Design Tips

Drug Coverage in Quebec (Benefit Tips ® - © 1996)


Effective January 1, 1997, all Quebec residence with Medicare must be covered by a drug plan. Those not covered through a private group plan must be covered through the public plan provided by RAMQ with premiums collected along with provincial income tax.

All employers that provide accident, sickness or disability benefits must also provide drug coverage as outlined below:

  • covering all drugs listed on the Quebec Government Drug plan at prices negotiated by the Quebec Government,
  • provide at least 75% reimbursement of eligible expenses (maximum 25% co-insurance),
  • have an annual deductible of $100 or less per individual,
  • limit member's annual out-of-pocket expenses (co-insurance and deductible) to $750 from all sources,
  • cover all eligible plan members regardless of age, health status,
  • participation is compulsory for all eligible plan members not covered elsewhere,
  • any eligibility waiting period must be waived for drug benefits.


Quebec severely restricts the ability of plan sponsors to manage the cost of the major component of medical benefits.

  • Formulary management and claim maximums are not permitted for residences of Quebec.
  • Defined contribution health plan (health spending account) is not permitted for residences of Quebec.
  • Quebec residences are not permitted to participate in other benefits unless they are provided the drug coverage mandated by RAMQ.
  • Individual drug coverage that replaces RAMQ is prohibited.


It is your choice whether to give your Quebec staff the plan that their politicians have designed or not. Unfortunately, they have raised the stakes to an all-or-nothing gambit. Even though RAMQ does not have the time to verify that employers are complying with the law it is best not to risk non-compliance.

  • Exclude Quebec staff from the benefits plan and pay them an amount in lieu of benefits.
  • Create a special medical plan for Quebec staff, if you have 2 or more employees.
  • Modify your national plan to comply with RAMQ.

Cash vs. Savings (Benefit Tips ® - © 2002)

Cash is such a powerful motivator that many employers reward their staff with performance bonuses. However, in some situations, benefits can achieve better results at a lower cost.

Let’s look at why an employer might decide to reward employees with contribution to a Deferred Profit Sharing Plan (DPSP) instead of cash bonus.

Saving for retirement helps satisfy the employee’s need for financial security, and accumulating wealth helps satisfy the employee’s need for self-esteem. Meeting these employee needs can help attract and motivate staff. Some companies are employers of choice because of their DPSP. Their staff have financial security as well as bragging rights.

Furthermore, up to 19% in payroll taxes are avoided. Employees could save Employment Insurance (2.2%) and Canada Pension Plan premiums (4.7%) while the employer could save Health Tax (1.95%), Employment Insurance (3.08%), Canada Pension Plan (4.7%) and WSIB (2.13%) premiums.

Since bonuses place in a DPSP are used to achieve long-term objectives rather than immediate needs, staff are insulated from fluctuations in bonus payments. While this cushions the consequences of under-performance, it also provides freedom to accurately reflect performance.