The OHIP+ program, which has offered free prescription medication to all Ontarians under the age of 25 since January 1, 2018, will undergo changes this year courtesy of the current Conservative government.
Although the OHIP+ “rollback” was announced back in June 2018, the details of these changes and their timing were uncertain until recently. We now know that beginning April 1, 2019, those under the age of 25 who are covered under a private insurance plan will no longer receive free prescription drugs under OHIP+. The Conservative government expects that these changes will save the province an estimated $250 million a year. For employers, Advisors and insurance providers, there may be other impacts to consider.
These new changes will specifically affect those under the age of 25 who have benefits through an employer or a family member’s plan that provides them coverage. Logically, those who provide this private coverage can also expect to be affected.
How will OHIP+ changes affect employers?
Some of your clients may have received a discount from insurance carriers when the initial OHIP+ program was rolled out. Now, as they approach the renewal process, they may see a corresponding increase in the cost of premiums as a result of the new changes to OHIP+. That’s because there’s now a greater likelihood that through the claims of children under 25, some employees will increase prescription drug claims and even potentially max out their coverage – for instance if their child requires routine medication for a chronic illness or condition that he/she may be dealing with.
As we know, this of course does not mean that employers will opt out of providing employee benefits. For many, the introduction of the OHIP+ program was viewed as an unexpected (but welcome) windfall. These changes will simply return employers to their previous status quo. However, Advisors should be prepared to help their clients continue to manage costs and ensure that their benefits plan continues to be sustainable.
Here are some options to help small business employers save on their group plans:
- Benecaid’s FlexStyle is a solution that offers employers more control over costs while still allowing them to offer the same valuable benefits as they were before. It’s an industry leading Administrative Services Only (ASO) plan specifically designed for small to medium sized businesses.
- A Health Spending Account (HSA) is a way employers can offer uninsured coverage for their workforce. The fixed amount of funds that a health savings account provides can be a more manageable, cost-effective solution. Employees can use all or a portion of their HSA funds towards prescription drugs, without employers experiencing an increase in rates at renewal time.
- Employers who like the HSA solution will especially appreciate our digital employee benefits platform, Honeybee. Honeybee offers the same concept as an HSA through a Health Account, plus includes an Allowance Account, which offers employees lifestyle benefits. A Health Account can also work in conjunction with insured health and dental plans. Employees can also easily see their coverage information and make claims through the Honeybee app – so their benefits are accessible to them at any time, anywhere.
Offering employees additional financial support
Don’t forget to let your clients know about the benefits of the Trillium Drug Program (TDP). Employees who have significant out-of-pocket costs, despite having private insurance, could apply for additional financial support through the TDP. That means that those who spend a large portion of their income on prescription drugs can use the TDP in conjunction with their employee benefits plan to help cover the costs.
As always, Benecaid is committed to communicating with Advisors about any changes that will impact renewals. We’ll reach out to you directly should any of your clients expect to be significantly impacted by these changes.
We’re always happy to work with Advisors to offer their clients better solutions to save money while offering the best plans for their workforce. Please contact your Executive Benefits Consultant to discuss further. Not a Benecaid Advisor yet? Email us at firstname.lastname@example.org.