Employers that provide health and wellness benefits for retirees will want to make sure they keep an eye on a number of changes to the Ontario Drug Benefit program announced in the budget on Feb. 25.
“They will want to make sure they look at their plans to avoid having to pay twice, and that they don’t cover things that are now going to be covered under the enhanced Ontario program,” said Mark Firman, a partner in McCarthy Tetrault LLP’s pension, benefits and executive compensation group in Toronto.
Read: Ontario Budget: Redesigned public drug program to come by 2019
In its 2016 budget, the Ontario government said it would introduce a redesigned public drug program by 2016 and also outlined a number of proposed changes to the program for seniors that will take effect on Aug. 1, 2016.
The changes for seniors are not set in stone, however, as Premier Kathleen Wynne told the legislature this week that the regulation is out for consultation and “if we didn’t get it right then we will make a change in terms of that threshold,” according to a story in the Toronto Star.
The proposed changes include:
- An increase in the income thresholds to qualify for benefits to $19,300 from $16,018 for single seniors and to $32,300 from $24,175 for senior couples. Seniors with incomes below those thresholds will continue to pay up to $2 per prescription with no annual deductible.
- An increase in the annual deductible to $170 from $100. The co-payment will rise to $7.11 per prescription from $6.11.
In light of the incoming changes, Firman warned that employers should be mindful of the legal constraints on their plans. “If the wording isn’t flexible enough, it could arguably be a windfall for retirees who insist on the original terms of their plan,” he said.
Read: Legislative round-up: key dates for group benefits plans
Updated on March 2 at 2:20pm