Legislation in 2005
A recap of what happened and its impact on group benefit plans
Federal and provincial legislation can have a considerable impact on group benefit plans. Many developments took place in 2005.
Here’s a recap of some of the significant legislation that affected group benefit plans.
Privacy
Privacy continued to make headlines in 2005. The Personal Information Protection Electronic Documents Act (PIPEDA), and similar legislation in British Columbia, Alberta and Quebec, kept provincial and federal privacy commissioners’ offices busy releasing several decisions of interest.Key decisions made by the Federal Privacy Commissioner in 2005 included the following, which can be found in their entirety at
Complaint about access to information, accuracy and disclosure
In PIPEDA case summary #293, an individual complained that an insurance company denied him access to some of his personal information, including correspondence and voice mail records; refused to amend its files with respect to his salary information; and disclosed his personal information to his employer without his consent.In reviewing the case, the Privacy Commissioner found that the individual’s complaints weren’t justified. All relevant files had been disclosed to the individual and the insurer hadn’t retained voice mail records. The commissioner also found that the individual hadn’t proven that the insurer’s records were inaccurate, and had given consent to release / some of his personal information to his employer.
Sun Life Financial has implemented access to information processes to ensure that individuals will receive all information they are entitled to if they make a request. As per PIPEDA and the provincial privacy legislation, we will also amend our files if they are proven to be inaccurate. Plan sponsors should note that any information you send us about a plan member becomes part of their file and may be released to members if they request access.
Physician refuses to provide access to individual's personal information
Insurers often ask physicians to conduct an independent medical examination (IME) in relation to disability cases. In PIPEDA case summary #306, a plan member complained that the physician who conducted his IME refused to provide a copy of the notes taken during the visit. The physician felt he had a right to withhold this information based on solicitor-client privilege, and the fact that the information was gathered during the course of a formal dispute-resolution process.The Privacy Commissioner ruled that the IME didn’t take place in the context of a litigious situation and
that the plan member’s personal information was
gathered in order to determine eligibility for group
coverage, not for resolving a dispute.
Our process is to disclose medical details to plan members through the physician of his or her choice.
Activities recorded and videotaped by a private investigator hired by an insurance company
A woman complained to the Privacy Commissioner that an insurance company used a private investigator to monitor her activities without her consent. This followed a claim she made against another driver as a result of a motor vehicle accident. The insurance company representing the other driver felt it had consent as a result of the woman filing the claim. PIPEDA case summary #311 indicated that when an individual initiates a lawsuit, there is implied consent that the other party may collect information required to defend itself.At Sun Life Financial, we obtain consent from members to investigate claims. We’ll continue to align our privacy practices with recommendations from relevant Privacy Commissioner decisions, and monitor guidelines set out by the commissioner in 2006.
Alberta’s Third Way
In 2005, the government of Alberta released plans for a series of health policy and regulatory changes known as the “Third Way”. The Third Way approach promises Albertans more health care options in areas such as access to care, continuing care, wellness, mental health, and pharmaceuticals.More information about Third Way initiatives can be found on the Alberta government’s website at
or in Focus Update # 84 (September 2005) at FocusUpdate05.
Semi-private/private hospital coverage
Effective September 1, 2005, Alberta passedlegislation related to a Third Way initiative allowing
the province’s Region Health Authorities (RHA) to
set their own rates for semi-private and private / hospital rooms. At this point, no RHA has changed its current rates. We’ll continue to watch this for developments throughout 2006. For more details, refer to Focus Update # 83 (September 2005) at FocusUpdate05.
Health Care Assurance Act
The Alberta government announced last year that in 2006 it would propose a new Health Care Assurance Act. This would consolidate existing legislation and clearly define what services will be provided publicly, and which ones can be covered by private insurance plans. Although draft legislation has yet to be made public, we expect that group benefit plans will be allowed to cover more products and services than in the past.Although the Third Way received considerable media attention in the summer and fall of 2005, we haven’t seen much progress on the health care action items the government promised. We expect to hear more about these initiatives now that the federal election is over. We’ll continue to share any Third Way developments with you as they become available.
Ontario eliminates mandatory retirement
Over the past 18 months, we’ve kept you up-to-date on the Ontario government’s plans to eliminate mandatory retirement. The key milestones thus far have been:
- In the summer of 2004, the government announces its intention to eliminate mandatory retirement (FYI Issue 2 in fyi04).
- In August 2004, the government confirmed its intention with the release of its consultation paper, Providing Choice: A Consultation Paper On Ending Mandatory Retirement, which solicited the public’s input on how to end mandatory retirement in a fair and balanced way (Focus Update # 46 in Focus04).
- On June 7, 2005, the government tabled legislation to eliminate mandatory retirement in
FocusUpdate05).
- On December 8, 2005, Ontario’s Bill 211, which will eliminate mandatory retirement in the province, passed third reading. It received royal assent December 12, 2005 and will come into force on December 12, 2006.
Working with the Canadian Life and Health Insurance Association (CLHIA), we presented ASO plan sponsor concerns to the Ministry of Labour to ensure they fully understood the implications of the legislation on group benefit plans.
Recent developmentsFollowing a CLHIA submission to the standing committee on justice policy – which reviewed the legislation prior to its third reading – and subsequent discussions with the Ministry of Labour, Bill 211 has been amended to make clear that the status quo continues with respect to both insured and ASO plans:
- the new 25(2.1) of the Code deals only with 'age', and no longer contains a reference to contracts "between an insurer and an employer";
- the new 25(2.2) of the Code specifically states that "Subsection (2.1) applies whether or not a plan or fund is the subject of a contract of insurance between an insurer and an employer”.
OHIP physiotherapy coverage changes
As per the 2004 Ontario Budget, the Ontario HealthInsurance Plan (OHIP) delisted some previously
covered optometry, chiropractic and physiotherapy / services. While the optometry and chiropractic changes took effect in 2004, the physiotherapy changes took effect April 1, 2005. OHIP now only covers physiotherapy services for people who:
- are 65 years of age or older or under 19years of age, to a maximum of 100 visits per year
- reside in long-term care homes (at any age)
- require physiotherapy services in their home or after being hospitalized to a maximum of 50 visits per year (at any age)
- receive the Ontario Disability Support Program, Family Benefits or Ontario Works (at any age)
Chaoulli decision in Quebec
In 1999, a Quebec resident on a waiting list for health services felt that his charter rights were compromised because his treatment could not be covered under private insurance. In a controversial decision, the Supreme Court of Canada ruled in his favour. This ruling is expected to have a huge impact on the delivery of health care services in Canada.
The court granted the Quebec government a stay to June 2006 to ensure they have sufficient time to deal with the implications of the decision. At the end of February 2006, the government released a consultation paper in which it proposed timely care guarantees. These include:
- Recently established benchmark waiting times for cancer and cardiac care. The public system will ensure treatment within these times.
- Timelines for elective surgeries, which will be defined by the Health ministry but will definitely include hip and knee replacement and cataract surgery.
- After a six-month wait for an elective surgery, the patient will have access – at public expense – to care at public facilities
elsewhere in Quebec or in a special clinic under contract to the province’s public system.
- After nine months, the patient will have access – at public expense – to private clinics in Quebec or treatment facilities elsewhere in Canada or in another country.
- Permission of private health insurance for a range of services, which will be defined according to government regulations but will definitely include hip and knee replacement and cataract surgery. The government proposes that these privately insured services are delivered at private facilities and performed by physicians who have opted out of the public system.
Quebec’s basic drug plan
Quebec announced some changes to the parameters of the basic drug plan administered by the Régie de l’assurance maladie du Québec (RAMQ). Effective July 1, 2005, the RAMQ monthly deductible (paid at the pharmacy) increased to $11.90 from $10.25. While this change didn’t affect plan deductibles, if your plan supplements RAMQ coverage for plan members age 65 and older, we expected a slight increase in claims costs for these members due to RAMQ’s deductible increase of $1.65.Despite the change to the monthly deductible, RAMQ’s out-of-office maximum remained at $857, and coinsurance remained at 71.5%.
For more details refer to Focus Update #82 (September 2005) at FocusUpdate05. /
Smoking cessation drugs in Quebec
On January 1, 2005, the Quebec Drug Insurance Plan, Regie de l’assurance-maladie du Quebec (RAMQ), increased the amount covered by their general plan for smoking cessation drugs to $630 from $620.Quebec legislation requires that all private drug plans have provisions at least equivalent to those under RAMQ. We therefore increased our Quebec smoking cessation drug maximum accordingly. For more details see Focus Update # 55 (November 2004) at Focus04.
Same-sex legislation/definition of spouse
Ontario passed legislation extending the definition of spouse and marriage to include same-sex couples. For more information go to Attorney General or refer to Focus Update # 69 (April 2005) at FocusUpdate05.Federal budget 2005
Finance Minister Ralph Goodale delivered a budget
that included improved programs/funding for
low-income Canadians, the military, daycare and the environment. Overall, the budget’s focus was on secure social foundations, a sustainable environment, and a sound fiscal framework.
Here are some key items from the budget. You can also refer to Focus Update # 65 (February 2005) at FocusUpdate05.
Canada Pension Plan (CPP) triennial reviewThe Government announced it would review the Canada Pension Plan (CPP), citing significant changes in Canadians’ work and retirement patterns since the inception of CPP and the Quebec Pension Plan (QPP) in 1966. Notably, seniors are healthier, living longer and more productive lives, and taking varied paths to retirement.
Because CPP and QPP are closely integrated with our disability plans, we have been monitoring this issue. No dates have been set for an update on this issue.
Individuals with disabilities
The Federal budget proposed to adopt the recommendations of the technical advisory committee on tax measures for persons with disabilities. One recommendation was to expand the list of expenses eligible for the ‘disability supports’ deduction to include various services and devices for individuals who are visually or hearing impaired, have a severe learning disability or speech impairment, or have some other severe and prolonged impairment that markedly restricts their ability to use their arms or hands.These disability supports expenses were to be added to the list of expenses eligible for the Medical Expense Tax Credit (METC), and would therefore be eligible for coverage under Health Spending Accounts. These changes haven’t been implemented, however, since a bill has yet to be proposed to parliament.
The technical advisory committee’s report, including its recommendations, can be viewed at
Medical Expense Tax Credit (METC)
The budget also proposed to include the following as eligible METC expenses:- The cost to purchase, operate and maintain phototherapy equipment prescribed for the treatment of psoriasis or other skin disorders.
- Drugs purchased under Health Canada’s Special Access Programme. Currently these are available on the recommendation of a physician but ineligible for the METC.
- The cost to operate an oxygen concentrator, including electricity costs. (The cost to purchase an oxygen concentrator is currently covered).
draft stage and haven’t been introduced to
parliament in the form of a bill. We will continue to / watch for developments and notify you in the event these items are added to the METC.
Health care and equalization funding
The budget increased federal cash transfers to provinces and territories in support of health care by six per cent annually, reaching $30.5 billion in 2013-14. Of this, $500 million will be provided through the transfer payments in 2005–06 to help progress on home care services and catastrophic drug coverage.A ministerial task force was slated to develop and implement a national pharmaceutical strategy. Though additional information about this strategy wasn’t available by the end of 2005, we are continuing to watch this topic closely as it could have an impact on group benefits plans.
Alberta dental and optical coverage improvements
Effective April 1, 2005, the Alberta government improved basic dental and optical coverage for low- income seniors registered in the Alberta Seniors Benefit Program. For retirees with private dentaland optical coverage, the Alberta government is considered first payor if the retiree is over age 65 and meets the established income requirement.
Given the few Sun Life Financial group benefit plans affected by this change, we didn’t issue a Focus Update on this topic. Plan sponsors can direct questions about this issue to their group benefits representative, or visit the Alberta Seniors Benefit Program website at
Alberta chiropractic and podiatry changes
Chiropractic and podiatry coverage changes the Alberta government introduced July 1, 2005, allow group benefit plans to reimburse plan members for incurred expenses from the date initial services are
provided. Prior to July 1, 2005, the Alberta Health Care Insurance Plan (AHCIP) paid a per visit maximum of $13.23 for chiropractic services up to
an annual maximum of $200, and up to an annual
maximum of $250 for podiatry services (per-visit
maximums can vary depending on the services provided), before plan members could submit out-of-pocket expenses to the group plan for reimbursement.
We gave plan sponsors two coverage options: to provide coverage after AHCIP maximums are reached (status quo before July 1 changes), or reimburse members from first visit, resulting in a premium increase.
Focus Update #76 (July 2005) at FocusUpdate05 provides more details about these changes and the impact on group benefit plans.
For more legislative news
More information on the issues discussed above and other legislation-related news can be found in Focus on legislation in 2005 in the Focus Update archives at FocusUpdate05.
Update # 93 – March 2006