You are currently browsing the daily archive for March 24, 2008.
The recent federal budget got the whole Canadian insurance world up in a tizzy. While most people did not notice the entry, everyone in the benefits consulting and insurance world started freaking out over one paragraph. It wasn’t in the budget speech. Rather, it sat in the bowels of the 416 page budget details document. So what could have gotten everyone so upset? Well, on Page 282, Appendix 4, the following was documented…
Budget 2008 also proposes to clarify the METC provisions regarding the eligibility of drugs and medications.
Currently, drugs, medications and other preparations are eligible for the METC when they are both prescribed by a recognized medical practitioner (or a dentist) and recorded by a pharmacist. These two requirements are intended to ensure that only costs for substances not generally available to the public and required for medical reasons receive tax relief. However, recent court decisions have interpreted this measure to include, in some cases, the cost of vitamins, supplements and drugs that could otherwise be purchased without a prescription. Such an interpretation goes beyond the policy intent of the METC.
Budget 2008 therefore proposes to clarify the wording for eligible drugs and medications to ensure that those that may be purchased without a prescription remain ineligible.
Holy Cow Batman! Do you mean that I cannot claim Flintstone Vitamins from my HSA? I actually need to have a prescription from a doctor and actually see the pharmacist to get something a little more legitimate? What could the insurers and consultants be so upset about?
Well, they believe that this wording will eliminate ALL over the counter prescriptions. This is because there is a disconnect on what the government is trying to achieve and what the consultants and insurers understand as “the realm of their industry”. The goal here is to stop sole-proprietors from buying over-the-counter (OTC) vitamins then claiming them as eligible expenses on the METC. The consultants and insurers are assuming that the wording will eliminate over the counter drugs completely and not what the federal budget suggests “Items without a prescription”. There is a difference.
Yes, this may have some implications on certain health benefit plans and coverage. But certainly not anything to be too concerned with here. You can always assume that the CRA will look at each case with what is the best interest of CRA and whether the taxpayer (individual or corporate) acted in good faith given their interpretation of the rules. After all, they are not all evil monsters out to tax you to death. The problem here is that the wording regarding OTC drugs and the METC has been grey for far too long and has caused multiple headaches for sole-proprietors and CRA. So they want to clarify the rules.
Let’s just see what they come up with before everyone starts claiming that the sky is falling. PS – If you do get hit on the head be sure to see your Doctor first if you need some form of pain reliever – just to be safe!
Some more help on finding the right HSA for you in my series on items you should look for when choosing an HSA provider…
Privacy
The protection of personal information is a major issue in Canada, especially when it comes to group health plans. We have had rules in Canada protecting individual privacy for a few years now, but unfortunately, some people still don’t get it.
The Personal Information Protection and Electronic Documents Act (also known as PIPEDA or the PIPED Act) is a law relating to data privacy. It governs how private-sector organizations collect, use and disclose personal information in the course of commercial business. In addition, the Act contains various provisions regarding the use of electronic documents. PIPEDA was passed in the late 1990s to promote consumer trust in electronic commerce and since then, most companies have created internal teams and processes to ensure they comply. Last week, however, I heard a story I just needed to share with you as a buyer beware.
A client of Benecaid wanted to have detailed information on their company’s HSA program, specifically the remaining balances on file and a summary of the claims to date. As the Chief Privacy Officer, the request came to me. I explained to the client that we could not give them the balances of the trusts established for each employee as it was not owned by the employer. Once the funds were deposited, it became the property of the employee and the claims and balance of the account was considered private information. The client was surprised as the last provider they had for their HSA program used to provide detailed claims information by employee.
“Excuse Me?” That was my response. You see, the client’s previous HSA had been set up as a cost-plus arrangement and claims were paid as incurred. The old HSA provider not only adjudicated the claims, but would clearly list the claims and their costs along with the employee for the employer. Given the serious nature of revealing claims information to employers since the inception of PIPEDA, I find it hard to believe that a responsible HSA provider would share this information. However, I wanted to let everyone know that if you have access to your employee claim information currently, you need to stop accessing it immediately – especially if you do not have expressed written consent from the employees. If you have an HSA set-up in the form of a Health and Welfare Trust, then the issue can be even more serious as you do not have access to these accounts as an employer. They are owned by the employee once funds are deposited and you cannot request a report on claims. It would be similar to you asking for a copy of their personal bank transactions a day after payroll.
If you currently have an HSA program and your provider allows you to see detailed information on claims for each employee, you should ask them to verify if this is allowed.. If they are unfamiliar with PIPEDA and the rules for accessing and sharing personal information….buyer beware!!
