These types of claims can potentially result in substantial increases in insurance premiums and pool charges.
To avoid these increases, plan sponsors often look to reduce the comprehensiveness of coverage by placing restrictions their drug plans to control costs. These measures may include limiting or influencing the choice of therapy, as well as limiting the amount of benefits payable to employees through annual or lifetime caps. These measures can save money in the short term but are unsustainable in the long term as they can limit access to treatments necessary for employees to return to work often resulting in long-term disability or other expensive consequences.
Risk management and pooling mechanisms are available to help spread the risk of unexpected high-cost claims across a larger population. Currently, outside of Quebec, participation in these mechanisms is voluntary and specific costs and calculation methodology are not shared publicly. In Quebec, all private plans with fewer than 6,000 covered lives are mandated to participate, and associated costs and calculation methodology are available publicly. As a result, small Quebec plan sponsors experience less volatility and are better protected against high-cost claims compared to the rest of Canada. Actions to modernize adequate and effective risk management and pooling outside of Quebec are becoming increasingly critical to preserving the quality of health benefits coverage for employees.
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