What is the Canada Health Act?

The CHA is Canada’s federal legislation for publicly funded healthcare insurance. The CHA establishes the criteria and conditions related to insured health services that the provinces and territories must satisfy to receive funding from the federal government. The goal is to ensure that patients cannot be charged out of pocket for medically necessary care offered by doctors and hospitals.

In recent years, there has been a significant increase in the number of Canadians accessing health services through virtual care companies. These entities provide medically necessary services to Canadians for a fee. To get around CHA restrictions, patients are matched with health providers located in a different province. Demand for these services has increased significantly since the onset of the COVID-19 pandemic.

What may change?

In 2023, the Federal Health Minister indicated that the government could claw back health transfer payments to provinces that allow patients to be charged for medically necessary care. Enforcement of the CHA would effectively prohibit employer-sponsored benefits plans from covering virtual healthcare.

The Canada Health Act (CHA) Services Policy, which will come into effect on April 1, 2026, ensures that medically necessary services are covered by provincial or territorial healthcare plans. The policy establishes criteria and conditions that provinces and territories must meet to receive full federal cash contributions from the federal government.

Those who support the Canada Health Act (CHA) Services Policy believe:

• Individuals with access to healthcare through employer-sponsored plans should not have preferential access to care over individuals who rely on government-sponsored care.
• Canadians should not be paying out of pocket for medically necessary care.

Opponents of the Canada Health Act (CHA) Services Policy argue that employer-sponsored virtual healthcare:

• Provides access to health services for individuals who do not have a family physician
• Reduces or eliminates visits to the emergency room and walk-in clinics
• Reduces strain on the healthcare system, allowing easier access to care for individuals who rely on government-sponsored care

Next steps

The Canada Health Act (CHA) Services Policy comes into effect April 1, 2026 and benefit plans should evaluate whether changes will be required.

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Segal can be retained to work with plan sponsors and their legal counsel on determining the implications.