OHIP+ is good news for Ontario-based businesses arriving January 1, 2018

children running and skipping outside

Given the rising cost of specialty prescription drugs and increased use of paramedicals, Ontario businesses who sponsor an employee benefit plan are finally receiving some good news. With the April 27, 2017, announcement by Ontario’s Ministry of Finance, introducing free prescription drug coverage (OHIP+) for everyone aged 24 and under, a plan sponsor’s bottom line will improve.

How will plan sponsors benefit?

  1. A lower number of claims – although children comprise a relatively low percentage of the overall drug spend, drug claims will drop. ClaimSecure recently analyzed the claims data of their clients and expects that “Ontario-based groups will see an average reduction of 5-7% of paid claims. National accounts with members who reside in Ontario can expect a 2.8% reduction in paid claims.”
  2. The Ontario Drug Benefit (ODB) formulary will cover 4,400 drugs; private plans will still pay for all drugs, not on the formulary. View the latest updates to the ODB formulary.
  3. Government as the first payer – government will be the first payer for all covered members and dependents under the age of 25.
  4. Insurers to pass on savings – as group benefit advisors, we’ll be monitoring claims activity to ensure proportionate premium savings for our plan sponsors are established.

Plan sponsor considerations

It’s unclear whether or not eligible residents will need to register for OHIP+. Full details are not yet known. Savings for plan sponsors won’t immediately be available given that insurers will need at least a year to determine the impact of this new legislation on claims activity and cost. High-cost specialty drug claims and those not listed on the ODB formulary will remain the responsibility of the plan sponsor.