On May 18, 2004 the Government of Ontario announced that services currently provided through the Ontario Health Insurance Program (OHIP) would no longer be covered.

• Chiropractors; A specific date for the Chiropractor de-listings has not been released; only that it will take place in the Fall 2004.
• Physiotherapists; Effective March 31, 2005
• Optometrists (eye exams); Effective November 1, 2004

Chiropractor- Fall 2004

In keeping with industry norms at the time, your current plan was set up to provide coverage for Chiropractors only after the provincial government maximum of $150 had been reached. Therefore, when these services are de-listed, your plan will pick up the cost from first dollar, unless you request otherwise.

Initial estimates reveal that the de-listing of Chiropractor services could impact your Health Care costs for active employees by approximately 3% - 4%.

When Chiropractor already paid from 1st dollar: Your current plan already provides coverage for Chiropractors from first dollar; therefore, de-listing of these services will have little, or no impact on the cost of your plan.

Physiotherapist � March 31, 2005

The de-listing of Physiotherapy services will have little impact on your group plan. OHIP currently provides coverage only for physiotherapists operating at government-approved facilities. Since it is difficult to get an appointment with one of these providers, many employees are already utilizing private facilities and submitting expenses to their group plan.

Optometrist � November 01, 2004

Because your current plan includes coverage for routine eye exams as part of the Vision Care benefit, expenses that were previously covered by the provincial government will now be claimed under your group plan (for persons between 20 and 65 years of age). Since eye exams are combined with frames and lenses in the benefit maximum, it is expected that this will affect the cost of your benefits program by only �%.

Where eye exams are stand alone as part of Health Care benefit (i.e.: not part of Vision Care): Because your current plan includes coverage for routine eye exams under the Health Care benefit, expenses that were previously covered by the provincial government will now be claimed under your group plan (for persons between 20 and 65 years of age). It is expected that this will affect the cost of your benefits program by up to 1%.

Where plan does not include any existing coverage for eye exams: Your current plan does not include coverage for routine eye exams, so the de-listing of this service will not affect the claiming pattern on your group. Persons between the ages of 20 and 65 will now have to assume the cost of all eye exams, not just those every second year as they do now (if at all).

If you wish to add coverage to your plan for eye exams it can be handled in several ways. If it were added as a stand-alone expense under the Health Care benefit, with a stated maximum of $50 (for example), your costs would increase by approximately 1%. Eye exams can also be included as part of a Vision Care benefit, if a Vision benefit is already in place. Since eye exams would be subject to the combined Vision Care maximum in this case, there should only be a slight additional cost to your plan.

Other � Additions to OHIP coverage

Although the government has decided to assume the cost of some children�s vaccines under the provincial plan, the impact to employer sponsored plans is expected to be negligible.

Ontario Health Premium � OHP

Although the amendment to the Tax Act clearly indicates that the employee is liable to pay the Ontario Health Premium, employers may face pressure to reimburse your employees. The OHP is structured as a form of income tax. This is very different from a traditional premium because the actual amount owing is not known until the individual files his or her tax return. Furthermore, statements made by the Minister of Finance since the budget was first tabled are consistent with the view that the Ontario Health Premium is a personal tax.

It has been our experience that most employers have no initial plans to pay any part of the OHP for their employees. However, if an employer does pay the OHP it will be considered a taxable benefit to the employee.

Next Step

When any form of government de-listing takes place, many insurers are bound to pick up the downloaded expenses since they would be deemed eligible under most contracts the way they are currently written.

However, if you are not willing to assume the extra cost now, or at any time in the future, you may want to consider implementing changes that will protect your plan. Some insurers and plan sponsors have implemented contract and booklet wording stipulating that the employer sponsored plan will not automatically assume additional benefits simply as a result of a government download. With this in place, a plan sponsor has the option to approve the additional coverage or not.

We recommend that you review the above information as it relates to your own firm�s philosophy on employee benefits and budgetary restraints. Then, prior to the government de-listing, decide how you wish to handle the downloaded expenses.

Our consultants would be pleased to discuss the subject with you in greater detail.

Please contact us directly at 416-620-0779
or toll free at 1-877-432-8486 or by E-mail: torontoinfo@heath.ca

Posted On: July 27, 2004