Regulation and Policy Setting

Extended health care (EHC) insurance is paid and administered by the life and health insurance industry. There are more than 160 life and health insurers and third-party administrators operating in Canada, 99 per cent of which are represented by a trade association called the Canada Life and Health Insurance Association (CLHIA).^[1]

The life and health insurance industry is regulated at national and provincial levels. Federally, the Office of the Superintendent of Financial Institutions (OSFI) is responsible for prudential regulation. This means it’s responsible for ensuring the overall financial stability of the system by regulating the cash reserves insurance companies must have on hand to meet their contractual obligations to insured parties, among other things. In Ontario, the Financial Services Regulatory Authority (FSRA formerly FSCO) regulates the commercial conduct of the industry and its agents, with a core focus on consumer protection.

While the life and health insurance industry is regulated in those key areas, insurers are free to set their own policies for how benefits claims will be adjudicated and to establish the terms of contracts with employers (plan sponsors). These policies will dictate what a particular plan will and will not cover, and any terms and conditions tied to that coverage.

Insurance providers and benefits administrators make decisions pertaining to whether a benefit will be paid, as well as whether a benefit is subject to conditions (such as Orthotics Pre-approval) or limitations (such as annual and per profession limits and Reasonable and Customary fees) based on the language of the contract.

Compliance with the College of Chiropractors of Ontario (CCO) standards and Guidelines is a baseline, or minimum requirement, and not an ultimate guarantee of insurability of a provider’s services. Insurers may also choose to set additional requirements for continued status as an eligible provider. If a provider is found to be in violation of these policies, insurers may decide to pursue disciplinary action against that provider. In extreme cases, this may include a lifetime delisting for you as a chiropractor and potentially your entire clinic.

Insurers may also choose to file a complaint with CCO. For this reason, we encourage you to take a proactive stance in keeping up to date with insurers’ policies.

You can find more information about this topic in the Key Trends section and in the Benefits Fraud and Abuse section.

Types of Benefit Plans

Employers (plan sponsors) purchase EHC coverage from life and health insurance providers on behalf of their unionized or non-unionized employees (plan members). There are three main ways that employers provide health care benefits to employees: through traditional benefits plans, flexible (flex) plans, and spending accounts, such as Health Spending Accounts (HSA)s and personal spending accounts (PSA)s.

Traditional Benefits Plans

A traditional benefits plan offers a standard bundle of coverage to a group of employees, regardless of the demographic makeup of that group. Typically, these plans will include coverage for specified professional health services (e.g. chiropractic, physiotherapy, registered massage therapy), as well as dental care and prescription drugs.

Flex Plans

Flex plans allow employees to select coverage levels that are suited to their needs by allocating coverage credits to different areas of the plan. Flex plans have emerged in response to the recognition that today’s workforce is characterized by a high level of demographic diversity, and that employees’ needs change over time. While traditional plans are by far the most common, flex plans are gaining popularity, especially among large employers.

According to the 2020 Sanofi Canada Health Care Survey, 71 percent of plan sponsors report having a traditional plan, and 29 per cent have a flex plan, which is up from 20 per cent in 2017.

Health Spending Accounts

HSAs and PSAs are additional ways in which employers can offer flexibility to employees. In this arrangement, the insurer administers an account with a sum of money provided by the employer, which the employee can spend on specified goods or services. Eligible expenses under an HSA are often defined as those that qualify for the Canada Revenue Agency Medical expense tax credit.

PSAs may come with fewer or different restrictions. These accounts may be offered to employees in addition to traditional benefit plans as a means of adding a degree of individual choice and customization onto a standard benefits bundle.

Coverage Levels and Premiums

Typically, employers negotiate contracts with insurers through third-party intermediaries (e.g. insurance brokerages). Benefit levels will depend on factors such as the employers’ priorities for coverage and what they are willing or able to pay, as well as the nature of the coverage included in benefits packages offered by the insurance provider. For example, insurance companies view reasonable and customary (R&C) fees as proprietary information, so benefits packages have different R&C levels for chiropractic care (and other services) depending on the insurer.

Likewise, the premiums insurers charge depend on many factors. These include the nature and extent of coverage, employee (Plan member) demographics (e.g. age, gender), the type of work that employees do and “experience rating.” Experience rating takes into account both past benefits usage, as well as the consistency or predictability of that usage.

Contract and Benefit Variations

Insurance contracts can vary substantially, not only between insurance carriers but also across different contracts held by the same carrier with different employers. Furthermore, an employer may purchase different kinds of benefits packages for different groups of employees, depending on the nature of the work they do, whether they are full-time employees, part-time employees, members of management or executives.

Because of this level of diversity and changeability, we strongly recommend that you emphasize to your patients the importance of them understanding the specific details of their own benefits package.

For more details, including our Patients’ Extended Health Care Coverage Checklist, please visit  Working with Patients and their Extended Health Care Insurance Providers.