums paid relate to medical expenses that are eligible for a medical expenses tax credit. Eligible expenses are not limited to expenses paid in Canada, or medical services provided in Canada.
Impact: The Directorate does not provide a definitive answer on whether the insurance plan outlined above meets the definition of a PHSP; however, it notes that the Canada Revenue Agency generally views medical and hospital insurance plans offered by Blue Cross as PHSPs. The Directorate leaves the question of whether “all or substantially all” the expenses in this scenario are covered to the insurer’s discretion, but it offers some insight into the Directorate’s tendencies in these scenarios.
Ontario WSIB issues policy on medical cannabis
Policy 17-01-10 Cannabis for Medical Purposes, recently issued by the Ontario Workplace Safety and Insurance Board (WSIB), provides a framework for entitlement to and approval of medical cannabis by the WSIB in Ontario. Until now, the WSIB has been handling medical cannabis coverage on a case-by-case basis.
The policy, which comes into effect on March 1, 2019, sets out the following five conditions for entitlement to medical cannabis:
- Neuropathic pain;
- Spasticity resulting from a spinal cord injury;
- Chemotherapy-induced nausea and vomiting;
- Loss of appetite associated with HIV or AIDS; and
- Pain and other symptoms in palliative
In addition to these conditions, several factors must be met before the WSIB will consider entitlement to medical cannabis, including the following:
- Worker has previously tried conventional treatments for his/her condition;
- Worker has received a clinical assessment for medical cannabis treatment;
- Benefits of medical cannabis treatment outweigh the risks; and
- Treating healthcare professional has authorized medical cannabis for the
The WSIB has committed to reviewing the policy within two years and adapting it to any significant changes in the clinical cannabis environment.
Impact: This policy may lead to more claimants being approved for medical cannabis coverage under the WSIB. The impact on each employer will depend on its claims experience and rate group, as well as whether it is a Schedule 1 employer (which operates under the WSIB’s collective liability insurance principles) or a Schedule 2 employer (which is individually responsible for the full cost of accident claims filed by its workers).
Nova Scotia increases dental services tariffs
Based on recommendations to the Minister of Health and Wellness in November, the Nova Scotia government filed NS Reg 9/2019 on January 23, 2019, which repeals regulations governing the Insured Dental Services Tariff Regulations made pursuant to the Health Services and Insurance Act.
The new regulations replace NS Reg 62/2013, increasing tariff amounts and payments for several dental services, including:
- Children’s oral health programs;
- Oral and maxillofacial surgery programs;
- Cleft palate/craniofacial programs;
- Maxillofacial prosthodontics programs; and
- Oral health programs for individuals with special
Impact: The increase in tariffs affects a number of specialty oral health programs, many of which are covered only as insurance of last resort. Under these programs, no amounts are payable for services rendered to a resident to whom a benefit has been paid, or would be payable, if they were claimed under an insurance plan. If a partial benefit is paid by private insurance for a service under these programs, the remaining costs are billable directly to the province.
CMHA calls for greater mental health care support in Canada
The Canadian Mental Health Association (CMHA) policy paper on mental health care recommends equal treatment and funding for mental health as for physical health. The 2018 paper, Mental Health in the Balance: Ending the Health Care Disparity in Canada, calls on the Government of Canada to introduce legislation to address mental health care and bring it into balance with physical health care in the country.
According to a recent survey by the Canadian Mental Health Association, 85% of Canadians reported mental health services in Canada are among the most underfunded services in the healthcare system, and 86% agree funding for mental health should be at the same level as funding for physical health. Every year, one in 5 Canadians struggles with mental health issues. By age 40, about half the population will have (or have experienced) mental illness.
In addition to increased funding, the CMHA paper calls for improved coordination, treatment, research and access to mental health care support, as well as better decision-making on effectively spending healthcare dollars. It recommends that new legislation address the following five areas:
- Publicly funded evidence-based healthcare provided by addiction counselors, psychologists, social workers and specialized peer support workers;
- Improved quality of care through a continuum of integrated services;
- Investment in promotion, prevention and early intervention;
- Focus on stigma and discrimination; and
- Equitable access and allocation of more funding to research on mental illness.
Impact: According to the 2018 Sanofi Canada Healthcare Survey of plan members, mental health is one of the top five chronic conditions impacting Canadians. Among those dealing with mental illness, 72% indicate their work is negatively affected by their condition. The potential cost of mental illness in the workplace could be significant for plan sponsors, as it stems from various sources – including indirect costs of absenteeism and lost productivity, as well as direct benefits plan costs
(e.g., increased use of psychology, counselling and therapy services).
This publication has been prepared by the GroupNews editorial board for general information and does not constitute professional advice. The information contained herein is based on currently available sources and analysis. The data used may be from third-party sources which Eckler has not independently verified, validated, or audited. They make no representations or warranties with respect to the accuracy of the information, nor whether it is suitable for the purposes to which it is put by users. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such. Current editorial board members are: Andrew Tsoi-A-Sue, Ellen Whelan, Charlene Milton,
Alyssa Hodder, Philippe Laplante, and Nick Gubbay.