February 2007 Focus Update #107

In this issue ...

Legislation in 2006

A recap of what happened and its impact on group benefits plans

Federal and provincial legislation can have a considerable impact on group benefits plans. Many developments took place in 2006.

Here’s a recap of some of the significant legislation that affected group benefits plans. Because we have already communicated many of these issues in previous Focus Updates, we’ve summarized the issue, where possible, and provided a link to the original communication. 


Privacy continued to make headlines in 2006. The Personal Information Protection Electronic Documents Act (PIPEDA), and similar legislation in British Columbia, Alberta and Quebec, kept provincial and federal privacy commissioners’ offices busy releasing several decisions of interest.

The Parliamentary hearings on the 2006 PIPEDA Review are now in progress before the House of Commons Standing Committee on Access to Information, Privacy and Ethics. Acting on behalf of its members, the Canadian Life and Health Insurance Association (CLHIA) submitted comments to the Office of the Privacy Commissioner (OPC) and to Industry Canada with respect to the PIPEDA review. For Background Information on the OPC’s Consultation with the Committee please refer to OPC Consultation.

A similar review is also underway for the Personal Information Protection Act (PIPA) in Alberta.  The CLHIA on behalf of its members submitted comments for the review to the Select Special Personal Information Protection Act Review Committee on the “Review of the Personal Information Protection Act.

Key Privacy Commissioner decisions

Key decisions made by the federal Privacy Commissioner in 2006 included the following, which can be found in their entirety at www.privcom.gc.ca.

1. Fees and role of a medical practitioner considered in denial of access complaint
In PIPEDA case summary # 341, the complainant had two issues with an insurance company: the fees he was charged to obtain a copy of his personal information, and having access to some of his medical information only through his physician and not directly from the company. Regarding the access to information issue, the Assistant Commissioner viewed that the company could provide him with access to such information via his treating physician. As for fees, the Assistant Commissioner noted that any fees charged should be token, as per Principle 4.9.4, which states that access must be provided at “minimal or no cost.”

Previous findings suggested that an organization should notify the individual of the cost and proceed only with the individual’s consent. The Assistant Commissioner noted that the question of charging fees for copies of personal information is of concern to the Office. Consequently, the Office is currently examining the matter with a view to providing guidance to organizations on this matter. 

2. Disclosure of diagnosis was inappropriate, but insurance company considered to be open about its privacy policies and practices

In PIPEDA Case Summary # 348, an individual discovered that an insurer left some highly sensitive medical information in a voice mail to the administrator of her benefits plan. Despite the insurer’s apology and promise to address the situation, the complainant felt that she should have been told to bring the matter to the attention of the insurer’s privacy officer. She also felt that the insurer wasn’t being open about its privacy policies and practices.

The Assistant Privacy Commissioner agreed that the disclosure was inappropriate but noted that the insurer had taken several steps to address the issue. The commissioner did not, however, share the complainant’s view that the company was not being open about its privacy policies and practices. 

Mandatory retirement – Ontario, Newfoundland and Labrador, and Saskatchewan

Ontario eliminates mandatory retirement

Ontario’s Bill 211, the legislation to eliminate mandatory retirement in the province, received royal assent December 12, 2005 and came into force December 12, 2006. The changes will generally prevent employers from forcing employees to retire from their job once they reach age 65.

A similar amendment to the definition of age was not made in the Employment Standards Act in Ontario so that benefits do not have to be extended
to employees past age 65.

For more information, please refer to Focus Update # 74 and Focus on Legislation in 2005

Newfoundland and Labrador eliminates mandatory retirement

Legislation introduced in Newfoundland and Labrador will eliminate mandatory retirement in the province. Bill 25, An Act to Amend the Human Rights Code, received royal assent and will come into effect on May 26, 2007.
Similar to Ontario, the changes will generally prevent employers from forcing employees to retire from their jobs once they reach age 65.

Exceptions for benefit plans have been maintained in the legislation in the following circumstances:

a) Terminating employment because of the terms or conditions of a good faith retirement or pension plan;
b) Operating a good faith retirement or pension plan according to its terms and conditions, which have the effect of a minimum service requirement: or
c) Operating a good faith group or employee insurance plan according to its terms and conditions.

Newfoundland and Labrador joined Ontario, Alberta, Manitoba, Quebec, New Brunswick, PEI and the three territories in abolishing mandatory retirement.

Impact on your plan
It doesn’t appear that any changes are required to our contracts as a result of this legislation. Providing your plan is a “good faith group or employee insurance plan”, you won’t have to modify your existing group benefits plan coverage to provide benefits to workers over the age of 65. Coverage would continue to be offered at your discretion, as it is today. However, you may want to seek advice to ensure you understand the full impact of these changes on all of your human resources practices.

Saskatchewan bill would eliminate mandatory retirement

On November 6, 2006, Saskatchewan introduced Bill 9, The Saskatchewan Human Rights Code Amendment Act, 2006. The bill, which would eliminate mandatory retirement in the province, would come into force one year after it receives royal assent. The bill currently sits at first reading.

If you want to provide coverage for plan members over 65

As the elimination of mandatory retirement becomes the norm across Canada, you may have questions about continuing benefits past age 65 and what Sun Life Financial can provide.

With the exception of our Long Term Disability product, which terminates at age 65, we can offer you the option to continue benefits beyond age 65.

We generally provide Extended Health Care & Dental care coverage to age 70 or retirement, whichever is earlier. For Life and Accidental Death & Dismemberment, coverage also extends to age 70. Some exceptions to these standards may be available. Please contact your group benefits representative for more information.

We’ll continue to review our product portfolio to ensure we’re able to meet the needs of plan members choosing to stay in the workforce beyond age 65.

For more information on the legislation in Newfoundland and Labrador, go to http://www.hoa.gov.nl.ca/hoa/sr/.

Quebec Parental Insurance Plan

The Quebec Parental Insurance Plan (QPIP) took effect January 1, 2006. It pays benefits to any eligible Quebec employee who takes a maternity, paternity, adoption or parental leave. Previously these benefits were paid through the federal Employment Insurance (EI) maternity, adoption and parental benefits program. The federal EI program still pays benefits for job loss, sickness and compassionate care for Quebec residents.

Information on how the QPIP works, how it differs from EI, and who is eligible for coverage, is available in Focus Update # 90.

Disability plan amendments

Because eligible Quebec employees now receive maternity, paternity, parental and adoption benefits through the QPIP, we amended our short-term and long-term disability plans to deduct benefits paid under the QPIP. We informed our disability customers of this in Focus Update # 94. We also sent a plan amendment that could be filed for future reference.

For more information on the Quebec Parental Insurance Plan, you can visit the Quebec government’s website at QPIP.

Federal budget 2006

Other than previously promised GST cuts, little came out of the May 2 federal budget that affected our customers’ group benefit plans.

GST reduction
Effective July 1, 2006, the government reduced the GST to 6 per cent from 7 per cent. Provinces that use the Harmonized Sales Tax (HST) reduced that rate by one per cent.

In Group Benefits, this change affected:

  • customer invoices/statements we prepare where GST applies to the administration fees.
  • claims-related services, such as professional services rendered throughout the adjudication of disability benefits.
  • a small percentage of eligible health and dental claims (e.g. massage therapy) where the billed amount includes GST/HST. The GST doesn’t apply to most eligible medical and dental claims.

We notified affected customers of the GST reduction. Customer invoices/statements prepared on or after July 1, 2006, reflected the GST rate of 6 per cent.

For more information on the federal budget, go to Federal Budget 2006.

Quebec introduces bill in response to Chaoulli decision

Legislation introduced June 15, 2006, in Quebec addresses a 2005 Supreme Court of Canada decision (Focus Update # 74) that opened the door
for private insurance to cover medical care in Quebec. Bill 33, An Act to amend the Act respecting health services and social services and other legislative provisions, aims to improve access to certain special medical services.


At the end of February 2006, the government released a consultation paper in which it proposed guarantees for access to timely health care through the public system (see Chaoulli decision in Quebec in Focus Update # 93). The Quebec government held public consultations and heard submissions from a variety of stakeholders, including the Canadian Life and Health Insurance Association (CLHIA). Bill 33 followed shortly thereafter.

Bill 33’s impact on group benefits plans

The bill’s content closely follows the February 2006 consultation paper. It limits the purchase of private insurance to hip and knee replacements and cataract surgery. However, it also contains a clause allowing the government to expand this list to other services through regulatory changes to Bill 33.

Committee hearings on Bill 33 were held between early September and mid-October. The feedback was not positive.

We have received many questions from plan sponsors concerned that their contract wording may not exclude coverage for these services that are still being provided through the public system,
but that may now also be covered under private plans. Our standard contract wording supports our current practice, which is that we would not pay for services that are provided under the public plan.

Bill 33 was enacted December 13, 2006, and will come into force at a date to be set by the  government. However, the provisions dealing with private insurance will be effective retroactively from June 9, 2006, the date of the Supreme Court of Canada judgment in the Chaoulli case.

Canada Pension Plan’s new Reimbursement Agreement

Changes to our group disability products because of new agreement

We advised you in Focus Update # 89 of a new Canada Pension Plan (CPP) Reimbursement Agreement that took effect January 4, 2006. In a follow-up Focus Update (Focus Update # 101) in October 2006, we informed you of our decision to no longer include CPP or QPP dependent benefits as an offset in either our group Long-Term Disability or Short-Term Disability products offered to new customers.

The new CPP Reimbursement Agreement reduces the number of situations where we can seek reimbursement from CPP. As of January 4, 2006, we cannot seek reimbursement if:

  • we are offsetting or plan to offset CPP dependent benefits – either directly or indirectly –or
  • we are ‘deeming’ (or estimating) the claimant’s portion of CPP disability benefits prior to a decision by CPP to grant a benefit, or we have done so while paying group disability benefits during the same period.

The new processes we’ve put in place ensure that we comply with the new Reimbursement Agreement. Failure to comply with the new terms could mean the termination of our CPP Reimbursement Agreement and our ability to be reimbursed by CPP for all of our customers’ disability plans.

Eliminating the CPP dependent benefit offset from your disability plan

We recommended in Focus Update # 101 that you should also consider changing your group disability plan to eliminate CPP dependent benefit offsets. Doing so helps to ensure that the Reimbursement Agreement continues to apply to your plan members’ claims. It will also help to prevent overpayments that would result from retroactive CPP awards paid to claimants, not to mention the frustration for members having to repay them. 

We also suggested that even if you have only Quebec-based members, you may want to consider eliminating QPP dependent benefit offsets. Should QPP make similar changes regarding reimbursement, your plan would already be on side.

Your choice at renewal

In the October 2006 Focus Update we mentioned that with your next renewal package we would ask you to decide whether you want to remove the CPP/QPP dependent offset provision from your benefit plan design at your renewal. We also discussed any impact on rates based on the changes selected.  

For more information on the new Reimbursement Agreement and its impact on our disability plans, please refer to Focus Update # 89. For more details on what we’ve done to comply with the Reimbursement Agreement, why the elimination of CPP/QPP dependent offsets make sense, and how we’re implementing the change – including the impact on rates – please refer to Focus Update # 101.

Changes to improve Ontario’s drug system

Bill 102, Transparent Drug System for Patients Act

In response to recommendations made by the province’s Drug System Secretariat in January 2006, Ontario tabled Bill 102, Transparent Drug System for Patients Act, on April 13, 2006. The bill received royal assent on June 20, 2006.

The legislation proposed a number of drug system improvements that we believed would affect group benefit plans (see Key issues for group insurers in Focus Update # 96. We didn’t have enough information at the time, however, to accurately assess any potential impact on your plan. 

In Focus Update # 102 we outlined several key changes that took effect and their potential impact on your plan. Some of these changes took effect October 1, 2006; others have been deferred until April 1, 2007.

Many of the regulatory and policy changes under Bill 102 continue to be developed by the Ontario government. We’ll keep you informed as we learn more about how these changes will affect your group drug plan.

More information is available at Transparent Drug System for Patients Act.

Cancer Care Ontario proposal would allow patients to pay for cancer drugs

Cancer Care Ontario is an independent government agency and chief advisor on cancer care to the Minister of Health and the province. Earlier in 2006, a working group put together by Cancer Care Ontario released a proposal recommending that hospitals be allowed to charge patients for certain cancer drugs not covered by the province.

Essentially the proposal would allow Ontario hospitals to sell and administer, on a patient-pay basis, cancer drugs approved for sale in Canada but unfunded by the Ontario government. If the proposal were adopted, patients would pay for the unfunded drugs and a user fee for hospital services.

We formed a working group to evaluate the issue and have been working with the Canadian Life and Health Insurance Association (CLHIA) to obtain more information. In October (Focus Update # 102) we provided you with more details about Cancer Care Ontario’s mandate, what their proposal entails, and the many issues that need to be resolved before any impact on benefits plans can be assessed.

The Ministry of Health has indicated that it will
consult with Ontario residents before making any decisions. However, the Ministry hasn’t released further details as to how it will gather this feedback.

What’s next?

Our own working group will continue to evaluate this issue and work with the CLHIA to obtain more information. As we receive more information we hope to better understand how these recommendations may affect your benefit plan. 

If the proposal is adopted, unfunded cancer drugs billed to patients covered under a Sun Life Financial Extended Health Care plan will be eligible for payment in most circumstances. For now, from an administrative standpoint, we will continue to adjudicate claims as we have in the past (i.e. we won’t cover cancer drugs administered in a hospital).

As further background information, under the Canada Health Act, drugs administered in a hospital are intended to be covered under the hospital budget. As such, we do not pay for drugs administered in a hospital. However, Cancer Care Ontario’s proposal, if adopted, may affect how we cover these “hospital drugs”. We will continue to work with the CLHIA to obtain more information. 

For more information on Cancer Care Ontario, go to www.cancercare.on.ca

Changes for federal cancer care agency

In late November the federal government announced the establishment of The Canadian Partnership Against Cancer. The purpose of this not-for-profit corporation will be to implement The Canadian Strategy For Cancer Control under a five-year plan. Operating at arm’s-length from the government, its objectives are to:

  • reduce the number of new cases of cancer
  • enhance the quality of life for those living with cancer
  • lessen chances of dying from cancer.

At this point, however, it doesn’t appear that the agency’s mandate includes anything along the lines of Cancer Care Ontario’s proposal for better access to cancer drugs. But we’ll need more information before we can determine whether any of the agency’s strategies will affect group benefit plans.  For more information on the Canadian Strategy for Cancer Control, go to CancerControl

Provincial health plan updates

Recent changes to provincial health plans in Manitoba, Alberta, Nova Scotia, and Newfoundland and Labrador won’t have a significant impact on your benefits plan. However, since many of these changes illustrate a subtle trend of cost shifting from government to private plans, we wanted to give you an idea of what types of services the government is delisting. 

Manitoba Pharmacare changes

Deductible increases

Manitoba residents who register for the province’s Pharmacare program pay a deductible based on a percentage of their annual family income. For the April 1, 2006, to March 31, 2007, benefit year the deductibles increased by approximately five per cent (or $3 to $6 per month) for most Pharmacare families. This will not affect plan costs or the claim thresholds we implemented earlier this year for Manitoba plan members.

Coverage for Proton Pump Inhibitors

Manitoba has changed the coverage it provides for proton pump inhibitors (PPIs) to manage escalating drug costs within the Pharmacare program. PPIs are a group of prescription medications for the treatment of heartburn (acid reflux), ulcers of the stomach or intestine, or excess stomach acid. The focus is on encouraging the use of Pariet and Apo-Omeprazole, lower-cost drugs that are clinically proven to be as effective and safe as other PPIs.

Effective March 13, 2006, an Exception Drug Status (EDS) approval process was implemented. Under this process, patients must try and fail a course of Pariet 10 mg and Apo-Omeprazole 20 before their physician can apply for EDS coverage for an alternative PPI drug. Patients that were undergoing therapy at the time of the change were exempt until January 15, 2007. 

For more information on these changes, go to

Alberta pharmacists authorized to prescribe certain drugs

New regulations announced by the province in July will give pharmacists authorization to prescribe certain drugs and administer some injections. The Pharmacists Profession Regulation will likely take effect in 2007.

While many of the details are not yet finalized such as the list of drugs, training required and the controls and audits to be put in place, it’s expected that pharmacists will be allowed to:

  • Prescribe specified drugs, primarily to treat minor ailments.  
  • Alter the dosage, formulation or regimen of specified drugs and renew those prescriptions.
  • Substitute one drug for another if the expected therapeutic outcome is the same.
  • Substitute a generic equivalent.

Sun Life Financial Group Benefits’ position
Several years ago when a few provinces relaxed the prescribing authority of some practitioners, among them nurses and optometrists, we amended our standard contract language to include the clause:

Sun Life will reimburse certain drugs prescribed by other qualified health professionals the same way as if the drugs were prescribed by a doctor or a dentist if the applicable provincial legislation permits them to prescribe those drugs.

We will continue to adjudicate drug claims according to the above contract wording. This means that we will accept claims for drugs prescribed by a pharmacist in Alberta.

Given the controls already in place, we don’t 
anticipate an increase in the number of prescriptions or an increase in claim costs.

For more information about this change, go to http://www.gov.ab.ca/home/index.cfm?Page=1458.

Nova Scotia introduces Low Income Pharmacare for Children

On October 1, 2006, Nova Scotia implemented a program to help low-income families with the cost of prescription drugs. Through the Low Income Pharmacare for Children program, eligible families can purchase drugs for their children at $5 per prescription regardless of the cost of the drug. Families must be receiving the Nova Scotia Child Benefit and have a household income of under $20,921 per year to be eligible. Children must be under the age of 18. Those already receiving Pharmacare from the Department of Community Services or covered under a private health plan are not eligible. Therefore, this program will have no impact on our group drug plans.

More information about Low Income Pharmacare for Children is available at www.gov.ns.ca/coms.

Newfoundland and Labrador expanding dental and drug programs

Improvements to children’s dental health program
The Newfoundland and Labrador Dental Health Plan provides universal dental coverage for children 12 and under, and coverage for children 13 to 17 whose families receive income support. Effective September 1, 2006, the province increased the fees allowed under the Medical Care Plan Payment Schedule and became second payer for families covered by private insurance.

We don’t currently have a formal process in place to coordinate claims with the Newfoundland program, i.e. we have always paid dental claims from Newfoundland residents as we receive them. Because of this practice our claims costs will not be affected, and there will be no impact for plan sponsors.

Proposed changes to Prescription Drug Program
Newfoundland and Labrador currently provides some drug coverage for residents under the Senior Citizen’s Drug Subsidy Program, Special Needs Programs and the Income Support Drug Program. The province recently introduced proposed legislation, which will expand eligibility under the Newfoundland and Labrador Prescription Drug Program to include more low-income residents. Families with children who have an annual household income up to $30,000, couples with an annual household income of up to $21,000, and single people earning up to $19,000 per year will now be eligible. Participants in the program will be responsible for a co-payment of between 20 and 70 per cent. Under the new legislation the province will be the payer of last resort for all drug programs.

The proposed legislation also includes:

  • The Tamper Resistant Prescription Drug Program designed to curb the abuse of certain types of drugs by requiring the use of tamper-resistant prescription drug pads for designated drugs (e.g. narcotics). This will reduce the instances of forgeries and alterations to prescriptions.
  • The Newfoundland and Labrador Interchangeable Drug Products Formulary, which will allow coverage for more generic drugs by implementing new review and pricing policies and changing the definition of “interchangeable” to allow the same or similar active ingredients in the same or similar forms.

While the legislation is expected to pass this fall, the implementation date is unknown. We will be receiving further details about the program in the coming weeks and will then be in a position to assess any impact to our drug plans. As information becomes available, we will pass it on.

For more legislative news

More information on the issues discussed above and other legislation-related news can be found in Focus on legislation in 2006 in the Focus Update archives at Focus Update 2006. If you have any questions, please contact your Sun Life Financial group benefits representative.  



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