My opinion: The Chamber of Commerce Group Insurance Plan

The largest group insurance plan of its kind in Canada, the chamber of commerce has a huge number of member groups. While the plan has been very successful it has some serious drawbacks.

The chamber plan is a fully pooled plan, this means that all groups pay premium into one big pool. All claims are paid out of the same pool. Claims experience is not tracked on a per group basis. If the level of the pool drops due to high claims, everyone get the same rate increase regardless of their own claims.

Because of this pooling groups with low claims are paying the same rates as groups with high claims. The low claiming groups are in fact subsidizing the claims of the unhealthy groups. This is common knowledge in the benefits world but rarely known by the average person. I have in the past made a recommendation for a group with abnormally high claims to consider the switch to the Chamber plan as their premiums would be lower thanks to being subsidized by the group. For this reason the chamber plan has become a dumping ground for groups with bad claims experience.

Groups with low claims and good experience never know they are paying too much because they receive no record of their claims and they have no way of knowing which end of the stick they are getting.

Another major drawback of the chamber plan is the prescription drug plan. The chamber uses what is known as the NAT formulary. A formulary is a list of drugs that are or are not covered under the plan. In the case of the NAT formulary, almost nothing is covered. In fact the NAT formulary is one of, if not the most restrictive formularies around. Under the NAT formulary most medical conditions only have one eligible drug. Most plans provide a wide array of medications for each specific medical condition, this allows the patient and their physician choice in selecting the medication that is best. Some drugs are more expensive than others, but they typically have benefits the cheaper drug does not possess. Under the NAT formulary only the cheapest drugs are covered, even if they have dramatic side effects. If your doctor prescribes a certain medication not covered by the NAT formulary the pharmacist can either offer to replace it with the covered drug or you only receive reimbursement for the amount of the cheaper drug. Sometimes this can cost the patient considerable amounts of money to purchase the drug their doctor recommends as well as considerable mental anguish by placing the patient in a position where they must choose between their wallet and their health.

Flexibility is another area the chamber plan lacks. Multiple plan designs are available for each benefit, but if your needs are not reflected in the existing plans you are out of luck. The chamber cannot accommodate small or specific plan design changes; they can only paint in broad strokes.

The chamber isn’t all bad mind you, their premiums tend to be pretty stable due to the large size of the pool, even with the dumping ground effect. Their price is also pretty low due to the severe limits imposed by plan designs such as the NAT formulary. The chamber group insurance plan also will provide benefits for a single person, where most other insurance companies require at least three people. The chamber plan is a good place for small new businesses to get their feet wet in the employee benefits plan world, however, once a group has a few years under their belt, or grows to more than a handful of employee’s there is a far bigger far better and brighter world of benefits out there beyond the chamber plan.