As a Mainstay Insurance client you know that we do NOT allow independent contractors to be included on benefit plans.  There are a number of reasons for this.  CRA does not allow non-employees, most insurers will not change contract wording to include non-permanent employees, and most importantly, there is considerable liability created for both the the employer and employee if they are deemed as such.  We never want the benefit plan to be the “final nail in the coffin” that redefines an independent contractor as an employee.

In Ontario (as of Jan.1, 2023), things are getting a bit messier, but maybe also a bit clearer at the same time.  If you work with business or information technology consultants, then please read the info below and reach out to your HR or employment lawyers if you have questions.

On January 1, 2023, an amendment to the Ontario Employment Standards Act, 2000 (“ESA”) came into force that creates a new exemption for business and information technology (IT) consultants.¹ This means that if an individual meets the criteria for a “business consultant” or “information technology consultant” under the ESA, then the consultant is excluded from the application of the ESA. If that is the case, then the employer does not have to comply with the minimum employment standards set out in the ESA with respect to the consultant.

Employers should consider whether this new exemption applies to any individuals in their Ontario workforce. In addition, it is also a good reminder for employers to consider whether they are up to date on key exemptions from employment standards legislation in all of the provinces and territories in which their business operates, as the exemptions do vary by province and territory.

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Here are some of the recent changes, and others coming in the near future.  Though not directly benefit related, it is a good checklist to reference and ensure you are on-side with.  Any questions, reach out to your employment lawyer or applicable professional.

Effective January 1, 2023, private companies incorporated in Ontario must establish and maintain a Register of individuals with significant control (“ISCs”)

Effective December 18, 2022, Employment Insurance (“EI”) sickness benefits were extended permanently from 15 weeks to 26 weeks.

Effective June 1, 2023, Ontario’s Occupational Health and Safety Act (“OHSA”) has been amended to require that certain employers provide and maintain a naloxone kit in workplaces

Ontario employers can no longer enter into non-competition agreements

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Near the end of December, I shared the Ontario Dental Fee guide increases and at that time, we were still waiting to hear on the other provinces and their adjustments for 2023.  They are now out and the averages are included below.

In addition to the fee guide increase, employers also have trend and utilization drivers to cost (using more of the services, and using them more often, in addition to paying more for the same service). We are seeing these costs show up (already) with the first months dental claims being higher than normal, and do not anticipate that abating.

On the drug side of things, costs are continuing to stay stable, but having an employee with one of the nearly 200 high cost drugs (over $10,000 a year), can have a huge affect on renewal pricing (but we have solutions).  A post in Pension and Benefits Monitor Magazine today stated…

Prescription drug expenditures by Canadian public drug plans increased by 4.2 per cent in 2020/21, bringing annual spending to $12.3 billion, says a Patented Medicine Prices Review Board (PMPRB) report. The use of higher-cost medicines has been the primary factor behind rising costs for public plans over the past five years and this pressure continues to build, it says, as in 2020/21 high-cost drugs accounted for over one third of total drug costs and yet were only used by 2.5 per cent of drug plan beneficiaries. The 10 highest-cost drugs reimbursed by the public drug plans were all rare disease treatments with annual treatment costs of over $200,000.

Put together the dental and drug inflation, trends and utilization increases and we expect to see larger than average renewal rates in the next few years.

As always, we share our numbers HERE.

If you’re in the IT or Business Consulting space you need to be aware of these changes

It may actually mean now is the time to make some of those contractors into employees, rather than just having them treated that way by the Ontario Employment Standards Act (ESA).

Each year the various provincial dental associations set the suggested dental fee guide for the coming year.  Most dentists follow this guide to charge for the regular work they perform (there are also specialists guides and orthodontics are different again).  Most insurers also use them as a guide for ensuring a fair amount is paid (like a reasonable and customary (R&C) table) for the reimbursement of dental claims.

2023 is looking to be the highest increase I’ve seen in my 26 years in the business.  This is likely in response to the higher costs incurred during the pandemic and the recent jumps in the inflation rate.  So far, we’ve heard from Ontario with an increase of 8.5%, Quebec at 9.8%, Manitoba 5.25%, PEI 5.77%, Saskatchewan 5.62%, and Alberta with 6.0%.

On top of the fee guide adjustment, which increases the cost for the service, we are also seeing increases in trend (coming back more often) and utilization (sitting in the chair for longer).  Together these will mean dental costs will increase by about 10% if you are an AVERAGE user.  Plans facing their first year renewal (with a new plan) will often see much higher increases as employees get work done that had been put off until the plan was put in place.

The ODA Suggested Fee Guide

Ontario dental fees may also be influenced by the ODA’s annual Suggested Fee Guide. The Guide lists every dental service that dentists may perform. It also outlines dental codes and suggested fees for each specific service. Both dentists and dental plan providers may use the Guide as a reference point to help inform service fees.

Dentists are not required to follow the Guide or any fee schedule. They set their own fees based on the factors influencing their individual practice. This means that your dentist’s fees may vary both above and below the Guide. 

Many dental plan carriers will base their plan coverage on fees and codes within the Guide. In some cases, the coverage may be based on previous years’ Guides (going back a year or more). Dental plan providers do not work with the ODA to develop the Guide.

Dental Costs Explained

The Globe and Mail has reported that Ontario is prepared to implement a biologic and biosimilar mandatory switching policy following leaders like British Columbia, New Brunswick, Alberta, Saskatchewan and PEI.  The new strategy is expected to take place on March 31, 2023 and phase in over the year. 

So what does this mean to you and your employees?  Biosimilars are similar (but not the same) as generic drugs and have a reduced cost compared to the Biologic drug they replace.  The costs of the drugs themselves are in the tens of thousands of dollars a year, so the savings can be significant and anywhere from 17 to 50% off the comparator drug.   

Once this program goes into place, those that use the Ontario Drug Benefit plan (ODB), such as; seniors, those on Ontario Works, or the Trillium Drug Benefit will be made to switch to the cheaper biosimilar drug (unless there is a medical reason not to). Most employee benefit plans will mirror that change (Green Shields has been for years already), requiring the employee to change.  This will help control the costs paid by the employer (and often shared with the employee).  Expect to see more on this in the coming year.

“Under the new policy, there will be a nine-month transition period that is set to start March 31. That will allow patients time to have discussions with their care providers about what the changes mean, as well as their options. Certain patients will be exempt from mandatory switching, such as those who are pregnant and people with certain types of cancer, the government official said.”

https://www.theglobeandmail.com/canada/article-ontario-mandatory-drug-swap-generic/

I got this article (below) that acted as a reminder of Ontario employer obligations under the updated OHSA regulations  I’ve include the article and the provincial site providing more detail and locations where you can get your free kit (most pharmacies).

Does your workplace have a naloxone kit? Are you legally required to have one?

In light of the opioid crisis, the Ontario government passed Bill 88, Working for Workers Act, 2022 ( Act ), which amended, among other things, the OHSA to prescribe the inclusion of naloxone kits in select workplaces.

The OHSA now requires an employer who becomes aware, or ought reasonably to be aware, that there may be a risk of a worker having an opioid overdose at the workplace to provide and maintain a naloxone kit in the workplace.

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Naloxone can temporarily reverse an opioid overdose. Learn how to recognize an opioid overdose and use naloxone to reverse it.

https://www.ontario.ca/page/get-naloxone-kits-free