Term Meaning
Broker An advisor/BROKER to employers on insurance programs and types of insurance. Brokers are usually distributers or re-sellers of insurance product offerings from insurance companies.
CDIPC Canadian Drug Insurance Pooling Corporation
CDIPC Pool The portion of prescription drug costs paid by an insurer after being claimed by an insured that qualify for CDIPC pooling in meeting ongoing or initial threshold requirements. Paid claims contribute to the CDIPC pool if the insured has coverage with a participating member in CDIPC and their claim has met the initial and ongoing threshold requirements. Drug claims in excess of the ongoing threshold are shared by member companies at 85% of the cost of eligible expenses up to CDIPC’s pooling maximum.

There are three CDIPC pools; one for claims from Quebec, one for provinces with "pharmacare" coverage as deemed by CDIPC (BC, Manitoba, Saskatchewan), and one for the remaining provinces. This approach allows for a more appropriate pooling of claims.
CDIPC initial threshold Established annually by CDIPC, this is a certificate’s annual dollar value of prescription drug claims paid by the insurer that must be equalled or exceeded for two consecutive years, in order for the certificate to initially qualify for industry (CDIPC) pooling.
CDIPC ongoing threshold Established annually by CDIPC, this is a certificate’s annual dollar value of prescription drug claims paid by the insurer that after the initial threshold has been achieved, must be equaled or exceeded annually to continue qualifying the certificate for industry (CDIPC) pooling.
CDIPC pooling maximum Established annually by CDIPC, this is the maximum amount of CDIPC pooling that can be provided for drug claims belonging to one insured in a calendar year.
Certificate The person or persons insured by an insurance policy with a drug insurance plan.
Consultant An advisor to employers on insurance program, types of insurance and benefit programs. Sometimes also a procurement service provider of insurance product offerings from insurance companies on behalf of the employer.
Dependent(s) Additional persons deemed by the insurance company as related to a plan member and covered under an insurance policy.
Drug claim The combined total of all submitted drug costs that are paid by an insurance company in a calendar year for an insured.
Eligible claim amount The net amount of a drug claim after all other deductions (ex: co-insurance, deductibles, etc.) or other coverage (ex: pharmacare).
EP3 Abbreviation for proprietary Extended drug policy Protection Plan.
EP3 Pool This is the 1st pooling component of a fully insured drug insurance plan intended to group the costs of claims over a threshold defined by the insurer, up to the CDIPC ongoing threshold. An EP3 pool can include drug costs that;
  • • do not exceed CDIPC’s ongoing and/or initial threshold
  • • are excluded from CDIPC pooling during plan member’s first year of high drug costs (as CDIPC pooling only occurs in year 2 and beyond)
  • • exceed CDIPC’s pooling maximum
  • • are the 15% of eligible drug costs not covered by CDIPC when the CDIPC pooling maximum is not exceeded.
EP3 certificate A document provided annually by the insurer to the employer that certifies the employer’s plan is an EP3 plan, provides information about pre-existing exclusions and parameters applied for EP3 pooling by the insurance company.
Fully insured A type of insurance plan where the claims are fully underwritten and insured by the insurance company.
Group insurance Insurance offered for specific benefit types (ex: health, dental, drug, etc.) by insurance companies to employers as a benefit to their employees. The insurance is sold by the insurer itself, brokers, or consultants.
High cost drugs A set of prescription drugs claimed to one or more insurers for a given plan member and dependents whose total annual cost exceeds that year’s ongoing threshold.
Industry pool Another term for CDIPC pool.
Initial threshold Shorter version of CDIPC initial threshold.
Insurance company A for-profit or not-for-profit corporate entity licensed by federal or provincial authorities to underwrite health insurance products. The company can also perform some or all of the following; design insurance plan offerings, administer insurance plan enrolment, process claims, and service inquiries.
Insured The plan member and dependents of the plan member covered by an insurance policy with a drug insurance plan.
Mandatory pooling The requirement for insurers to pool the claim expense for high cost drugs at two levels; EP3 and CDIPC.
Ongoing threshold Shorter version of CDIPC ongoing threshold.
Plan member(s) The person or persons insured by an insurance policy with a drug insurance plan.
Pooling The process by which insurers collect and redistribute (or share) eligible claim costs in a pool to entities (ex: other insurers or employers) belonging to the pool.
Underwriting The process used by an insurance company to assess the risk associated with providing insurance coverage.