BRITISH COLUMBIA PHARMACARE PROGRAM CHANGES EFFECTIVE MAY 1, 2003

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1 LEGISLATION UPDATE BRITISH COLUMBIA PHARMACARE PROGRAM CHANGES EFFECTIVE MAY 1, 2003 The Government of British Columbia has announced major changes to the provincial PharmaCare program effective May 1, The current Universal (Plan E) which provides coverage for most residents under age 65 and the Seniors (Plan A) which provides coverage for most residents who are 65 years or older are being combined into the new Fair PharmaCare program effective May 1, What are the major changes? New income based program The new Fair PharmaCare program assists individuals and families to pay for eligible prescription drugs based on their net income. The net individual or family income will determine the applicable individual or family deductible levels. Prior to May 1, 2003, the deductibles under the Universal Plan and Seniors Plan were not income related. Under the Fair PharmaCare program, once total expenses for eligible drug costs reach the first annual deductible, subsequent eligible drug prescriptions will be paid at 70%; payment increases to 100% of costs when the total out-of-pocket costs of eligible drugs reaches the second annual deductible. A Seniors Fair PharmaCare program will be available for seniors age 65 or older on May 1, 2003, and for seniors who will turn age 65 on or before December 31, Details of the programs are provided on page 3. Required registration To receive the financial assistance under the Fair Care PharmaCare program, a BC resident enrolled with the provincial Medical Services Plan should register before May 1, A resident can register by Internet, phone or mail. For registration, it is also required to sign and send a consent form. This will allow PharmaCare to verify the individual and family net income with the Canada Customs and Revenue Agency and confirm the deductible levels. For your information, we enclose a sample of a Registration form that also includes a section Declaration and Consent. A resident can register prior to May 1, 2003 or any time thereafter. However, an individual or a family who does not register and sign the consent form will not be eligible to receive PharmaCare financial assistance, and will therefore pay the full cost of drugs after reaching the eligible deductibles. Moreover, PharmaCare will set the deductible at $10,000 for an individual and each family member. Standard Life recommends all Plan Sponsors inform their employees that it is important to register prior to or shortly after May 1, Failure to register, could result in your Group Plan paying for the costs of drugs that may otherwise be payable by PharmaCare. These costs would be reflected in your Group Plan experience. As a Plan Sponsor you are

2 probably paying all or part of the premiums for the PharmaCare and Medical Services Plan coverage in addition to your Group Plan premiums. Every effort should therefore be made to have eligible drug expenses reimbursed appropriately. Standard Life will implement procedures to communicate with Group Plan members for confirmation of their Fair PharmaCare program registration. Thereafter, Standard Life will manage the information in the adjudication of claims process. Additional information will be provided in the future to all Plans Sponsors with BC residents, including groups that have the BCE Emergis Assure Card. To obtain additional information on registration please consult the Fair PharmaCare Frequently Asked Questions document at plani/faq/planifaqindex.html or Register for Fair PharmaCare document at https://pharmacare.moh.hnet.bc.ca/ How will the new Fair Care PharmaCare program affect your Group Plan? Impact on your Group Plan premiums Under the new program, British Columbians with low incomes will pay less for eligible prescription drugs; however, most working families will pay more. This will increase drug costs for most Group Plans. For individuals or families with a net annual income in excess of $35,000, the level of the first deductible will be greater than the deductible that applied prior to May 1, The cost shifting from PharmaCare to the private sector will ultimately be reflected in renewal rates. Impact on your Group Plan provisions Your Group Plan covers the eligible expenses not paid by PharmaCare which include drug expenses incurred prior to reaching the first annual PharmaCare deductible and the copayments that are payable after reaching the first deductible, subject to your Group Plan provisions. The changes to PharmaCare do not require any modification to your contract provisions or booklet wording. Options to offset the impact of the Fair PharmaCare program As a Plan Sponsor you may want to consider alternatives to reduce the impact of the cost increase. When communicating the increase in cost, Standard Life will be pleased to discuss changes to your plan design in order to meet both you and your employees needs. For example, the following options could be considered: Introduce or increase the member s co-payment for drug coverage Introduce or increase the single or family deductible on the Health Insurance Reduce or no longer cover the dispensing fee expense pay-direct drug plans If you need additional information Information on the Fair PharmaCare and Seniors Fair PharmaCare programs is available at the following WEB address: You can also consult the information provided on pages 3 and 4. As contract administrator we would ask that you advise your billing administrator(s) of these changes. Should you require further information, please communicate with your Benefits Advisor or your Standard Life Manager, Business Development. 2

3 BRITISH COLUMBIA PHARMACARE BENEFITS AS OF MAY 1, 2003 FAIR PHARMACARE PROGRAM RESIDENTS BORN IN 1940 OR AFTER NET ANNUAL INDIVIDUAL OR FAMILY INCOME Less than $15,000 Between $15, 000 and $30,000 Over $30,000 PHARMACARE PAYS 70% OF THE COST OF ELIGIBLE DRUGS UNTIL THE END OF THE YEAR OR UNTIL THE SECOND DEDUCTIBLE IS REACHED As of the first prescription, there is no deductible reach 2% of net income reach 3% of net income PHARMACARE PAYS 100% OF THE COST OF ELIGIBLE DRUGS FOR THE REMAINDER OF THE YEAR reach a maximum of 2% of net income drugs reach 3% of net income drugs reach 4% of net income SENIORS FAIR PHARMACARE PROGRAM FOR SENIORS AGE 65 OR OLDER ON MAY 1, 2003, AND WHO WILL TURN 65 ON OR BEFORE DECEMBER 31, 2004 NET ANNUAL INDIVIDUAL OR FAMILY INCOME Less than $33,000 Between $33, 000 and $50,000 Over $50,000 PHARMACARE PAYS 75% OF THE COST OF ELIGIBLE DRUGS UNTIL THE END OF THE YEAR OR THE SECOND DEDUCTIBLE IS REACHED As of the first prescription, there is no deductible reach 1% of net income reach 2% of net income PHARMACARE PAYS 100% OF THE COST OF ELIGIBLE DRUGS FOR THE REMAINDER OF THE YEAR reach 1.25% of net income drugs reach 2% of net income drugs reach 3% of net income Please note that the deductibles to be reimbursed for PharmaCare to pay 70% or 100% are based on income bands and are not exact to the percentage provided. BENEFITS PRIOR TO MAY 1, 2003 UNIVERSAL PLAN E PERSONS UNDER AGE 65 WHO DO NOT QUALIFY FOR MSP PREMIUM ASSISTANCE UNIVERSAL PLAN E PERSONS UNDER AGE 65 WHO QUALIFY FOR MSP PREMIUM ASSISTANCE SENIORS PLAN A PERSONS AGE 65 AND OLDER WHO DO NOT QUALIFY FOR MSP PREMIUM ASSISTANCE SENIORS PLAN A PERSONS AGE 65 AND OLDER WHO QUALIFY FOR MSP PREMIUM ASSISTANCE When the total expenses for eligible prescription drugs have reached the annual deductible of $1,000, PharmaCare pays 70% of eligible drugs. Coverage rises to 100% after out-of-pocket payments have reached $2,000 When the total expenses for eligible prescription drugs have reached the annual deductible of $800, PharmaCare pays 100% of eligible drugs. Pay $25 (or the combined drug cost and dispensing fee if the total is less than $25) for each prescription up to $275 per year. Pay $10 (or the combined drug cost and dispensing fee if the total is less than $10) for each prescription up to $200 per year. 3

4 BRITISH COLUMBIA PHARMACARE The following information is provided for reference purposes only. PharmaCare will confirm the deductible levels to the individuals or families who will register under the PharmaCare program. FAIR PHARMACARE INCOME BAND LEVELS NET INDIVIDUAL OR FAMILY INCOME BAND LEVELS COST OF DRUGS TO REACH FIRST DEDUCTIBLE TOTAL OUT-OF-POCKET COST TO REACH SECOND DEDUCTIBLE COST OF DRUGS AFTER FIRST DEDUCTIBLE TO REACH SECOND DEDUCTIBLE TOTAL COST OF DRUGS TO REACH SECOND DEDUCTIBLE $ $ $ $ $ 0.00 to 1, , to 3, , to 4, , to 6, , to 8, , to 11, , to 13, , to 15, ,000 15, to 16, , to 18, , to 21, ,067 21, to 23, ,200 23, to 26, ,333 26, to 28, ,467 28, to 30, ,000 1,600 30, to 31, ,200 1,000 1,900 31, to 35, ,000 (1) 1,350 1,167 2,167 35, to 38, ,100 1,475 1,250 2,350 38, to 41, ,200 1,600 1,333 2,533 41, to 45, ,300 1,750 1,500 2,800 45, to 48, ,400 1,875 1,583 2,983 48, to 51, ,500 2,000 (2) 1,667 3,167 51, to 55, ,600 2,150 1,833 3,433 55, to 58, ,700 2,275 1,917 3,617 58, to 61, ,800 2,400 2,000 3,800 61, to 65, ,900 2,550 2,167 4,067 65, to 70, ,000 2,675 2,250 4,250 70, to 79, ,250 3,000 2,500 4,750 79, to 87, ,500 3,350 2,833 5,333 87, to 95, ,750 3,675 3,083 5,833 95, to 108, ,000 4,000 3,333 6, , to 125, ,500 4,675 3,917 7, , to 141, ,000 5,350 4,500 8, , to 158, ,500 6,000 5,000 9, , to 183, ,000 6,675 5,583 10, , to 216, ,000 8,000 6,667 12, , to 250, ,000 9,350 7,833 14, , to 283, ,000 10,000 6,667 14, , to 316, ,000 10,000 3,333 12, , and over 10,000 10, ,000 (1) $1,000 deductible under the Universal Plan E prior to May 1, 2003 (2) $2,000 deductible, out-of-pocket cost, under the Universal Plan E prior to May 1,

5 Fair PharmaCare Program Registration Form If you require PharmaCare financial assistance urgently, call or visit to register. See reverse side if you have any questions about this registration form. All sections on this form must be completed. Note: Mail registration is the slowest way to register estimated time is 6-8 weeks. REGISTRANT (Please Print) YOUR NAME AS IT APPEARS ON YOUR INCOME TAX RETURN SURNAME GIVEN NAME Address City Prov Postal Code BC Personal Health Number (CareCard) Date of Birth (YYYY / MM / DD) Tax Year Net Income*.00 Yes, I meet the requirements for registration (see reverse: Who Can Register? ) No (see reverse) See reverse for relevant year SPOUSE (Please Print) YOUR NAME AS IT APPEARS ON YOUR INCOME TAX RETURN SURNAME GIVEN NAME Personal Health Number (CareCard) Date of Birth (YYYY / MM / DD) Tax Year Net Income* *If you have no income to report, please enter zero. Yes, my spouse meets the requirements for registration (see reverse) No (see reverse).00 See reverse for relevant year DEPENDENT CHILDREN Personal Health Number (CareCard) Date of Birth (YYYY / MM / DD) Personal Health Number (CareCard) Date of Birth (YYYY/MM / DD) If you have more than 4 dependent children, please check this box and attach a separate sheet giving information for additional children. Declaration and Consent Important: Both you and, if applicable, your spouse, must sign in the space provided below. If someone has a Power of Attorney or another legal representation agreement and is signing on your behalf, please include a copy of the agreement. Copies of such agreements may be forwarded to the Canada Customs and Revenue Agency (CCRA) on its request. Please do not make changes to the wording below as the CCRA will consider the form invalid if it is altered in any way. DECLARATION AND CONSENT I hereby consent to the release by the Canada Customs and Revenue Agency to the Minister of Health Services, or his or her delegate, of information from my income tax return and,if applicable, other required taxpayer information. The information will be relevant to and used solely for the purpose of determining, verifying, and administering my level of benefit in the Fair PharmCare Program under the Continuing Care Act of British Columbia. Provincially, the information will be protected in accordance with the Freedom of Information and Protection of Privacy Act of British Columbia and will not be disclosed without my consent to any persons. This authorization is valid for the two taxation years prior to the year of signature, the current taxation year, and each subsequent consecutive taxation year for which assistance is requested by me. I understand that, if I wish to withdraw this consent, I may do so at any time by writing to the Manager, PharmaCare Operations, Ministry of Health Sevices at PO Box 9655, Stn Prov Govt, Victoria, BC V8W 9P1. I declare the information I have provided to be true and complete. Signature of registrant Signature of spouse Date Signed ( ) Social Insurance Number Social Insurance Number Daytime telephone no. HLTH /02/04

6 Important Information Who Can Register? If you don t meet these requirements call Persons who: have been a resident of British Columbia for at least three months, and are registered with the Medical Services Plan of British Columbia, and meet the Canadian residency requirement (person has resided in Canada and has been a Canadian citizen or holder of permanent resident status for the last 12 months), and filed an income tax return for the relevant taxation year. If you have a spouse and/or dependent children (refer to the definitions below) you must register as a family. What is the Definition of Spouse? For PharmaCare purposes, a spouse is: a person who is either married to or living and cohabitating in a marriage-like relationship with the registrant, and may be of the same gender as the registrant. Who is Considered a Dependent Child? For PharmaCare purposes, a dependent child is: a resident who is the legal ward or child of the registrant or spouse, and is supported by the registrant or spouse, and is neither married nor living and cohabiting in a marriage-like relationship, and is either age 18 or younger, or age 19 to 24 and attending school or university full-time, and is included in your (or your spouse s) Medical Services Plan coverage, and is not currently registered with PharmaCare as a member of another family. Completing the Form Please complete all sections of the form including the Declaration and Consent. Incomplete forms cannot be processed and will be returned. Address: Your current mailing address. Net Income: Provide the net income shown on Line 236 of your Canada Customs and Revenue Agency (CCRA) Notice of Assessment or income tax return for the applicable tax year. Tax Year: If you are registering for PharmaCare coverage for 2003, provide the net income from your Notice of Assessment for the 2001 tax year; for 2004, provide the net income from your Notice of Assessment for the 2002 tax year, and so on. Important: If either you or your spouse did not file an income tax return for the applicable year, you will need to do so before registering for Fair PharmaCare. If you have only recently met the Canadian residency requirement, a more recent tax return may be accepted. If this applies to you and you have questions, please call Declaration and Consent: The Declaration and Consent must be signed by you (the registrant) and, if applicable, your spouse. The consent allows PharmaCare to request your income information directly from the Canada Customs and Revenue Agency (CCRA) for use in calculating your level of coverage. Please do not change the wording of the Declaration and Consent as the CCRA will consider the form invalid if it is altered in any way. Without this consent, PharmaCare will be unable to determine the appropriate level of financial assistance for your family and the deductible for each member of your family will be set at the highest amount. Personal information is collected, used, disclosed and provided security in accordance with the British Columbia Freedom of Information and Protection of Privacy Act. If you have any questions about the collection of this information, please contact the Manager, PharmaCare Operations, Ministry of Health Services at PO Box 9655, Stn Prov Govt, Victoria, BC V8W 9P1 or call Mail your completed form to: P.O. Box 9659 Stn Prov Govt Victoria BC V8W 9P1 Or Fax to:

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