Bill 11 & your Employee Benefit Plan
Alberta’s Drug Coverage Shift: Why Employers With Benefit Plans Can’t Afford to Sit Back
Introduced late last year, Alberta’s Health Statutes Amendment Act, 2025 (Bill 11) signals a fundamental shift in how prescription drug coverage may be funded in this province - and the implications for employer-sponsored benefit plans are significant.
The proposed legislation moves Alberta to a “payor of last resort” model. In practical terms, this means that private insurance plans and employer benefit programs would become the first line of coverage for prescription drugs, with public programs stepping in only after private coverage is exhausted.
For employers offering group benefits, this is not a minor policy adjustment. It represents a material transfer of cost and risk from the public system to the private sector.
What the Bill Could Require Employers to Do
Beyond the payor-of-last-resort change, Bill 11 includes provisions that would:
Require employers to maintain prescription drug coverage for employees aged 65 and older who remain actively at work
Prohibit employers from reducing, cancelling, or denying coverage based solely on age
While the provincial government has suggested these measures could save $35–$54 million annually, those savings would largely be achieved by shifting financial responsibility to employers and their benefit plans.
Why This Matters - Especially for Small Employers
For large organizations, increased drug costs may be absorbed through scale, reserves, or plan redesign over time.
For small and mid-sized businesses - particularly those with fewer than 49 employees - the impact could be severe. Early industry discussions suggest potential premium and cost increases ranging anywhere from 50% to 250%, depending on plan design, workforce demographics, and claims experience.
That kind of volatility doesn’t just affect budgets. It can force difficult decisions about:
Plan sustainability
Employee contributions
Coverage reductions
Long-term benefit strategy
Waiting to see what happens may leave employers reacting after costs have already escalated.
What We Know—and What We Don’t
Alberta’s Minister of Health, Adriana Grange, along with Primary and Preventative Health Services (PPHS), has confirmed that consultations are underway with industry stakeholders, including the Canadian Health Insurance Association. These discussions are focused on implementation, transition planning, and communication requirements.
However, there is still limited clarity on how smaller employers - who make up the majority of Alberta businesses - will be protected or accommodated under these changes.
If you have concerns, contacting your local MLA to ask how this legislation could affect your business and employees is a reasonable step. But political engagement alone will not address the practical, financial consequences to your benefit plan.
The Real Question Employers Should Be Asking Now
If you sponsor an employee benefit plan, the most important question is not whether Bill 11 will affect you - but how prepared your plan is to absorb the impact if it does.
That’s a conversation every employer should be having now with their benefits advisor, including:
How exposed is our current plan design to a payor-of-last-resort model?
What cost pressures might realistically show up at renewal?
Are there alternative plan structures or mitigation strategies we should be reviewing before changes take effect?
What decisions may be forced on us if we wait too long?
Don’t Wait Until the Costs Are Locked In
These changes could take effect as early as this summer. By the time renewals or claims experience reflect the new reality, options may be limited.
We are actively working with insurers and third-party administrators to understand potential responses, alternative plan designs, and mitigation strategies - but what matters most is how this applies to your specific plan and workforce.
If you offer employee benefits in Alberta, now is the time to speak with your benefits advisor and ask them directly:
“What should we be doing now to ensure these proposed public system changes have the least possible impact on our employee benefits?”
If you would like to discuss how these developments may affect your plan specifically, please reach out. We will continue to monitor this legislation closely and share updates as more details emerge - but proactive planning today will always be less costly than reactive decisions tomorrow.