Your PSHCP questions answered

December 15, 2023
Woman opening pill bottle.
The phone and email lines at Federal Retirees’ national office have been clogged since the Public Service Health Care Plan changed hands from Sun Life to Canada Life.

Over the past five months, members have contacted the Association with questions, many related to medication coverage changes in the PSHCP. 

If you have questions about claims or information about your plan, we suggest you contact Canada Life at 1-855-415- 4414 (toll-free), but in the meantime, we hope this might help. 

Why the change? 

The change from Sun Life to Canada Life was initiated and implemented by the Treasury Board of Canada Secretariat and took effect July 1, 2023. 

This cyclical, competitive process is normal and was required. Plan changes negotiated by government representatives, public service unions and the Association, representing pensioners, were implemented at the same time. The Association was not involved in the re-tendering or selection of the new provider. 

What is the Association doing about the problems with Canada Life? 

The contract for the PSHCP is an agreement between the Government of Canada and Canada Life. It is their joint responsibility to deliver a seamless transition, and to monitor and correct performance issues. Since the beginning of the transition, Federal Retirees has been advocating for solutions, including improved call centre capacity and support for members who are not online. In his role as pensioner representative, Association president Roy Goodall called for an in-person Partners Committee meeting and met with the president of the Treasury Board to discuss solutions. 

The Association is working with the Treasury Board and the PSHCP Administration Authority to answer urgent questions as quickly as possible. 

What are some of the changes related to medications? 

Before July 1, the plan covered almost every drug authorized by Health Canada. The plan also had very limited terms regarding reasonable and customary costs for medication, meaning markup and/or dispensing fee costs were borne by the plan. In Canada, while drugs are tested extensively, there is generally little regulation on the cost or relative effectiveness of prescription medications. This has led to significant increases in drug spending with limited member benefits. 

Methods of addressing these cost pressures have evolved since the PSHCP was last updated, and some changes were applied to the renewed plan. While plan changes were implemented in July, some legacy clauses were implemented. This legacy period ends Dec. 31, 2023. 

Below, we list some of the major changes.

Mandatory generic drug substitution: A legacy period is in effect for mandatory generic substitution until Dec. 31, 2023. During this time, members on brand-name drugs prescribed before July 1 will have their prescriptions reimbursed at 80 per cent of their cost. But starting Jan. 1, 2024, all prescription drugs covered under the PSHCP will be reimbursed at 80 per cent of the cost of the lowest-cost alternative generic drug, so members who remain on brand-name drugs may notice this change in the new year. 

If you’re someone who cannot take the generic version of the drug you are prescribed due to medical reasons, you must complete an exception form and send it to Canada Life for approval. This form is available on Canada Life’s PSHCP website, or you may request a copy by mail through the Canada Life call centre. 

Compound drugs: Beginning Jan. 1, 2024, all compound drugs must include at least one active ingredient with a DIN that is eligible under the PSHCP to qualify for reimbursement. 

Since July 1, 2023, a legacy period has been in place, during which existing prescriptions for compound drugs have still been reimbursed if they do not meet this requirement. Members should therefore talk to prescribers about this imminent change as soon as possible.

Dispensing fee cap and frequency limits: As of July 1, 2023, PSHCP plan members have been covered for dispensing fees up to $8, reimbursed at 80 per cent. The dispensing fee cap does not apply to biologic or compound drugs. Exceptions may apply to some provinces and territories due to pharmacy regulations. Contact Canada Life for more information about these exceptions. 

Dispensing fee caps are a common industry practice among employer-sponsored plans. As dispensing fees vary by pharmacies, plan members may wish to review the fees in their local drugstores to ensure they can maximize the covered amount. In addition, the PSHCP also now has a provision that limits the number of dispensing fees in a calendar year. Plan members can claim up to five dispensing fees per year for maintenance drugs only. There are some exceptions for safety, storage and cost. To request an exception, complete the form available on Canada Life’s PSHCP website. 

Exceptions may apply in some provinces/territories due to pharmacy regulations. Members can speak with their pharmacist about a 90-day supply of maintenance drugs to stay within the annual limit of five dispensing fees. If you have questions about your coverage for medication dispensing, please contact Canada Life at 1-855-415-4414 (toll-free). 

Prior authorization: Prior authorization is a process in which certain prescription drugs require pre-approval before they can be reimbursed under the PSHCP. The list of drugs requiring prior authorization is available on Canada Life’s PSHCP website. 

Plan members on existing treatments as of July 1, 2023 that are part of the prior authorization program are subject to permanent exceptions for ongoing medications. This does not apply to PSHCP members on biologic medications where a biosimilar is available. 

If a plan member is on a biologic drug and a biosimilar exists, Canada Life may contact you with details about switching to a biosimilar equivalent drug. New biologic treatments prescribed after July 1, 2023, when available, will be switched to a biosimilar treatment. If an exception is required due to medical reasons, your prescriber may submit an exception form to Canada Life for approval. Biosimilar drugs are approved by Health Canada. They are very similar to an originator biologic drug in terms of quality, efficacy and safety. Plan members who start treatment with the drugs listed under the prior-authorization program are subject to a pre-approval process. Your medical practitioner must complete a prior authorization form, available on Canada Life’s PSHCP website or by contacting Canada Life to request a form in the mail. 

Details about these plan provisions and PSHCP benefits can be found in the PSHCP Plan Directive and Part 1 of the Member booklet-at-glance. Part 2 was to be available in the fall. Visit or contact Canada Life for a hard copy.


This article appeared in the winter 2023 issue of Sage magazine as part of our “Health Check” series, which addresses timely health questions and health-related policies with a focus on issues affecting older Canadians. While you’re here, why not download the full issue and peruse our back issues too?