Hospital-Administered Drugs
Are you under the impression that all hospital-administered drugs are covered by your provincial healthcare plan? Most of us would answer this question with ‘yes.’ However, that may not be the case.
Some hospitals are now saying that a selection of drugs administered in a hospital but on an out-patient basis do not meet the current requirements under ‘hospital services.’ If this is true, these drugs would not be covered under the provincial plan. This has caused uproar in the insurance industry because individuals left holding an unpaid drug bill are turning to their group benefits plan for coverage. Insurers are continuing with their interpretation of the obligations of the provincial plan – all drugs administered in a hospital – whether in-patient or out-patient – are the responsibility of the hospital. As a result, insurers are declining such claims. This may leave your employee holding a drug bill, which they thought was an insured expense.
Many of the leading group insurers have banded together on this issue. The Ministry of Health will be advised of the insurers’ concerns. Once the ministry publishes their position on the payment of hospital-administered drugs, we will give you an update. In the meantime, if you encounter a problem with a claim, please give CBA a call and we will assist in getting the claim reimbursed.
A Reminder Regarding
CICA Section 3461
Impact on Retirement Non-Pension Benefits
If an employer provides life, health care, dental care or other non-pension benefits when an employee retires or terminates employment, the company must account for these costs on an accrual basis over the productive working lifetime of active employees.
In order to determine your exact reporting requirements, CBA’s actuarial department can prepare an analysis for you by calculating the potential future value of the benefits and amortized expenses in accordance with the provisions of your benefit program, following the CICA rules.
You can contact Cam MacNeish (Vice President, Group Pensions) or Rob Crofts (Vice President, Life & Health) if you have any questions about the requirements of CICA Section 3461.
Pension Clients Take Note!
Year-end is quickly approaching and if your plan has a December 31 anniversary there are a few things to keep in mind:
Ø Pension Adjustment calculations (due February 28, 2002)
Ø Pension Adjustment Reversal calculations (due January 31, 2002)
Ø Ontario Form 7 – Summary of Required Contributions (due February 28, 2002)
Ø Year-end processing, including the preparation of employer summary reports and member statements, will begin soon.
New Canada Pension Plan Rates!
Effective January 1, 2002, the Year’s Maximum Pensionable Earnings (YMPE) under the Canada Pension Plan will increase from $38,300 to $39,100. Employee and employer CPP contributions are based on employee earnings up to the YMPE.
The employee and employer contribution rates will increase from 4.3% to 4.7% of earnings effective January 1, 2002. Employees will contribute a maximum of $1,673.20 during 2002, with a matching employer contribution.
Based on the new YMPE levels, the maximum CPP retirement pension would be approximately $788 per month, assuming the pension begins at age 65.
Why Invest This 2001/2002 RRSP Season?
The market is volatile, the economy sluggish, and ironically enough, people tend to avoid investing when the market is down. Not only is this a great time to “buy” into the market, but Stock Markets can rebound quickly…often too quickly for investors to react.
REMEMBER: “The best time to invest is when it is extremely difficult to summon up the courage to so.” (Jim Slater, author)
Statement of Investment Policies and Procedures
In accordance with the Financial Services Commission of Ontario (FSCO) legislation, pension plan sponsors are to have a Statement of Investment Policies and Procedures (SIP&P) in place by January 1, 2001. The SIP&P is meant to be a helpful tool for plan sponsors. It provides a framework in the form of a set of policies and procedures directly related to managing your pension plan assets.
You are required by law to have a SIP&P in place. If you already do, good for you! You are complying with Ontario’s Bill 27. If you received a draft SIP&P from us or your carrier, but it hasn’t been finalized, it’s time to dust it off and contact us. We’ll help you put on the final touches, and you’ll be ready if FSCO requests to see it, or if your Actuary needs to work on your plan.
Regulations to fight Terrorism
If you are listed as pension plan administrator for an Ontario registered pension plan or a federally regulated pension plan, you will have received a letter from Financial Services Commission of Ontario (FSCO) or Office of the Superintendent of Financial Institutions (OSFI) recently.
The Government of Canada has enacted regulations that contain restrictions on dealing with assets owned or controlled by listed persons. The regulation requires disclosure to the Royal Canadian Mounted Police (RCMP) or Canadian Security Intelligence Service (CSIS). This list is available on the Internet at the following site: www.osfi-bsif.gc.ca.
The insurance carriers for your pension plans are federally regulated financial institutions and as such are required to report the results of their on-going review to OSFI on a monthly basis. They have confirmed they are in compliance with this requirement. If you have any questions, please call your CBA consultant.
