Hi everyone.
This is not a fun update. The Province of Alberta is shifting payment for some medication and other medical items to employers and employees. This change comes into force on October 1, 2026. Here is what you need to know…
Key Takeaways
- Changes take effect October 1, 2026.
- Employer benefit plans become the primary payer before provincial coverage.
- Many employees over age 65 will remain eligible for employer health benefits.
- Employers should prepare for increased benefit costs and possible premium increases.
Alberta Legislative Update: Bill 11
The Government of Alberta is introducing legislative updates to the Insurance Act through Bill 11. This bill will change how private benefit plans and provincial health programs interact. These changes affect both plan coordination of benefits and treatment of employees aged 65 and over.
What Is Changing?
- “Payor of Last Resort” Model: Under the new rules, the Alberta Provincial health plan will only pay expenses after all private insurance coverage has been exhausted. This means that for employees covered by both an employer-sponsored plan and a provincial program, such as Alberta Seniors or Non-Group Plans, the private employer plan must be billed first.
- Removal of Age Limits: Many groups that currently have an age limit for Extended Health Care (EHC) will be required to remove it, adding eligible active employees back onto the plan.
Impact on Employers
- Increased Costs: Shifting primary responsibility for drug and supplemental health claims from the province to private plans is expected to increase costs. Estimates suggest an average increase around 11% (plus cost of living) for the health portion of premiums.
- Variable Risk: Financial impact will vary based on employee demographics and actual claims. For example, if an employee is on a high-cost medication, that cost will now transfer to the employer’s plan.
- Plan Adjustments: Employers may need to amend plan terms to ensure compliance. Plans can still have standard eligibility requirements, such as a minimum number of hours worked per week, as long as they apply to all ages.
- Premium Hikes: When claim costs are transferred to employers, premiums for the plan are likely to increase. This may happen as early as October 1, 2026, or at the next plan renewal.
Impact on Employees
- Benefit Continuity: Active employees over 65 will maintain their health and drug coverage, as employers can no longer cut these benefits based on age alone.
- Potential New Out-of-Pocket Costs: Because private plans often have co-payments, such as 80% coverage, employees on expensive drugs might face higher out-of-pocket expenses than they did under provincial programs. For example, a $30,000 annual drug cost on an 80% plan could result in a $6,000 cost to the employee.
- Shared Premium Increases: In plans where employees share the cost of premiums, all plan members will see their monthly contributions rise due to the overall increase in claims costs.
Important Notes
Health Care Spending Accounts (HCSAs): These do not have to be exhausted before the province picks up expenses.
Out-of-Country Coverage: The requirement to remove age limits does not currently apply to out-of-country coverage, which can still vary or terminate by age.
Current Uncertainty
The province is still finalizing several aspects of implementation.
- Insurers are still finalizing administrative processes.
- How employees will be added back onto plans remains under review.
- Coordination between provincial and private plans is still unclear.
What Are We Doing About It?
- We have been watching and listening in order to get you informed.
- Naviguide is a founding member of the Smart Health Benefits Association. We are an intervenor at the governmental level to be able to speak for employers and employees. We have been in contact with the province. They are listening. Who knows if they will act and make suggested changes?
- We will meet with any of our clients who have businesses or employees in Alberta to discuss if plan changes can be or should be made. We have ideas. We are waiting for clarification from the province as to how certain aspects will function before we make final recommendations.
Questions about how Alberta Bill 11 may affect your business?
The Naviguide team is monitoring these legislative changes closely and can help you understand how they may affect your employee benefits plan.
Contact us today to discuss your options.
Jay Nadler / Ryan Corpuz and the team at Naviguide.
