Twenty-three insurance companies across Canada, that collectively represent 100 per cent of the supplementary
drug market, have committed to joining this pooling framework. While this is great news for employers and employees alike, it's always important to read the fine print.
There are different kinds of private health plans, traditional - fully insured plans and self-funded or ASO plans. The pooling framework provides protection for fully insured plans as they already participate in an internal pooling framework, however self-funded or ASO plans as they are more commonly known do not participate in the pooling of claims and therefore are exempt from this new initiative. The result for these groups is the risk of having plan members excluded from coverage should the group need or decide to switch back to an insured model. Remember these are catastrophic claims which means they are extremely expensive and that a self-funding model means that the employer pays claims as incurred, how long would you continue to pay these claims before terminating coverage or passing the risk back to the insurer.
While this initiative will ensure sustainability of drug plans it's important to understand the cost! Being or considering ASO for the potential to save 3%-5% of the fully insured cost may not be worth the price of excluded plan members.
Read more by visiting http://www.clhia.ca/