Private Insurance Drug Pooling Initiative
Many highly expensive drugs have been introduced in recent years. To mitigate these costs increases, some employers have elected to restrict drug coverage for their plan members, which diminishes the value of the benefits program and severely affects those individuals who rely on such drugs.
Industrial Alliance has confirmed its participation in the catastrophic drug pooling program that was developed by members of the Canadian Life and Health Insurance Association (CLHIA). The program will be managed by a not-for-profit corporation and will be effective January 1, 2013.
This initiative represents a commitment from Canadian insurers to share the costs of highly expensive and recurring drug treatments through an industry drug pooling agreement. It will ensure continued financial access to drugs that Canadians need, and will help ensure the sustainability of employer-sponsored drug plans.
All plans that are funded on a fully insured, non-refund basis will participate in this program (plans that are insured on a refund accounting basis and uninsured, administrative services only (ASO) plans are excluded from participation).
Some of the important conditions that must be satisfied by participating insurers are noted below:
- Insurers must respect a common set of operating standards and set up internal pools known as Extended Health Policy Protection Plans (EP3)
- EP3 rules apply to the drug portion only, and do not include non-drug health benefits
- The industry will establish 3 different pools to cover:
- Residents of British Columbia, Saskatchewan, and Manitoba
- Residents of Quebec for costs not covered under the Quebec Drug Insurance Pooling Corporation
- Residents of Alberta, Ontario, Nova Scotia, New Brunswick, P.E.I., Newfoundland and Labrador, Yukon, N.W.T., and Nunavut
- Insurers cannot experience rate based on the number or value of pooled drug claims for a particular plan sponsor
This program will ensure that plan sponsors continue to have access to sustainable drug plans and allow even if they have encountered significant recurring drug expenses.
With this initiative, employees will continue to receive coverage from their employers even in the face of high cost drug claims.
Further details pertaining to the Industrial Alliance pooling arrangements will be made available in the coming months.
In the meantime, please contact your Industrial Alliance group account executive if you have any questions about this important industry program.