Alberta’s recently-passed Bill 11 allows employers to offer employees access to private health services through their benefits plans and protects older employees from losing employer-sponsored health benefits solely based on age.
Under the legislation, physicians and surgeons are now allowed work in both the public system and private-pay market. The legislation won’t apply to primary care services, at least initially, notes Kenneth MacDonald, associate vice-president of employee benefits at Hub International Ltd., adding it will only be for procedures like orthopedic surgeries or hip replacements.
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“What’s different is that those physicians used to have to choose whether they worked fully in the private system or the public system, and now Alberta has officially opened the door allowing those practitioners to be able to work in the public system and pick up a few extra hours on their off time by doing these types of surgeries, as long as they’re performed externally and not in a public facility.”
The main concern with allowing physicians to practice in both private and public systems is that it can be a slippery slope, he adds. “It will start with orthopedic surgery and similar [procedures], but eventually it may slide into all forms of physician and hospital services. That’s not the case yet, and changing government could easily put the brakes on or stop it completely, but it does make it a bit like [opening] Pandora’s box.”
The legislation is also improving the coordination of drug coverage between public and private plans, ensuring that private plans are fully utilized while preserving public coverage for those who need it most. This change could result in an increase in drug and health costs between two and five per cent, notes MacDonald, depending on how many people in a company’s working population are older than age 65.
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“Typically, once somebody turns 65, they qualify for a seniors’ drug program, which would be the first payer, while the private plan would be the second payer. Sometime this summer, that will change so the private plan will be the first payer, and the government plan will be the second payer. And that’s the first of its kind in Canada.”
Bill 11 also protects older Albertans from losing employer-sponsored health benefits solely due to age. Employers can no longer terminate or reduce benefits coverage for employees aged 65 and older who are actively employed.
“It’s just a good idea for employers to continue to cover all active employees with the same coverage for life, health and dental — with the exception of [long-term disability],” says MacDonald. “While there are few employer-sponsored retiree benefits plans left, for Alberta employers with plans that cover health and drugs for retirees aged 65 and older, the impact could be significantly higher and have a material impact on post-retirement accounting liabilities.”
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