Canada: Mandatory Prescription Drug Insurance

Québec has a mandatory basic prescription drug insurance plan for every eligible person who is a resident of the province. The basic plan covers the cost of pharmaceutical services required to fill or renew a prescription and of medications included on a list drawn up by the Minister of Health and Social Services, provided such prescription is dispensed in Québec.

Eligibility

Coverage under the basic plan is provided by the Régie de l'assurance maladie du Québec ("Québec Health Insurance Board"), or by the private sector where there exists either a group insurance contract or an employee benefit plan applicable to current or former employees, in accordance with the following criteria:

Québec residents under age 65

Current or former employees under age 65 who are not eligible to participate in an employer's group insurance program or benefit plan due to their employment status (e.g. part-time employees, contractual employees, retirees, etc.) and who are not insured under another drug insurance plan (e.g. their spouse's plan) must register with the Québec

Health Insurance Board and must also register their dependants3 if they are not covered by another drug insurance plan.

  • Current or former employees under age 65 who have not yet completed the waiting period to become eligible to participate in an employer's group insurance program or benefit plan and who are not insured under another drug insurance plan (e.g. their spouse's plan) must register with the Québec Health Insurance Board, together with their dependants (if they are not covered by another drug insurance plan) until they become eligible to participate in such group insurance program or benefit plan.
  • Current or former employees under age 65 who are eligible to participate in an employer's group insurance program or benefit plan and are not insured under another drug insurance plan (e.g. their spouse's plan) are required to join such group insurance program or benefit plan together with their dependants (unless the latter are covered by another drug insurance plan).
  • Current and former employees under age 65 who are covered under an employer's group insurance program or benefit plan, or under their spouse's plan, meet the legal requirements. They must, however, enrol their dependants if they are not already insured under another drug insurance plan.

Québec residents aged 65 years or over

  • Current and former employees aged 65 years or over who are not eligible to participate in an employer's group insurance program or benefit plan due to their employment status and who are not insured under another drug insurance plan are covered by the Québec Health Insurance Board, together with their dependants, if the latter are not beneficiaries under another drug insurance plan.
  • Current and former employees aged 65 years or over who are eligible to participate in an employer's group insurance program or benefit plan and who are not insured under another drug insurance plan have the choice, as regards the basic prescription drug insurance plan, to either participate in such group insurance program (or benefit plan) or be covered by the Québec Health Insurance Board, together with their dependants who are not beneficiaries under another drug insurance plan. The annual cost of belonging to the Québec Health Insurance Board varies between $0 and $660.00, depending on the annual income of the participant. This amount will be collected when the individual files his annual Québec income tax return. Generally speaking, experience has shown that the cost per participant in a group insurance program or benefit plan does increase significantly if eligible persons aged 65 years or over do not join the Québec Health Insurance Board plan. Since such increased costs are likely to result in additional premiums or assessments or taxable benefit in an amount far greater than the $660.00 (until June 30, 2017) associated with belonging to the Québec Health Insurance Board plan, it is therefore in the best interest of those individuals to maintain membership in the Québec Health Insurance Board plan.

Application of the basic plan in the private sector

Employers who offer group insurance protection or a benefit plan providing coverage for the cost of pharmaceutical services and medications in case of illness, accident or disability are required to provide at least the basic prescription drug coverage.

No one may, as regards the part of coverage corresponding to the basic plan, refuse to allow a person to become a member of a group insurance contract or employee benefit plan on the grounds of the specific risk associated with the age, sex or state of health of such person, of that person's spouse or child, or of another individual suffering from a functional impairment who is domiciled with that person. In summary, insurers or benefit plan administrators must, as regards the basic plan coverage, accept the membership of every eligible person under 65 years of age and of every eligible person 65 years of age or over who applies therefore, if not already covered under another drug insurance plan. Insurers or plan administrators must also provide coverage to such eligible person's dependants who are not covered under another drug insurance plan.

It is to be noted that for the purposes of the basic plan, no person may, with respect to group insurance or an employee benefit plan, determine a group on the basis of the age, sex or state of health of plan members. However, other criteria can be used as a basis for setting up distinct groups (e.g. non-unionized and unionized employees, active and retired employees, etc.).

Premium, deductible, coinsurance and maximum contribution

The premium pertaining to the basic plan coverage in a group insurance contract or employee benefit plan and any contribution required thereunder in the form of a deductible or coinsurance payment must be negotiated or agreed to by the interested parties. They may be different, depending on the type of coverage (e.g. single, single parent, couple, family) and category of eligible participants (e.g. retirees under age 65, retirees aged 65 years or over). However, the coinsurance percentage to be borne by an eligible person may not exceed 34.5% of the cost of pharmaceutical services and medications, nor may the maximum annual contribution (comprised of the aggregate of the coinsurance percentage/payment and deductible, but exclusive of the premium) exceed $1,046 per adult (including any amount paid by such adult as a deductible and coinsurance percentage/payment for a child or a person suffering from a functional impairment who is domiciled with that adult).4

This means that in the case of single coverage, a person is entitled to be covered for at least 75% of eligible expenses under the basic plan, provided that out-of pocket costs, combined with any deductible, do not exceed $1,046 in a calendar year. In the case of family coverage, each adult is entitled to be covered for at least 75% of eligible expenses under the basic plan, provided that out-of-pocket costs, combined with any deductible claimed, do not exceed $1,046 in a calendar year. Moreover, the parent paying for the family coverage may combine the eligible out-of-pocket expenses incurred for his children (and, if applicable, for a person suffering from a functional impairment) to satisfy the maximum annual contribution of $1,046.

Footnotes

3 Dependants include a spouse (legally married or at common law or have an adopted child), children under 18 years of age, or 25 years of age or under if they are full-time students and unmarried, and any unmarried member of the household with a functional deficiency who is aged 18 years or over. It is to be noted that a spouse aged 65 years or over may apply for coverage directly with the Québec Health Insurance Board.

4 The coinsurance percentage and annual maximal contribution are revised on the 1st of July of each year. The maximum annual contribution is from$0 or $660 for persons 65 years or older who receive a certain fraction of the monthly guaranteed income supplement under the Old Age Security Act (R.S.C. 1985, c. 0-9).

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