However, while one-third of Canadian employers with post-retirement benefits plans expect to reduce benefits for future retirees, only 21% of Quebec employers intend to do so. This may reflect a general bias toward more paternalistic approaches to benefits coverage in Quebec compared with employers in other parts of the country. For those that maintain post-retirement benefits, the approach they plan to take to manage costs is consistent in Quebec and nationally: 43% of employers, whether based in Quebec or in any other part of Canada, are somewhat or very likely to increase contributions for future retirees.
Although it was a quiet year for benefits in Quebec from a legislative standpoint, one change to note is that the Regulation under the Act respecting insurance was amended to revise or clarify existing rules on conversion privileges for plan members who were Quebec residents at the time of enrollment, their family and their dependents. Members who were terminated from a group plan before age 65 have the option to convert all or part of their life insurance protection, or that of their family and dependents, into an individual life insurance contract.
There are a number of limitations, but there are two primary restrictions.
1. The amount of insurance that may be converted must be at least $10,000 and may not exceed the lesser of the amount of all of the life insurance protections
that the participant held under the contract on the conversion date and $400,000 (an increase from the previous threshold of $200,000).
2. The amount of life insurance that can be converted must be at least $5,000 for each family member and dependent without exceeding the amount of insurance on the life of those persons on the conversion date.
Managing drug costs
Alberta has revamped the generic drug pricing under its provincial plan, and Ontario recently announced its own set of drug reforms. Given this precedence, other parts of the country may follow suit. If Quebec also introduces measures to reduce generic drug costs that are advantageous to both public and private plans, employers will have an opportunity to consider changing plan design provisions, features or coverage to reduce cost and maximize value.
As long as mandatory generic drug substitution by pharmacists is not required in Quebec, it is more difficult for employers to influence employee purchasing behaviour through plan design. However, employers can still influence employees’ choices through more extensive education and communication around increasing plan costs—for example, by encouraging employees to consider asking for a generic equivalent when having a prescription filled.
One other feature that Quebec employers may want to reconsider is the deferred drug card, which is much more prevalent in this province than elsewhere in Canada. While employees can go to a pharmacy and have the claim pre-approved, they still have to pay for it and await reimbursement from the insurer. Approximately 25% of drug plans in Quebec are deferred arrangements versus around 1% for the rest of Canada.
Employers may want to review their plans and employee utilization to consider implementing a pay-direct drug card, which would answer a convenience need that most employees have expressed. Although there may be a small increase in drug costs in the first year of implementation, experience shows that plans with a pay-direct drug card do not experience higher utilization than plans without such a card—yet this feature is highly appreciated by employees.
The approach to group benefits coverage in Quebec will often be a little different from the rest of the country. However, the global economic events of the past year have placed additional emphasis on one objective that is common to employers in all provinces: containing growing costs while meeting employee needs. BC
Richard Coté is a benefits consultant with Hewitt Associates in Montreal.
richard.cote@hewitt.com
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© Copyright 2010 Rogers Publishing Ltd. This article first appeared in the May 2010 edition of BENEFITS CANADA magazine.
