[vc_row content_width=”grid”][vc_column][vc_column_text]For insurers and administrators of employee benefit plans
Note : A first version of this information bulletin was published in November 2006. This version has been updated with new information.[/vc_column_text][/vc_column][/vc_row][vc_row content_width=”grid”][vc_column][vc_column_text]Ed. note: This bulletin does not have the force of law. It presents the point of view of the Quebec Drug Insurance Pooling Corporation on various subjects, based on the Act Respecting Prescription Drug Insurance.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_empty_space][/vc_column][/vc_row][vc_row content_width=”grid”][vc_column][vc_text_separator title=”Changes to the Act Respecting Prescription Drug Insurance made in December 2005 and their Impact on Risk Pooling”][/vc_column][/vc_row][vc_row content_width=”grid”][vc_column el_class=”pie”][vc_column_text css=”.vc_custom_1461628464830{border-bottom-width: 1px !important;padding-bottom: 20px !important;border-bottom-color: #e4e4e4 !important;border-bottom-style: solid !important;}”]
On December 13, 2005 Bill 130, the Act Respecting Prescription Drug Insurance and Modifying Various Legislative Provisions was passed. This bulletin discusses sections 15.1, 42.1 and 42.2 which have been in effect since August 30, 2006, and their impact on the process of pooling risks related to drug costs.
Insurers and administrators of employee benefit plans offering payment guarantees for the cost of medications to residents of Quebec are, naturally, obliged to comply with these sections.
This bulletin also sheds light on the changes made to sections 17 and 18, which affect drug insurance coverage for spouses and children.
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The impact of sections 15.1, 42.1 and 42.2 of the Act Respecting Prescription Drug Insurance (the Act), on the definition of groups eligible for private drug insurance coverage
The addition of sections 15.1, 42.1 and 42.2 to the Act clarifies the definition of groups eligible for private drug insurance coverage and the conditions for application of the guarantees. Individual insurance contracts based on the characteristics defining group insurance themselves, are covered by section 42.2.
These changes may have had an impact on the composition of groups served by certain insurers and administrators of employee benefit plans operating in Quebec, as well as on the individual insurance products that are offered.
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Section 15.1 of the Act offers a definition that restricts the nature of the groups of persons to which the private sector may offer the fundamental guarantees under the basic prescription drug insurance plan.
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“15.1. For the purposes of this Act, a ‘group with private coverage within the meaning of section 15.1’ ,means a group formed for purposes other than contracting insurance coverage for its members and composed of persons eligible for the basic plan who
1° are part of the group on the basis of current or former employment or belong to
trade or occupation, or
that offers coverage under a group insurance contract or employee benefit plan
or under an individual insurance contract concluded on the basis of one or more
of the distinctive characteristics of group insurance to, makes such coverage
available to or facilitates such coverage for its active members or retirees,
either directly or through a legal person; and
In a INFO assurance medicaments bulletin, the Régie de l’assurance maladie du Québec (RAMQ) explains the scope of section 15.1 of the Act, specifying that a group of persons must be determined based on current or former employment, profession, trade, occupation or membership in a union. Also according to the RAMQ bulletin, the group’s basis must be a common interest or objective of the members of the group, which justifies its existence, and must be different from and independent of the need for insurance.
For example, a professional order is a group of persons defined in accordance with section 15.1 of the Act since the mission of such an order is primarily to ensure the quality and security of services provided by its members (and not to provide its members with insurance coverage).
In this case, the guarantees required under the basic plan must therefore derive from a private group plan offered to the members of the professional order. For their part, the members of such a group are required to belong to the private plan, as prescribed in the Act, unless they are have drug insurance coverage through another plan which also complies with the Act.
Although they may practice the same profession, persons who are not members of such a group may not subscribe to the private group plan offered to the members, nor may they benefit from the same guarantees. This aspect is covered in section 42.1 of the Act.
[/vc_column_text][/eltdf_tab][eltdf_tab title=”Section 42.1 of the Act”][vc_column_text]“42.1. If a group insurance contract or employee benefit plan applicable to a group with private coverage within the meaning of section 15.1 includes coverage for the cost of pharmaceutical services or medications, that coverage under the contract or plan may not be offered to, made available to or maintained for persons who are not members of the group although they may have the same employment or engage in the same profession, trade or occupation as the members of that group.”
In the same way, a group which is not a “group with private coverage within the meaning of section 15.1” of the Act, may not enjoy the guarantees required under the basic prescription drug insurance plan through a private group plan. The RAMQ, in the same bulletin, gives the following examples of groups which do not constitute a “group with private coverage within the meaning of section 15.1” of the Act:
[/vc_column_text][/eltdf_tab][eltdf_tab title=”Section 42.2 of the Act”][vc_column_text]“42.2. No individual insurance contract that includes coverage for accident, illness or disability and has one or more of the distinctive characteristics of group insurance may be offered to, made available to or maintained for a group of persons to whom section 16 applies, or facilitated for such persons by any means whatsoever, unless it includes coverage at least equivalent to the basic plan coverage.
A uniform annual premium, coverage offered regardless of the risk associated with state of health, rates or financial arrangements based on the history of the group, a contract negotiated between an insurer and an intermediary on behalf of the group and any other condition or circumstance specified by regulation are considered to be distinctive characteristics of group insurance.
A contract that must include coverage at least equivalent to the basic plan coverage under this section is governed by the provisions of this Act that are applicable to a group insurance contract. The insurer or the policy-holder and the persons who are part of the group to whom the contract is offered or made available or for whom it is maintained, must fulfill all their respective obligations under this Act.”
The effect of section 42.2 is to extend the scope of the Act to an array of individual insurance contracts when one or more of the following conditions are met:
Again, according to the INFO assurance médicaments bulletin, an association or a professional order which decides to offer its members individual disability insurance coverage at a uniform rate when its members are eligible for the basic prescription drug insurance plan is subject to the definition in section 42.2 of the Act. The coverage thus proposed must include the coverage required under the basic plan. All members of the association or order must belong to it unless they are insured through another private group plan complying with the Act.[/vc_column_text][/eltdf_tab][/eltdf_tabs][/vc_column][/vc_row][vc_row][vc_column][vc_empty_space][/vc_column][/vc_row][vc_row content_width=”grid”][vc_column][eltdf_tabs tabs_layout=”eltdf-tabs-regular”][eltdf_tab title=”Impact of these legislative changes on the risk pooling system”][/eltdf_tab][/eltdf_tabs][vc_row_inner][vc_column_inner width=”1/3″][vc_column_text]
The definition of a “group” outside of the context of the Act Respecting Prescription Drug Insurance
The Corporation’s Bulletin 2010 – 4 will deal with the differences between the concept of a “group” as is defined in the Act respecting Prescription Drug Insurance and the concept contained in section 60 of the Regulation under the Act Respecting Insurance. It is important to know the distinctions and know that a “group”, as defined in the Regulation under the Act Respecting Insurance, may not be eligible under the Act respecting Prescription Drug Insurance.[/vc_column_text][/vc_column_inner][vc_column_inner width=”2/3″][vc_column_text]The pooling system that has been in place since 1996, is based on the following hypotheses:
[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row][vc_column][vc_empty_space][/vc_column][/vc_row][vc_row content_width=”grid”][vc_column][eltdf_tabs tabs_layout=”eltdf-tabs-regular”][eltdf_tab title=”Coverage of spouses and children under the Act”][vc_column_text]Sections 17 and 18 of the Act, which deal with the concepts of “spouse” and “child”, were also changed in 2005. These articles now read as follows:
« 17. For the purposes of this Act,
1° “child” means
18. Eligible persons, other than those to whom section 15 applies, who are members under a group insurance contract or employee benefit plan applicable to a group with private coverage within the meaning of section 15.1 must ensure that the same coverage is provided to the following persons as beneficiaries under the group insurance contract or employee benefit plan:
(1) their children;
(2) persons suffering from a functional impairment who are domiciled with them. Such persons must also ensure that the same coverage is provided to their spouse, if they share the same domicile, unless the latter is already a beneficiary under a group insurance contract or employee benefit plan referred to in the first paragraph. (…)
The insurance industry’s opinion is that the changes in sections 17 and 18 of the Act, allow an individual covered under a group insurance contract or employee benefit plan to provide drug insurance coverage for his spouse or child with whom he does not live.[/vc_column_text][/eltdf_tab][/eltdf_tabs][/vc_column][/vc_row][vc_row][vc_column][vc_empty_space][/vc_column][/vc_row][vc_row content_width=”grid”][vc_column][eltdf_tabs tabs_layout=”eltdf-tabs-regular”][eltdf_tab title=”In the Next Issue”][vc_column_text]In the Corporation’s Information Bulletin 2011 – 4 read about “The scope of the Regulation under the Act Respecting Insurance with regard to prescription drug insurance and risk pooling”.[/vc_column_text][/eltdf_tab][/eltdf_tabs][/vc_column][/vc_row][vc_row content_width=”grid”][vc_column][vc_empty_space][/vc_column][/vc_row]
