Alberta’s incoming changes to healthcare legislation will have important implications for employers, particularly those sponsoring group benefits plans for Alberta-based employees. Here is what you need to know.

Health Statutes Amendment Act, 2025 (No. 2)

The Health Statutes Amendment Act, 2025 (No. 2), more commonly referred to as Bill 11, was introduced by the Government of Alberta in late October 2025. Bill 11 will affect employer-sponsored benefit plans in three key areas:

1) Age-based termination of benefits;

2) Drugs and supplemental health benefits; and

3) Physician and medically necessary services coverage.

These aspects of Bill 11 are expected to take effect later in 2026, meaning that employers have a critical window to understand these changes, assess potential costs, and prepare their benefit strategies accordingly. Each area is summarized below.

Age-Based Termination of 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. Under Bill 11, this will no longer be permitted. Employers must continue prescription drug and supplemental health benefits for as long as the employee remains actively employed, regardless of age. This means that existing plan documents, employment agreements, and benefits policies that reference age-based termination will need to be reviewed and updated for compliance.

Drugs & Supplemental Health Benefits

Currently, provincial plans such as the Alberta Seniors Drug Plan (for individuals over 65) or the Non-Group Alberta Blue Cross Drug Plan (for individuals under 65) pay first for drug and supplemental health benefits, with employer-sponsored plans paying second. Bill 11 reverses this order: employer-sponsored plans will become the first payor, with provincial plans covering any remainder as the “payer of last resort”. This is a first-of-its-kind policy shift in Canada.

Physician & Medically Necessary Services Coverage

Employer-sponsored plans generally do not cover publicly insured physician services today – provincial plans handle those costs. Under Bill 11, some medically necessary physician costs will shift to private insurers, meaning employer-sponsored plans may be billed first for services such as:

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

What is Not Required

Bill 11 does not mandate minimum coverage requirements for private health plans and does not require employers to continue or cover the following for active employees over 65:

• Life insurance
• Disability insurance
• Dental coverage
• Travel insurance

Key Takeaways for Employers

Bill 11 represents a meaningful shift of certain healthcare costs from the provincial system onto private employer-sponsored plans. The financial impact will depend on workforce demographics (particularly the number of active employees over age 65) and current plan design. Employers may experience premium increases at their next renewal cycle and should begin planning now to manage the transition. Key steps include:

• Review plan design – assess co-pay structures and coverage tiers to identify where cost exposure will increase under the new framework and identify gaps, redundancies and opportunities for optimization
• Reassess reimbursement levels
• Implement specialty drug management strategies – high-cost specialty drugs represent a significant portion of plan spending
• Strengthen wellness management programs, employee assistance programs, and preventative health initiatives to reduce long-term costs
• Explore alternate funding and stop loss arrangements that may provide greater flexibility and cost predictability
• Review employment contracts and policies to ensure compliance with Bill 11’s prohibition on age-based benefit reductions for active employees
• Engage your benefits advisor and insurer early through proactive discussions about anticipated cost modelling, plan redesign options, and renewal strategy before the changes take effect

Employers with Alberta-based employees should treat Bill 11 as a catalyst for a broader benefits strategy and compliance review. The legislative changes are significant and the window to prepare is narrow. Proactive, cross-functional planning between HR, legal, and finance will position organizations to manage the changes effectively while maintaining competitive benefit offerings for employees.

If you have any questions regarding this update, please contact any member of the Mathews Dinsdale & Clark team.

Prepared with the assistance of Mathews Dinsdale Articling Student, Keira Ostrosser.