In October of 2024, the Canadian federal government took the first steps toward a national, universal pharmacare program for Canadians, by introducing universal coverage for contraception and diabetes medications. The program will be available across the country, for people of all income levels – but its launch is pending while agreements with the provinces and territories are worked out.
Canadian healthcare can be a point of confusion for US and international employers, especially when new programs are launched! In this blog we will explain how prescription drug coverage works in Canada, what the new program will cover, and how that impacts employers.
How Does Pharma Coverage Work in Canada?
The Canadian healthcare system is a mixed private-public system. While basic healthcare including doctor’s visits, emergency visits and medically necessary tests are fully covered by the public system, vision care, prescriptions, and dental are not.
Most Canadians rely on employer-sponsored health insurance for vision, prescriptions, and dental. 80% of employers in Canada offer some form of extended health benefits. Prescription coverage is one of the most sought-after benefits.
Who Qualifies for the Canadian Pharmacare Plan?
The plan will cover all Canadians with prescriptions for certain contraceptives and diabetes medications. As the plan expands, it will cover a variety of diabetic health devices as well. You can find a full list of the diabetic medications and devices it covers here, and a list of the contraceptives it covers here.
When will the Pharmacare Plan in Canada come into Effect?
Because healthcare is a provincial responsibility in Canada, how and when the plan is delivered will depend on when each individual provincial government reaches an agreement with the Feds.
So far, only the government of British Columbia has issued a memorandum of understanding to move the plan forward in that province.
Because BC already provides free contraception, they will use that portion of funding to provide free hormone replacement therapy to women experiencing menopause.
How Will the Pharmacare Plan Impact Employers?
If the pharmacare plan survives the upcoming 2025 election and rolls into effect across the country, employers may reap the benefit of lower insurance costs. Diabetes medications and devices are one of the fastest growing sources of benefit claims. The pharmacare plan would remove this category of healthcare expenses from the private sphere entirely.
However, if the pharmacare plan is canceled by a new government, the only impact on employers will be some lingering employee confusion.
How Employers of Record Help?
Employers of Record like Canadian Payroll Services hire Canadian workers on behalf of US and global companies. This allows companies to expand their teams into Canada without having to open a local subsidiary or manage local payroll. A key part of any EOR’s services is providing benefits to worksite employees.
EORs create large master plans to offer corporate style benefits to large and small businesses alike. As your local benefits partner, they keep you compliant with provincial employment and tax laws and keep you up to date with emerging benefit trends.
Canadian Payroll Services is an employer of record focused on helping US and global businesses hire in Canada quickly and compliantly. We help you navigate changing employment laws all across the country.
Want to learn more about how we can help?
Contact us today!
