The incoming Canadian Health Act Services Policy could limit benefits plan sponsors’ ability to offer virtual health care, according to experts.

The policy, which will come into effect on April 1, 2026, aims to ensure that medically-necessary services are covered by provincial or territorial health-care plans. It establishes criteria and conditions that provinces and territories must meet to receive full federal cash contributions from the federal government.

Read: Pharmacare, access to virtual health care among priorities for Benefits Alliance in 2025

In recent years, there has been a significant increase in the number of Canadians accessing health services through virtual care companies, which provide medically necessary services to Canadians for a fee, according to a statement by consultancy Segal.

In 2023, then Health Minister Jean-Yves Duclos indicated the government could claw back health transfer payments to provinces that allow patients to be charged for medically-necessary care, potentially prohibiting employer-sponsored benefits plans from covering virtual health care.

In a January statement, Health Minister Mark Holland said the national policy confirms that if a service is considered medically necessary, it should be covered by a patient’s provincial or territorial health-care plan whether the service is provided by a physician or a physician-equivalent.

Read: CLHIA focusing on continued support for virtual health care, innovation in 2025

However, the policy raises the question of whether the virtual health care offered by employer-sponsored benefits plans is considered medically necessary. According to Ezaque Lopes, head of strategic partnership at Arthur J. Gallagher & Co., “somebody who accesses telemedicine has an immediate medical need. Simply put, it is medically necessary.”

Todd Stephen, vice-president of employee benefits and pensions at Selectpath Benefits & Financial and past chair of the Benefits Alliance, agrees, citing services such as renewing a prescription or seeking advice on a medical issue as examples. However, some services may be considered preventative, he adds.

As for the out-of-pocket charges that patients pay to virtual health-care providers, plan members wouldn’t be considered patients because they pay into an employer-sponsored benefits plan.

“The plan member is not paying for an employer-sponsored program — the employer is,” he says. “A plan member only becomes a ‘patient’ if they access the service.

Read: 34% of plan members used virtual health-care services in the last year: survey

“Our position is very much that the employer-sponsored model is not asking Canadians to pay for access to health care. It’s something the employer is doing in order to accomplish a number of things, from increasing the productivity of their workforce to addressing competitive pressures to allowing employees to be much more efficient with their time. That’s where we think there’s a distinction.”

However, if the policy was interpreted to the letter by provincial and territorial governments, it could mean millions of Canadians currently using these services through employer-sponsored plans (at no out-of-pocket cost) would have to find alternative access to virtual health services.

“If this is upheld and enforced, there are going to be some interesting collateral impacts — not only to access to care, but also to these health-care professionals and how they prefer to offer their services,” says Stephen.

“I don’t know how realistic it is once people have had access [to virtual health care] and have clearly shown a preference for that type of access and service to the point where it’s now been embedded and being paid for by their employers. I don’t think you can put the genie back in the bottle.”

Read: Ross Video supporting employee mental health with virtual health-care platform