ANNUAL REPORTDECEMBER

2020

Prescription drug, health and dental insurance plans for members

On January 1, 1997, the Government of Quebec passed the Act respecting prescription drug insurance, the purpose of which was to provide Quebec residents with reasonable and fair access to prescription drug coverage.

Since then, every resident of Quebec must be covered at all times for prescription drug insurance under one of two types of plans:

• the public plan, administered by the Régie de l’assurance maladie du Québec;

• a private plan, generally a group insurance plan offered by an employer, which must provide at least the same level of coverage as the public plan.

COVERAGE THAT MEETS CPA MEMBER NEEDS...

In sync with its members’ preoccupation with ongoing financial health in case of sickness or accident, the CPA Order established, many years ago, an insurance program exclusively for its members.

Designed in conjunction with one of Quebec’s leading actuarial firms, this program offers an advantageous array of the most common insurance coverages such as life, disability, critical illness and office overhead, facilitating access to superior coverage for members who do not benefit from group insurance coverage in their workplace.

...AND REMAINS GOVERNED BY THE ACT RESPECTING PRESCRIPTION DRUG INSURANCE

The Act also required that professional orders and associations, including the CPA Order, offer a plan at least equivalent to the public plan. In addition, no discrimination is allowed: all eligible members must have access to the minimum coverage for themselves and their dependents, regardless of their state of health or prescription drug use. (For a complete definition of dependent, please refer to page 10).

As such, it becomes the plan of last resort for members under 65 years of age, who do not benefit from coverage through an employer, spouse or other professional association.

HISTORY

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TABLE OF CONTENT

Plan oversight...............................................................................................4

Premium components...................................................................................5

A unique financial agreement.......................................................................6

Financial results............................................................................................7

Maintaining a positive trend.........................................................................8

Reminder of the definition of eligible dependent..........................................9

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The CPA Order entrusts the management of the insurance plans for members to the Vigilis Group. The Order’s Insurance Work Group is also accompanied by Normandin Beaudry, a firm of experienced actuaries, who regularly submit research and comparative analysis data to ensure that the plans remain relevant and competitive.

In the spring, the Order surveyed participating members in order to obtain their viewpoint on the plan’s different elements. With the results in hand, the Ordre will proceed in 2021 with an indepth review of the plan. In the interim, the Order’s Insurance Work Group ensures a constant monitoring of the plan, which involves, among other things:

HIRING

Hiring independent consulting actuaries to evaluate the insurance plans.

REVIEWING

Reviewing the plans regularly to ensure they are current and continue to meet the needs of the majority of members.

EXAMINING

Examining financial results and statistics related to each of the plans already offered on a regular basis.

DECIDING

Analyse the experts’ recommendations and make decisions regarding changes in premiums, benefits or financial arrangements.

DISTRIBUTING

Ensure equitable distribution of annual surpluses to insured members.

The goal is to provide members with a flexible plan that meets their needs at the lowest possible cost.

PLAN OVERSIGHT

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PREMIUM COMPONENTS

Aggregate claims reimbursed to all insureds

Administrative expenses and pooling charges

Variations in the reserve

Inflation / Trend

AGGREGATE CLAIMS REIMBURSED TO ALL INSUREDS

Prescription drug costs have a significant impact on the plan’s experience. In order to mitigate this impact, various control measures were introduced a few years ago, such as the reimbursement of the least expensive drugs that are available and appropriate for a given condition. In addition, the reimbursement formula encourages the use of generic drugs when available.

It is important to note that the claims you submit personally have no impact on your premium, which is set solely based on the chosen plan and your age group.

ADMINISTRATIVE EXPENSES AND POOLING CHANGES

Administrative expenses include all the expenses related to claim payments, distribution, invoicing, as well as a risk premium.

In addition, to mitigate the impact of larger claims, the agreement with the insurer provides that amounts over a certain threshold and travel insurance claims are fully covered by the insurer, for which pooling charges are made to the plan

VARIATIONS IN THE RESERVE

The agreement with the insurer provides for the obligation to maintain a reserve to cover the payment of claims incurred during the period but not yet reported at the closing date of the policy year. As this reserve is set as a percentage of the total premium paid, any variation thereof generates a positive or negative change on the reserve to maintain.

INFLATION / TREND

As you know, drug costs generally increase from one year to the next, and private plans, such as those of the Order, have few tools to pressure the pharmaceutical industry to limit these increases. In fact, new drugs on the market, while effective, can be extremely expensive, with many exceeding $25,000 a year. In addition, the use of drugs generally increases with age.

Needless to say, these factors lead to significant inflation in drug claims, which in turn impact premiums.

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A UNIQUE FINANCIAL AGREEMENT

GOAL OF THE WORK GROUP

The goal of the Order’s Insurance Work Group is to offer you a choice of advantageous plans at annual premiums sufficient to cover expenses. That’s why the agreement negotiated with the insurer provides for an ingenious protection mechanism

WHEN, IN A GIVEN YEAR:

PREMIUMS EXCEED ALL RELATED COSTS

Any premium surplus generated during the policy year is credited to a premium stabilization fund, which serves as a buffer against recurring changes in claims results.

Any surplus generated in excess of the stabilization fund’s threshold is refunded to participating members, according to their contribution to the plans, thus ensuring that the premium paid is fair and equitable.

THE PREMIUMS SET ARE INSUFFICIENT TO COVER THE COST RELATED TO THE PLAN

Any losses incurred at the end of the year are then charged to the stabilization fund. Any deficit thus created will be replenished by the surpluses generated in future years, if necessary.

Of course, if the plan is in a deficit position, there will be pressure on pricing, in order to avoid recurring deficits.

In summary, the Order’s Drug and Health Care insurance plans are similar to a well-managed mutual insurance company.

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RESULTS FOR THE PERIOD

As apprehended in last year’s report, the widespread use of expensive biologic drugs for the treatment of medical conditions such as diabetes ans psoriasis increases the pressure on the plan.

Although access to certains services, such as paramedical practitonners, was limited during the spring shutdown, we must keep in mind that the period analysed covers a full year ending June 30.

In addition, premiums are set on a prospective basis, i.e. they must cover expected claims for the coming year.

We remind you that any premium surplus generated during the policy year is credited to a premium stabilization fund, which serves as a buffer against recurring changes in claims results - see the preceding section.

Fortunately, not all of these amounts are charged to the plan, as a pooling mechanism under which claims over a pre-established threshold, as well as all travel related claims, are attributed to the Insurer’s overall book of business.

Over the past year, this mechanism has continued to be very beneficial, with the Insurer paying out close to $3 for each dollar paid under the agreement.

As apprehended however, the pooling premium guarantee expired this year and an important increase in these costs apply, although not as important as the insurer initialy requested.

AMONGST COSTLY MEDICATION

In order to limit the impact of new drugs on the group’s experience, a process, which does not affect drugs that are currently insured, evaluates the cost/clinical benefit ratio before they are added to the list of covered drugs. You can find a document, which explains this process called SMART in the Client Center of our website at vigilis.ca/cpa/en.

Remicade - Treatment of rheumatoïd arthritis Humira - Treatment of rheumatoïd arthritis Orkambi - Treatment of asthma / lung disease5 following - Cancer, Crohn’s disease, Hepatitis C, Multiple sclerosis

Thus, the most expensive drugs represent close to 30% of overall drug costs.

MAINTAINING A POSITIVE TREND

The goodwill of all is required to maintain the plan’s good health.

Since even small gestures count, here are 3 ways to help control premiums in view of next year’s renewal .

SAVE ON VOLUME PURCHASES

Did you know that if you use a prescription drug on a regular basis you can, in most cases, purchase a three-month supply? You thereby save on the pharmacist’s dispensing fees!

LOOK INTO GENERIC DRUGS

Generic drugs are low-cost versions of brand name drugs produced by several manufacturers once the applicable patents have expired on the brand name drug.

In Canada, all generic drugs are approved by Health Canada which attests to their bioequivalence with their original versions.

SHOP YOUR PHARMACY

Few people are aware that the costs of medication can vary greatly from one pharmacy to another. We encourage our insured members to shop around and save money.

Shop online or in person : become a better informed consumer! For more information, please go to www.mypharmacyinvoice.ca.

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REMINDER OF THE DEFINITION OF ELIGIBLE DEPENDENTS

As a CPA member, in accordance with the Act respecting prescription drug insurance, if you’re under 65 year of age, you must maintain coverage under the plan sponsored by the Ordre for your eligible dependents if they are not covered by a group health insurance plan.

This obligation applies to your spouse, either legally married or common-law. A common-law spouse is a person who has been living with you in a conjugal relationship for at least 12 months or, if you are a Quebec resident, regardless of the duration if a child is adopted or born of the relationship.

In the event of a divorce from your spouse or a separation from your common-law spouse coverage cannot be maintained. You must therefore notify us so that we may adjust your premium accordingly.

Your unmarried children under age 21, or under age 26 if full-time students, also meet the definition of dependents under the plan. Children under age 21 are not eligible if they are working more than 30 hours a week, unless they are full-time students.

Children who are incapable of supporting themselves because of a physical or mental disorder are covered regardless of their age if the disorder begins before age 21, or before age 26 while they are full-time students, and the disorder has been continuous since that time.

WARNING! The insurance programs offered by universities do not satisfy the requirements of the law and only offer supplementary coverage to a drug insurance plan. You must therefore maintain coverage for eligible children under your insurance plan with the Ordre des CPA and to advise us of any changes to their status. For more information on the Act respecting prescription drug insurance, please refer to : www.ramq.gouv.qc.ca/en/citizens/prescription-drug-insurance.

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