Effective January 1, 2018, the Ontario government will provide “free” drug coverage for everyone under the age of 24. The plan is similar to the Ontario Drug Benefit (OBD) which is available for seniors.
What does this really mean:
· Children under 24 will now have coverage through the OHIP+ program for most prescribed drugs
· No application is required, just give the child’s health card to the pharmacist along with the prescription
· If your employer’s benefits only covered a portion of the drug or dispensing fee cost, you may receive more coverage under this program
· You will still need to keep insurance information up to date with your pharmacist
· OHIP+ is the first payor for these drugs
o Drug claims should decrease slightly
o Most of the drugs that would be prescribed to this group are covered by the province
o Drugs not covered by the ODB (which include most high cost drugs currently being claimed on employer plans) will continue to be claimed under the company plan
· Employees may have questions
o If employees do not provide the child’s health card, your insurance carrier’s systems should reject the claim. Employees may interpret this as an issue with their coverage.
o The ODB list covers many, but not all drugs. You may get questions about why some are covered and others aren’t, especially if your plan has a deductible or co-pay
· Should you ask your insurance company for a rate adjustment?
o Especially for groups with lower than average drug claims and higher than average family sizes, claims that will now be shifted to the ODB could make up a significant percentage of overall drug claims
o The impact to the average group will be minimal as many of these drugs are inexpensive and are claimed with a low frequency
o Since most high cost drugs are not included, this change will have no impact on your Large Claim Pooling rates. If these are a concern for you, ask how HCG can help.
Overall, the financial impact of this change to employers is minimal, but could be significant under certain circumstances. Communicating this change to your employees will help them understand and navigate the new system and ensure that they continue to see the company’s Drug plan as a value added benefit.
Principal - HCG