In
the February 2008 budget, the federal government
provided clarification to the Medical Expense Tax
Credit (METC) provisions relating to the eligibility
of drugs and medicine. They advised that drugs which
may be purchased without a prescription (e.g.,
over-the-counter medications) are not classified as
eligible medical expenses under the Income Tax Act.
A drug will only be considered an eligible benefit
and non-taxable if:
it is manufactured, sold or represented for use
in the diagnosis, treatment or prevention of a
disease, disorder or abnormal physical state, or
its symptoms, or in restoring, correcting or
modifying an organic function,
it can lawfully be acquired for use by the
patient only if prescribed by a medical
practitioner, and
the purchase is recorded by a pharmacist.
How does this impact group benefits plans
Many Insurer's all member companies of the CLHIA,
are working with the Canadian Life and Health
Insurance Association (CLHIA) to get confirmation
from the Department of Finance as to whether Private
Health Services Plans (PHSPs) are exempt from the
METC provision change. Until that time, claims for
over-the-counter (OTC) and/or non-prescription
requiring drugs will continue to be paid under those
drug plans which offer this benefit.
In addition, Insurer's are working with the CLHIA,
and other industry and government stakeholders, to
advocate for the expansion of the list of drug
exceptions to include certain products deemed
essential for the health of Canadians (e.g.,
nitroglycerin and vaccines).
