The portion of claims eligible for pooling is entirely compensated from the annual pooling factors paid per certificate.
At the time of compensation, the annual pooling factor may be revised upwards to ensure full compensation of the amounts involved, or down, if appropriate. Thus, the total amount claimed in excess of the pooling thresholds at the end of a year is equal to the total amount paid in compensation. No surplus or deficit is created.
The volume of claims is distributed over the entire pooled population (that is, all certificates), based on a layered “pyramidal” compensation formula. This prevents groups from having to absorb too large a volume of claims.
The Pooling Process
Each year, by March 31 at the latest, insurers and administrators of insured and non-insured employee benefit plans must transmit the information about their groups that is required for pooling to the Process Manager – that is, to the firm appointed by the Corporation to oversee the evolution of the process.
In particular, they are required to declare the total amount of drug expenses they have paid out during the previous year for each certificate within their groups with claims in excess of the pooling thresholds.
The Process Manager sends a reminder to all participants at the end of February. The letter specifies the rules to be observed in transmitting data and the deadline for their transmission.
With this letter the Process Manager includes a Certificate of Compliance. Each participant is asked to complete this document to attest to the authenticity and accuracy of the information submitted to the Corporation.