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Attributes
- employee: usually active, full-time employee and their dependants
- dependants: legal/common-law spouse, dependent children ≤ 18 (25 full-time student)
- cost sharing: through payroll deduction, deductibles and coinsurance
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Reasons for upward pressure on drug plan costs
- introduction of more expensive drugs
- shift towards early release from hospital
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Reimbursement systems
- pay as you submit: pay in full and file a claim for reimbursement
- pay direct: claim is adjudicated for price and eligibility directly between the claims administrator and the pharmacist; only pay deductible or coinsurance
- hybrid: pay in full, pharmacist electronically files claim
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Reasons for rising extended health care costs
- changing demographics: older people take more prescription drugs; people live longer
- government cost-shifting: shorter hospital stays shifts costs that would be covered
- prescription drug costs: average pharmacy fees, quantity, introduction of new drugs
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Modifications to drug programs
- generic substitution: unless prohibited by physician; same active ingredient / strength
- lower-cost alternatives: based on price of lowest-cost drug
- therapeutic substitution: less expensive drugs with different active ingredients
- lifestyle drugs: limited (smoking, sexual dysfunction, anti-obesity, oral contraceptives)
- drug utilization review: analyze appropriateness of drug usage
- managed care formularies: covers specific list of eligible drugs, updated regularly
- three-tier co-payments: amount reimbursed is determined by employee’s choice
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Categories of dental services
- basic services: diagnostic, preventive, restorative
- supplementary basic services: endodontics, periodontics, some surgical services
- major services: crowns, removable prosthodontics
- orthodontics: braces to correct misaligned teeth
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Taxation
- premium paid by employee (if any) is not directly deductible from income, but may be included in the calculation of the individual medical expense tax credit
- employer contributions = operating expense
- employer contributions for private health services are not added to income, except QC
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