On December 10, 2013, the New Brunswick government introduced legislation to provide drug coverage for the 70,000 uninsured families living in New Brunswick. The New Brunswick Drug Plan will be funded by users and through government revenues, while stakeholder consultations will investigate long term funding options.
The initial proposal for this legislation involved a plan to partially fund the drug plan through a payroll tax of 2.25% on all employers without a comparable or better drug plan. RCC opposed this plan as we felt that expanding a provincial public drug plan to cover more drugs and the uninsured; while taxing employers and mandating that employers enhance their private plans at least to the level of the provincial plan would have been both cost prohibitive and an administrative burden for businesses to track and manage (especially in dealing with part time employees).
The government listened to RCC’s concerns and introduced legislation that would fund the drug plan out of existing government revenues and through a co-pay by the users of the drug plan.
Beginning in 2014, the government will begin a year-long consultation into how industry could contribute to the drug plan over the long term. RCC will participate in these consultations.
Member To Do
Members should understand that by April 1, 2015, a retailer with a private group plan must ensure that the private plan’s coverage is at least as good as the New Brunswick Drug Plan.
Members are encouraged to join RCC’s Atlantic Director as participants in the 2014 consultations. The consultation will take approximately 12 months to complete before any recommendations are sent to the Minister of Health. It is likely that any committee recommendations will include the need for the business sector to contribute to this drug plan.
What RCC Did/Next Steps
RCC was clear in its communications with the Minister and Departmental staff that the original proposal would have been detrimental to industry during a time when the New Brunswick economy continues to encounter challenges. This included a meeting that RCC arranged on October 4, 2013, with RCC members and officials in the New Brunswick Department of Health.
The Minister is encouraging industry to participate in the upcoming consultations where a determination will be made on industry involvement in long term funding of the drug plan. The Minister noted that a decision has not yet been made regarding future industry funding of the program. However, he noted that any possible decision in this regard would be sensitive to the fact that the plan should not unfairly penalize businesses.
The legislation will help New Brunswickers avoid catastrophic drug costs and ensure coverage for everyone. It will be based on an individual and family’s ability to pay and will be administered by Medavie Blue Cross on behalf of government.
There will be no deductible. Coverage will not be denied because of age, gender or pre-existing medical conditions. Children eighteen and under will not pay a premium but a parent must be enrolled in the plan.
The plan will roll out in two phases. Phase 1 will occur from May 1, 2014 to March 31, 2015. Enrollment in the program will be voluntary. During this phase, New Brunswickers with no drug plan can get coverage. Also, New Brunswickers with private drug coverage who still have high drug costs; or those with a private plan who need to access a drug that is covered under the government plan but not under their private plan, can choose to join the public plan.
Phase 2 will begin on April 1, 2015. At this point, all New Brunswickers will be required to have prescription drug insurance. Employers with private group drug plans must ensure at least minimum coverage standards as measured against the New Brunswick Drug Plan. This means:
- all private group drug plans will cover every drug covered under the New Brunswick Prescription Drug formulary;
- coverage for qualifying employees must also be extended to the employee’s spouse and dependents.
- employees who work for a company with a private plan but who do not qualify for coverage must seek coverage under the public plan
- private group plans will not be allowed to have annual or lifetime caps on coverage; and
costs at the pharmacy must be managed in one of two ways depending on plan design:
- co-payments paid at the pharmacy may not exceed $30 per prescription; or
- co-payments and/or deductibles paid at the pharmacy for each plan member may not exceed $2,000 per year.
Employers cannot abandon the private drug plan portion of their benefits plan in order to take advantage of the government plan. The legislation ensures that if a company drops its private drug plan coverage, it must also abandon the rest of its benefits plan (eg: vision, dental).
If you have any questions or concerns, please don’t hesitate to contact: Jim Cormier, Director (Atlantic) at: [email protected] or (902) 422-4144