How Alberta’s Bill 11 Will Affect Employer-Sponsored Benefits

Last fall, Alberta introduced landmark legislation that signals one of the most significant overhauls of the province’s health care system in quite some time. Formally titled the Health Statutes Amendment Act, 2025 (No. 2), but more commonly referred to as Alberta’s Bill 11, this bill reshapes how health services are funded and delivered across the province.

While it will have wide sweeping impacts to many parts of the government health plan, such as physician services, and outpatient surgery, some of the announced changes will have important implications for employers, particularly those sponsoring group benefits plans for Alberta-based employees.

Here are the details on the upcoming Bill 11, how they’re set to impact group benefits plans, as well as how to manage them effectively.

Understanding Bill 11

As Bill 11 is expected to take effect later in 2026, plan sponsors have a critical window to understand what’s coming, assess the potential financial impact, and prepare their benefit strategies accordingly.

For plan sponsors with members in Alberta, we’ve summarized the three key aspects of Bill 11 and how they will influence employer-sponsored benefits plans.

Age-Based Termination of Benefits

Currently, an employer’s group benefit plan is permitted to terminate or reduce drug and health coverage when an employee turns 65 years old, which means the plan member would then rely on the Alberta health plan.

When Bill 11 comes into effect, however, employers will no longer be allowed to terminate or reduce coverage solely because an active employee turns 65 years old. Instead, they must continue the group benefit plan coverage for as long as the employee remains employed with the company.

Drugs & Supplemental Health Benefits

At present, the Alberta health plan is the first payor for individuals aged 65+, both active employees and retirees, and the employer-sponsored plan is the second payor. Once Bill 11 is effective, this switches. Thus, the employer-sponsored plan will become the first payor, and the provincial plan will be the payor of last resort for drug and supplemental health benefits.

Physician & Medically Necessary Services Coverage

Right now, employer-sponsored plans generally don’t cover publicly insured physician services, allowing provincial plans to handle these costs. The employer plans would only fill in the non-insured gaps in coverage.

However, with Bill 11, some of the medically necessary physician costs will move to private insurers. This means that employer-sponsored plans may now be billed first for services formerly covered by the provincial plan. Examples of some of these costs include the following:

• Physician visits
• Diagnostic tests (e.g., lab work, MRIs, X-rays, and ultrasounds)
• Some physician-performed treatments

Key impacts for employer-sponsored benefits plans

The upcoming implementation of Bill 11 and its changes will, of course, have lasting impacts for employers and their benefits plans. Most of the impacts will be seen in cost increases. For instance, as the cost of drugs and other health treatments will shift onto employer-sponsored benefits plans for members over age 65, there is likely to be noticeable cost increases to the benefits plans themselves.

There is also likely to be increases to stop loss and high amount healthcare pooling rates by insurance companies, as drug and health claims are shifting away from the provincial plan and over to employer-sponsored benefits plans. Finally, for employers who also offer drug and health coverage to their retirees, there is likely to be an impact to the other post-retirement benefits (OPRB) obligation.

The precise impacts and cost increases, however, will vary from employer to employer. This is because actual cost estimates are based on a company’s number of employees, the number of active employees over age 65, as well as the availability of employer-sponsored retiree health benefits.

Managing the impact of Bill 11

As there is much that remains unknown about the specific impacts of Bill 11, plan sponsors currently have an opportunity to take proactive steps in mitigating the cost increases expected from the upcoming changes.

Some of the key mitigation strategies to consider include the following:

• Review drug plan design: To better control rising drug costs, employers may wish to consider changing to a managed formulary or introduce annual or lifetime maximums.
• Implement specialty drug management strategies: As specialty drugs are a significant cost drive, exploring targeted management approaches can help manage high-cost claims. One such approach is to use biosimilars where appropriate.
• Reassess reimbursement levels: Adjusting reimbursement levels, even for certain services, can help offset increased costs while still maintaining reasonable coverage for plan members.
• Audit current benefits plan: Reviewing the current benefits plan, specifically elements such as eligibility rules, utilization, health trends, and spending patterns, can help identify potential opportunities to better align coverage with employee needs.
• Strengthen wellness management programs: Enhancing wellness management programs, and ensuring they align with claims utilization and spend, can help support improved health outcomes and mitigate long-term claims costs.
• Explore alternate funding and stop loss arrangements: Evaluating alternative arrangements for stop loss and funding options can help manage risk as the Bill 11 changes take effect.

Preparing your benefits plan for Alberta’s Bill 11

Alberta’s Bill 11 will have significant impacts on employer-sponsored group benefit plans, especially for organizations with employees who have reached age 65. With increased costs and shifting plan responsibilities on the horizon, early planning is essential. Now is the time to connect with a Cowan Benefits Ltd.® consultant to review your plan, understand potential financial impacts, and prepare for the transition ahead.