GroupNews – January 2019
Eckler’s GroupNews monthly newsletter provides commentary on the issues affecting Canadian group benefit plans.
In this edition:
The Ontario government is moving ahead with the previously announced changes to the Children and Youth Pharmacare program (OHIP+), which came into effect on January 1, 2018.
On January 2, 2019, Ontario released a proposed amendment to the Ontario Regulation 201/06 made under the Ontario Drug Benefit Act. If approved, the proposed changes to Ontario Regulation 201/96 will impact the OHIP+ program in the following ways, beginning March 2019:
Children and youth with private insurance plan coverage: The OHIP+ program will become second payor for children and youth who are covered by a private insurance plan.
Individuals or families with high drug costs, despite having private insurance coverage, are still eligible to receive financial support through the Trillium Drug Program. Coverage will be provided where drug costs meet the Trillium Drug Program deductible, subject to a maximum $2 co-payment per prescription.
Children and youth who do not have existing prescription drug benefits coverage under a private plan: Will continue to receive coverage through OHIP+. Those who are eligible for the Ontario Drug Benefit Program through social assistance, are recipients of home care, and are residents of homes for special care or a community home for opportunity will have no co-payments or deductibles.
Impact: As previously noted, plan sponsors will not see the anticipated drug cost savings from OHIP+ (which were estimated to range from 3% to 7%). A second look at budgets for 2019 onward and removing the estimated impact of OHIP+ may be appropriate, given the change in regulations.
Please see the previous edition of GroupNews for additional background.
|Year’s maximum pensionable earnings||$55,900||$57,400|
|Employer contribution rate||4.95%||5.1%|
|• Maximum employer contribution||$2,593.80||$2,748.90|
|Employee contribution rate||4.95%||5.1%|
|• Maximum employee contribution||$2,593.80||$2,748.90|
|Maximum monthly retirement benefit (at age 65) 1||$1,134.17||$1,154.58|
|Maximum monthly post-retirement benefit (at age 65)||$28.35||$28.86|
|Maximum monthly disability benefit||$1,335.83||$1,362.30|
|• Flat rate component||$485.20||$496.36|
|Death benefit (lump sum)||$2,500||$2,500|
|• Monthly survivor’s benefit: spouse under age 65||$614.62||$626.63|
|• Monthly survivor’s benefit: spouse age 65 and over||$680.50||$692.75|
|• Survivor’s benefit: flat rate component (spouse under age 65)||$189.31||$193.66|
|Maximum monthly benefit for child of a disabled/deceased contributor||$244.64||$250.27|
Impact: Employers will need to update their payroll and HR systems to reflect the new limits. Note that the basic exemption remains unchanged from 2018.
1 Excluding amounts from CPP enhancement starting in 2019.
British Columbia Supreme Court rules on provisions of Medicare Protection Act
A decision in the B.C. Supreme Court has ruled that the provincial government cannot enforce certain provisions of the Medicare Protection Act until their validity is established at an ongoing trial.
Cambie Surgeries Corporation v. British Columbia (Attorney General), 2018 BCSC2084, is an ongoing constitutional challenge to the Medicare Protection Act’s (MPA) constraints on private health care. The plaintiffs claim that the MPA limits on privately charging patients infringe patients’ rights under the Canadian Charter of Rights and Freedoms. They claim that rights are infringed when patients are prevented from obtaining some medically necessary services more quickly at a private clinic than waiting for the public system. The plaintiffs also note that physicians currently enrolled in British Columbia’s Medical Services Plan (MSP) are prohibited from charging patients a fee for the provision of private medical services.
The latest injunction will prevent BC’s Medical Services Commission from enforcing sections of the MPA that came into force October 1, 2018. The aim is to protect patients from extra billing for medically necessary treatments. The Court concluded that the injunction was necessary to ensure that patients would not “suffer serious physical and/or psychological harm while waiting for health services,” among other reasons.
Impact: In the short term, this is not expected to have much, if any, direct impact on plan sponsors. However, depending on the outcome, the ongoing constitutional challenge by Cambie Surgeries Corporation is one that could have a significant impact on the longer-term delivery of publicly-funded and privately-funded health care. GroupNews will continue to provide updates on this issue.
Update on changes to employment leaves in Canadian jurisdictions
On October 29, 2018, the federal government introduced Bill 86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures (Bill 86). Bill 86 amends the Employment Insurance Act to increase the maximum number of weeks for which parental benefits may be paid, if the benefits are divided between claimants from 35 to 40 weeks or from 61 to 69 weeks.
Bill 86 also amends the Canada Labour Code to provide for the following:
- five days of paid leave for victims of family violence;
- a personal leave of five days, with three paid days for concerns such as healthcare issues for family members, personal illness or injury, responsibilities related to the education of family members aged 18 or younger, and other urgent matters concerning family members;
- an unpaid leave for court or jury duty with no set limits; and
- a fourth week of annual vacation with pay for employees who have completed at least 10 consecutive years of
These changes to the Canada Labour Code affect federally regulated employers only. Bill 86 received Royal Assent on December 13, 2018.
Newfoundland & Labrador
On December 5, 2018, Bill 32, An Act to Amend the Labour Standards Act, (Bill 32) received Royal Assent in the Legislative Assembly of Newfoundland & Labrador. Bill 32 amends the Labour Standards Act to establish a leave for family violence that would provide for three days of paid leave and seven days of unpaid leave in a year, where the employee or a child of the employee has been directly or indirectly subject to, a victim of, or seriously affected by family violence.
The Royal Gazette of Nova Scotia on December 21, 2018 published three regulations related to the Labour Standards Code:
- S. Reg. 208/2018 reduces the eligibility period for pregnancy and parental leaves, reducing the minimum period an employee must be employed to be entitled to pregnancy or parental leave to one day, effective January 1, 2019.
- S. Reg. 209/2018 proclaims that amendments related to An Act to Amend Chapter 246 of the Revised Statutes, 1989, the Labour Standards Code, Respecting Leaves of Absence, is enacted as of
January 1, 2019.
- N. S. Reg. 210/2018 proclaims that amendments related to paid leave for victims of domestic violence are effective January 1, 2019.
Prince Edward Island
The Government of PEI gave Royal Assent to Bill No. 32, An Act to Amend the Employment Standards Act (No. 4) (Bill 32) on December 5, 2018. Bill 32 amends several sections of the Employment Standards Act, including:
- increasing the period of maternity leave from 11 to 13 weeks;
- increasing the period of unpaid parental leave from 35 to 62 weeks, and the leave related to adoption from 52 to 62 weeks;
- reducing the waiting period for sick leave from a continuous period of employment lasting six months or more to a continuous period of employment lasting at least three months; and
- increasing the maximum period of an unpaid leave of absence for the purpose of providing compassionate care and support to a family member from 8 weeks to 28 weeks.
Manitoba has introduced The Employment Standards Code Amendment Act (2) (Act), extending parental leave from 37 to 63 weeks. The Act also provides for a new 17-week leave for employees to take care of adult family members who are critically ill. Sections of the Act were proclaimed into force on
November 26, 2018.
Saskatchewan Bill No. 153, An Act to amend The Saskatchewan Employment Act respecting Leaves, (Bill 153) was introduced in November, 2018. Bill 153 amends the Employment Act regarding leaves as follows:
- increasing maternity and adoption leave from 18 to 19 weeks;
- extending parental leave from 34 to 59 weeks for the mother of a child, and from 37 to 63 weeks for another parent of the child;
- providing 17 weeks leave for employees to care for critically ill adult family members; and
- extending the current 10 days of interpersonal violence leave to include survivors of all forms of sexual violence, and allowing the leave to be used to seek medical or legal help, access support services, or relocate to a safe space.
Impact: As Canadian jurisdictions continue to enhance leave provisions to reflect the needs of Canadians, it is imperative that plan sponsors review their HR policies and benefit programs to ensure that they remain compliant with legislative requirements.
Update on healthcare spending in Canada
The Canadian Institute for Health Information has released new data providing an in-depth view of health expenditure trends in Canada, including annual spending on drugs, hospitals and physician services. Below are highlights of the 22nd annual report on National Health Expenditure Trends, 1975-2018, released in November 2018. The data represents anticipated spending to the end of 2018.
- At the end of 2018, total health expenditure was expected to reach $253.5 billion. This is a 4.2% increase from 2017, which saw over $243 billion in health expenditures. This represents 11.3% of Canada’s gross domestic product in the trend over the last several decades has found healthcare spending increases during periods of economic growth.
- Total healthcare spending is $6,839 per person for the Healthcare spending per capita has increased on average of 1.7% per year since 2014, while it decreased by an average of 0.2% per year between 2010 and 2014. The amount spent on health care varies by province, ranging from a high of $7,552 in Alberta to a low of $6,584 in Ontario. Per capital spending is highest for seniors and infants.
- Spending on hospitals (28.3%), drugs (15.7%) and physicians (15.1%) continue to represent the largest share of spending on healthcare in Drug spending is projected to be $1,074 per person, an increase of 3.2% in 2018, outpacing that spent on hospitals (3%) and physicians (2.2%) for the year.
- The share of healthcare costs paid by the public sector has remained relatively stable at approximately 70% since 1997. In 2018, private sector spending accounted for 31% of total health expenditures. This includes 15.4% on out-of-pocket spending, 12.4% on private health insurance and 3.3% on non-consumption. Out-of-pocket expenditure increased to $972 per person in 2016 from $278 in 1988, representing a 4.6% annual increase, while private health insurance expenditure increased to $788 from $139 per person over the same period.
- In 2017, people with high drug costs ($10,000 or more) represented only 3% of beneficiaries but accounted for over one-third (36. 6%) of public drug spending. In 2016, 2.2% of individuals for whom a drug program paid $10,000 or more accounted for 35.4% of spending.
- Among the Organization of Economic Cooperation and Development (OECD) countries, spending per person on health care was highest in the United States in 2017, the latest year for which data is available from the OECD at $12,865 CAD. Canada was well above the OECD average spending $5,055 per person in 2017
Impact: Healthcare spending continues to increase, with drug spending and spending on high-cost drugs for smaller numbers of individuals showing a marked increase in comparison to other areas. Plan administrators and employers would be wise to review their current policies to ensure that their health benefit offerings in general and benefits related to drug spending in particular reflect the changing needs of their employees in the future.
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.