Alberta to introduce significant changes for employer-sponsored health benefits

Alberta has passed significant reforms that will affect private employer-sponsored health benefits, including requiring private plans to become the primary payer for prescription drugs and certain supplemental health benefits and protecting older employees from the loss of employer-sponsored health benefits. The reforms are being brought into force on a phased basis throughout 2026, with key provisions scheduled to take effect on 1 October 2026.

Background

Bill 11, the Health Statutes Amendment Act, 2025 (No. 2), forms part of Alberta’s broader health system reforms aimed at reshaping the interaction between private and public health benefits.

Alberta's healthcare system has traditionally operated on a model under which certain provincial programs covering prescription drugs and other supplemental health benefits generally paid first, with private plans acting as the secondary payer. Bill 11 changes this approach by making private plans the primary payer, reflecting the Alberta government's objective of utilizing available private coverage before government-funded programs.

Key details

Private plans become primary payer for prescription drugs and certain supplemental health benefits

Where an individual has both public and private coverage, provincial plans such as Coverage for Seniors (opens a new window) for individuals aged 65 and older and Non-Group Coverage (opens a new window) for individuals under 65 have historically acted as the primary payer, with private plans coordinating benefits only after public coverage has been applied.

Bill 11 reverses this long-standing approach for such coverage and establishes a new coordination model. Effective 1 October 2026, private health plans will generally become the primary payer, with provincial plans acting as the payer of last resort. Benefits that are expected to be affected under the Coverage for Seniors and Non-Group Coverage plans include:

• Prescription drugs

• Ambulance services

• Clinical psychological services

• Home nursing care

• Chiropractic services

• Prosthetic and orthotic benefits

• Mastectomy prosthesis

• Hospital accommodation

Prohibition against age-based termination of health benefits

Currently, employers may terminate or reduce drug and health coverage when an employee turns 65, at which point the employee would rely on the provincial health plan.

Effective 1 October 2026, employers may no longer terminate or reduce prescription drug and supplemental health benefits based solely on an employee's age. Employers must continue providing these benefits for as long as the employee remains actively employed, regardless of age. This protection applies strictly to health benefits. However, Bill 11 does not prohibit employers from imposing age-based limits on dental, life, disability, or travel coverage.

Employer action: Prepare to Act

Employers should begin reviewing the structure of their Alberta drug plans to understand how the shift in payer responsibility may affect plan costs and design. Particular attention should be given to high-cost drug exposure, coordination of benefits provisions, and existing eligibility rules for active employees aged 65 and older. Existing plan documents, employment agreements, and benefits policies that include age-based termination provisions will need to be reviewed and updated for compliance.

Employers are likely to see the greatest impact where they have a higher proportion of Alberta-based employees aged 65 and older.

Insurers are currently reviewing the impact of the reforms and preparing system changes ahead of the anticipated implementation. As further regulatory guidance is expected from the Alberta government, employers should continue to monitor updates from insurers and advisors and prepare for potential plan design adjustments in advance of the changes taking effect.

Written in collaboration with:

Patrick Malloy

BFL CANADA Benefits (Lockton Global Partner)

pmalloy@bflcanada.ca (opens a new window)

Further Information

Supporting a world-class health care system | Alberta.ca (opens a new window)

Health Statutes Amendment Act, 2025 (No. 2) | Legislative Assembly of Alberta (opens a new window)