Canada Gazette, Part I, Volume 156, Number 1: Regulations Amending the Veterans Health Care Regulations
January 1, 2022
Statutory authority
Department of Veterans Affairs Act
Sponsoring department
Department of Veterans Affairs
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Executive summary
Issues: Mental health problems are experienced by a significant portion of the Veteran population. They affect Veterans, their partners and their families’ income, quality of life, and disability, including the increased risk of suicide. Coverage for mental health assessment and treatment services is subject to provincial/territorial health care plans and varies across the country. In some cases, Veterans are forced to pay out-of-pocket or wait to seek treatment until they receive favourable decisions on their disability benefit applications, which would provide coverage for these services. Veterans Affairs Canada’s (VAC) current service standard for processing disability benefits applications is 16 weeks and may be longer depending on the complexity of the claims and the backlog of applications. VAC’s published service standard statistics for 2019–20 reveal that 76% of first applications are completed outside of the service standard, resulting in delayed access to treatment. Over the last few years, some Veterans have experienced wait times of up to two years. Amendments to the Veterans Health Care Regulations (VHCR) are required to provide authority for VAC to implement the new Mental Health Benefits in Part 1 (Health Care Benefits, under which Treatment Benefits are authorized). Approval of this initiative would allow Veterans to obtain coverage for early access to mental health services and treatment for an eligible mental health condition. This would help minimize the risks associated with waiting for a disability decision before Veterans access treatment, while reducing the likelihood of living with a more prolonged or severe mental health problem.
Description: The Department of Veterans Affairs Act provides authority for the Department to administer legislation relating to the care, treatment, or re-establishment in civilian life of Veterans. The VHCR were created under this authority, and amendments to the Regulations are required to create the proposed Mental Health Benefits.
The proposed regulatory amendments would allow VAC to develop the Mental Health Benefits by adding a subheading with provisions to govern the program. The new subheading in the VHCR would describe the parameters and create the framework for the new benefits, and distinguish them from other health care programs. It would set out the eligibility requirements and scope of coverage, and specify if other provisions of the VHCR are applicable. The benefits are only available to Veterans (i.e. former members of the Canadian Forces), and only allow for coverage in Canada. They do not provide reimbursement for cannabis for medical purposes, nor coverage for supplementary benefits (health-related travel) until determination of eligibility.
Rationale: The Mental Health Benefits would provide coverage for earlier access to specific treatment benefits for eligible mental health conditions, such as anxiety disorders, depressive disorders, and/or trauma — or stressor-related — disorders, that have been shown to have a strong relationship to military service. Early interventions and faster access to coverage for mental health services minimize the worsening of mental health conditions and contribute to improved overall well-being in the lives of Veterans, now and in the future. The regulatory option requires the amendment to the VHCR. It meets the priorities established in the mandate letter to the Minister of Veterans Affairs, includes the broadest group of Veterans, offers coverage for access to mental health treatments, and aims to immediately support the mental health of Veterans while they wait for a decision on VAC disability benefits applications.
The cost-benefit analysis (CBA) estimates the impact of the proposed amendment to the Regulations on Veterans and their families. The CBA estimates the costs that would only be incurred by the Government of Canada. The CBA was conducted against a baseline scenario in which the VHCR is in force minus the existence of the Mental Health Benefits. In this environment, only Veterans who receive a favourable decision on their disability benefit application for mental health would be eligible for coverage from VAC for mental health benefits. Some Veterans may wait for a decision on their disability benefit application before accessing mental health care.
Cost-benefit statement: The estimated net present value (PV) of the amendments is −$34.2 million over 10 years, from fiscal year (FY) 2021–2022 to FY 2030–2031. The PV of total benefits is valued at $6.5 million over the period, while costs are valued at $40.7 million. All costs related to these regulatory changes would be incurred by the Government of Canada and the benefits would mainly be received by Veterans and/or their families. The government cost includes operating costs of $34.2 million (including contracting costs) and program costs of $6.5 million. Despite the costs, the benefits are encompassing and would enhance Veterans’ overall health and well-being. The Mental Health Benefits simplify obtaining coverage for access to mental health support for Veterans and early intervention, and faster access to mental health services would lead to improved health outcomes and well-being of Veterans.
It is estimated that 27 000 Veterans will access the Mental Health Benefits during the first 10 years following implementation (both favourable and unfavourable decisions on disability benefits applications). It is estimated that 5% (1 325) of those individuals would receive an unfavourable decision for their mental health condition applications but will still be reimbursed for their treatment expenses for two years under this initiative. The proposal would permit the reimbursement of a range of benefits and supports for Veteran well-being. In addition, it would also have a positive effect on families, such as decrease in stress, given the expected improvement to the well-being of Veterans.
One-for-one rule and small business lens: The amendments to the Regulations would not involve any changes in administrative and compliance costs, or cost savings to business, consumers, competition and domestic and international trade impacts (exports and imports). There would therefore be no impacts on businesses and consumers.
The aim of the proposal is to help Veterans obtain assistance through early coverage of mental health benefits; the proposed regulatory amendments will secure the needed authority to implement the provisions of the new benefits.
Veterans and other stakeholders regularly observe that the wait of up to two years for an approved disability claim is a barrier to seeking mental health treatment. Therefore, improvements made by VAC in coverage for this type of support would likely receive a positive reaction. The proposed regulatory amendments would likely result in increased satisfaction with the services and benefits that Veterans receive from VAC.
Issues
Veteran populations are at a higher risk for mental health issues than the Canadian population. VAC’s Life After Service Studies (LASS) program of research in 2019 noted that Veterans reported chronic conditions, including depression (26%), anxiety (21%), and post-traumatic stress disorder (PTSD) [24%], at a higher prevalence than Canadians of comparable age and sex. More than 20% of Veterans reported moderate to severe psychological distress, and suicidal ideation was reported by 10% of male Veterans and 11% of female Veterans.
Coverage for mental health assessment and treatment services is subject to provincial/territorial health care plans and varies across the country. Therefore, in some cases, Veterans are forced to pay out-of-pocket or wait for mental health treatment until their application for disability benefits is approved. There are also some Veterans who cannot pay for treatment while they await the decision on their disability benefits application, causing further delay in their care and recovery. Further, VAC’s current service standard to render a decision on disability benefit applications is 16 weeks. Depending on the complexity of the claims and application backlogs, some Veterans have waited up to two years for their claims to be adjudicated.
The development of the Mental Health Benefits would be achieved through regulatory amendments to the VHCR. The new initiative would form part of VAC’s approach to mental health care and would help provide immediate coverage for mental health services. COVID-19 also reinforced the urgent need for immediate access to mental health services. Without the regulatory change, the Mental Health Benefits would not be implemented, and delayed access to mental health treatments may cause negative impacts on Veterans’ overall well-being.
Background
Currently, Veterans can receive financial support from VAC for mental health care through the Treatment Benefits program, and access to coverage for mental health benefits once a favourable decision is reached linking their disability to their military service.
As of March 31, 2020, there were approximately 34 765 Veterans receiving disability benefit for a mental health condition. VAC’s published service standard statistics for 2019–20 reveal that 76% of first applications for a disability benefit are completed outside of the service standard of 16 weeks, which in some cases could result in the Veteran delaying access to treatment and potentially aggravating a service-related medical condition, in particular if coverage is not available elsewhere. Some Veterans have experienced wait times of up to two years for their claims to be adjudicated, with female Veterans and Francophone Veterans experiencing longer processing times for their disability benefit claims to be adjudicated than their counterparts.
With recent investments made at VAC in the decision-making processes and the hiring and training of new temporary staff to address the backlog, as of October 6, 2021, the average wait time is 19.7 weeks for a decision to be rendered on a disability benefit application for PTSD, and an average of 42.4 weeks for disability benefit applications for depressive disorders. The improvements in wait times are expected to continue; however, delay in treatment could still have a negative impact on the Veteran and their family across all domains of well-being: health, purpose, finances, social integration, life skills, housing/physical environment and culture/social environment. The delay could contribute to a worsening of the conditions and, in severe cases, an increased risk of suicidal ideation or death by suicide.
The current backlog of disability benefit applications at VAC has been an increasing point of frustration among Parliamentarians and stakeholders over the past few years. The implementation of a proposal that supports mental health is likely to be seen as a positive measure that directly helps Veterans, some of whom may be in urgent need.
The target date of implementation for the Mental Health Benefits is April 1, 2022, and regulatory amendments are needed to implement this initiative, costing for which Budget 2021 proposed to provide $140 million over 5 years starting in 2021–2022, and $6 million per year ongoing on an accrual basis.
Objective
The main objective of the proposed regulatory amendments is to allow VAC to develop the Mental Health Benefits and to provide the regulatory framework to deliver the program. The proposed initiative is directly linked to VAC’s mandate to support the well-being of Veterans. The initiative contributes to the departmental results that Veterans are physically and mentally well and are satisfied with the services they receive from the Department. In addition, there would be some housekeeping amendments to the VHCR that have been identified to correct errors and bring references up to date. The opening of the VHCR is an opportunity to make these housekeeping amendments, which are needed but do not impact or relate to the new initiative.
Description
The VHCR govern the provision of health care benefits and services to Veterans. The proposed regulatory amendments would prescribe a set of requirements under the VHCR for the development of the Mental Health Benefits.
Persons eligible include former members of the Canadian Forces (CF) who, as of April 1, 2022, have a pending application or who apply for a disability pension or pain and suffering compensation for anxiety disorders, depressive disorders, and/or trauma — or stressor-related — disorders. CF Veterans who are also Royal Canadian Mounted Police (RCMP) members are eligible for the initiative if their application relates to a mental health condition arising during or aggravated by CF service. Still serving CF members (including Reservists) are not eligible as they are covered for treatment through the Department of National Defence (DND).
Research by the Canadian Mental Health Association indicates that early intervention in treating mental health conditions results in increased success and overall improvements in social and economic outcomes for persons with mental health disabilities. The Mental Health Benefits would immediately allow eligible Veterans to have access to coverage for mental health treatment upon initial application for disability benefits until a first decision is made on the Veteran’s application. If the Veteran receives a favourable decision, they would seamlessly transition to VAC’s Treatment Benefits program for coverage. If the Veteran’s application is denied, they would continue to receive the Mental Health Benefits until two years from their entrance into the program.
Coverage under the Mental Health Benefits would
- be automatic upon validation of key information in the disability benefits application for specified mental health conditions;
- be subject to the condition that these benefits are not available to Veterans from other sources (e.g. as a former member of the CF or as an insured benefit under their provincial or territorial health care insurance program); and
- include mental health care and services provided by health professionals, including psychologists and social workers, and any pharmaceuticals prescribed for mental health conditions.
The Mental Health Benefits would be modelled after the Treatment Benefits program. The financial and frequency thresholds currently applicable to the Treatment Benefits program would be extended to the Mental Health Benefits, in order to ensure a seamless transition to the Treatment Benefits program. The program does not include coverage for physician care, in-patient treatment care, reimbursement of health-related travel expenses, or cannabis for medical purposes. Veterans would be able to seek reimbursement for such expenses when they receive their disability benefits entitlement.
The Mental Health Benefits are not intended to infer entitlement to disability benefits and would not impact eligibility for any other VAC programs. Early intervention for mental health conditions promotes health, minimizes disability later in life and optimizes well-being. Further, this initiative would help promote increased satisfaction with the services and benefits that Veterans receive from VAC.
Regulatory development
Consultation
The regulatory proposal was informed by ongoing consultation regarding the need for increased awareness of the services and supports that VAC has available for Veterans, including those for mental health conditions. In addition, VAC organized and hosted several town halls across Canada in 2018 where support measures for mental health were raised as a priority issue. Local Veterans’ organizations and other stakeholders who have an interest in Veterans’ issues attended these meetings.
Input from the Minister’s advisory groups (Advisory Group on Families, Policy Advisory Group, and Mental Health Advisory Group) was relied upon in the development of this proposal, as well as recommendations from the Veterans Ombudsperson.
The Mental Health Advisory Group includes members with expertise or experience in mental health and/or Veterans’ issues, such as Veterans themselves, members of Veterans’ organizations (e.g. the Indigenous Veterans Association), and members of professional mental health bodies. The co-chairs of the Mental Health Advisory Group last met on February 26, 2021, and January 19, 2021, and the last full meeting was on April 28, 2021.
The RCMP was consulted in the development of the Mental Health Benefits, but chose not to participate at this time. Most former RCMP members are eligible to receive coverage through the Public Service Health Care Plan (PSHCP), which includes up to $2,000 each year in psychological services. Active members who are awaiting a decision on a disability benefits application to VAC continue to receive mental health treatment through the RCMP Occupational Health and Safety program.
In order to ensure that the Department’s priorities and initiatives align with Veterans’ needs, VAC will continue to liaise and consult with Veterans and their families, Veteran stakeholder groups, Canadians, and subject matter experts. Engagement venues could include forums, roundtables, ministerial advisory group meetings, and other forms of consultation, including Deputy Minister roundtables.
Modern treaty obligations and Indigenous engagement and consultation
The assessment of modern treaty implications conducted in accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation concluded that the Mental Health Benefits does not impose any new regulatory requirements and, therefore, does not result in any impact on modern treaty rights or obligations. As a result, specific engagement and consultations were not undertaken with Indigenous peoples. However, the prepublication comment period, which is open to all Canadians, is an opportunity for Indigenous peoples to provide feedback on the proposed Mental Health Benefits.
Instrument choice
Option 1: E-mental health (non-regulatory option)
VAC would establish a partnership with another organization to develop Veteran-specific content on a virtual mental health platform. All Canadian Veterans and their families would have access to the site, including parallel information and self-help tools to support their well-being, and have access to service providers with expertise and competence in caring for Veterans. No new legislative authorities would be necessary to implement this initiative.
Option 2: Mental Health Benefits
With this approach, VAC would provide access to coverage for mental health treatment to provide Veterans the opportunity to receive early mental health interventions and treatments to prevent and/or address current or emerging mental health issues. Regulatory amendments would be required.
Regulatory analysis
No instrument other than the VHCR satisfies the requirement, and it is through the VHCR that the Mental Health Benefits can be developed. Regulation is the best tool to achieve the desired outcome, and the result would not impose a regulatory burden on businesses or Canadians. This statutory requirement was established to address the health and safety of Veterans at risk. The proposed regulatory change is necessary, as the initiative is scheduled to be implemented on April 1, 2022.
Benefits and costs
The estimated net present value of the amendments is −$34.2 million over 10 years, from fiscal year (FY) 2021–2022 to FY 2030–2031. The present value (PV) of total benefits is valued at $6.5 million over the period, while costs are valued at $40.7 million. However, there are substantial non-monetized benefits that justify the proposal, notably the well-being of Veterans and their families. Veterans with mental health needs would have coverage for early access to certain mental health treatment and services through this initiative. Veterans and their families would be financially secured as they would not have to pay for mental health treatment and services out of pocket.
A full CBA report is available upon request by contacting the VAC official whose contact information is provided at the end of the Regulatory Impact Analysis Statement.
Analytical framework
The costs and benefits for the amendments have been assessed in accordance with the Treasury Board Secretariat’s Cost-Benefit Analysis Guide.footnote 1 The cost-benefit analysis attempts to capture the economic and social impacts of the amendments (the regulatory scenario) relative to the present environment where the changes did not occur (baseline scenario) and pinpoint the incremental changes between the two scenarios. These incremental changes are estimated over the period spanning the 2021–22 fiscal year to the 2031–32 fiscal year, and monetized values are reported in present values over the same period, discounted at 7% and expressed in 2021 dollar value.
Methodology
The cost estimates were prepared on the basis of assumptions using the following methodology.
Total clients
The total number of clients was based on the expected number of Veterans with an application for disability benefits for mental health conditions, such as anxiety disorders, depressive disorders, and/or trauma — or stressor-related — disorders. Veterans who receive an unfavourable decision would receive Program of Choicefootnote 2 (POC) 10 — Prescription Drugs (with the exception of cannabis for medical purposes) and POC 12 — Related Health Services (limited to specific benefit codes) under the new Mental Health Benefits for two years. Supplementary benefits (health-related travel) are not covered under the initiative.
Unit cost
The unit cost was estimated by using the average cost 2019–20 of POC 10 — Prescription Drugs (with the exception of cannabis for medical purposes) and POC 12 — Related Health Services for Veterans in receipt of treatment benefits. Note that not all of the POC 12 benefit codes were used in calculating the average cost, just those that are to be included in the new initiative. Supplementary benefits (health-related travel) are not covered under the initiative.
Calculation of average costs was limited to A-line transactions (A-line transactions means transactions exclusively related to a pensioned condition or pain and suffering compensation) for CF Veterans in receipt of a disability benefit for a mental health condition.
Total expenditures
Expenditures for this proposal were estimated by multiplying the unit cost by estimated number of clients expected to use the program each year.
Supporting data sources
Federal Health Claims Processing System transactions were used to estimate average costs. Favourable rates originate from disability decisions rendered in VAC’s Client Service Delivery Network.
Assumptions
Assumptions were based on best available information, to simplify the analysis, and to deal with inherent uncertainties.
The following assumptions have been used in the cost-benefit analysis:
- Implementation of the Mental Health Benefits is April 1, 2022.
- There would likely be no uptake by war service Veterans due to their advanced age though they would be eligible should they apply.
- Coverage would be for a total of 24 months or until the Veteran receives a favourable entitlement for the condition for which they applied, whichever comes first.
- The average cost per client in 2019–2020 is $3,641, and this was escalated to $3,681 to reflect all expenditures in constant 2021 dollars. This is equal to the average POC 10 (with the exception of cannabis for medical purposes) and POC 12 cost for CF Veterans in receipt of disability benefits for a mental health condition. In calculating average cost, POC 12 was limited to the benefit codes provided related to Mental Health services.
- In Year 1 and Year 2, an estimated 5% potential increase in applications was included due to communication of immediate availability of treatment benefits.
- Incremental costs only are presented, as Veterans who receive a favourable pain and suffering compensation (PSC) entitlement are eligible for Treatment Benefits as of the first day of the month in which the PSC is payable to the Veteran.
- Over 10 years, 1 325 additional clients would be eligible for the new Mental Health Benefits, as shown in the table below.
| Forecast 2021–22 |
Forecast 2022–23 |
Forecast 2023–24 |
Forecast 2024–25 |
Forecast 2025–26 |
Forecast 2026–27 |
Forecast 2027–28 |
Forecast 2028–29 |
Forecast 2029–30 |
Forecast 2030–31 |
Total 10 years |
|
|---|---|---|---|---|---|---|---|---|---|---|---|
| New Mental Health Benefits recipients | 0 | 141 | 148 | 148 | 148 | 148 | 148 | 148 | 148 | 148 | 1 325 |
| Total Mental Health Benefits recipients paid in year | 0 | 141 | 289 | 296 | 296 | 296 | 296 | 296 | 296 | 296 | N/A |
Limitations
The costing for the proposed regulatory amendment was limited by the availability of data for analysis. Any deviation of the total population from the sample could produce different results.
Currently, Veterans are able to immediately access treatment and can be reimbursed for any costs carried as soon as they receive a favourable decision for their disability benefit application. However, some clients who receive a favourable decision may not be immediately accessing treatment due to their personal financial situation. Unfortunately, it is not possible for VAC or the Office of the Chief Actuary to estimate how many Veterans may fit into this group. Overall this costing assumed that clients would continue to access treatment in a timely manner as well as utilized average costs and assumed that all clients who receive an unfavourable decision would access mental health treatment for the full two years. This costing methodology was determined to be the most reliable method and should cover the potential that some clients may now access mental health treatment earlier.
Benefits
The monetized benefit is estimated at $6.5 million. Despite the cost of the proposed amendments, this initiative would result in an overarching benefit of improved access to coverage for a range of benefits, some which could not be monetized or quantified at this time due to data limitations or, because it is not possible to place a value on certain impacts, such as any improvement in Veterans’ well-being from a mental health perspective. Over time, it is expected that client and expenditure experience would enable further analysis, measurement and forecasting for this initiative. While the quantified impact shows a net cost, the qualitative benefits are significant and justify the proposal.
Veterans
There would be a positive effect on Veterans, with improvement to their health as a result of having immediate coverage for mental health treatment and services. With the implementation of the initiative, Veterans would be eligible for the mental health treatment benefits and services they need. The initiative would assist the Veteran in accessing coverage for supports as quickly, and as early, as possible for certain eligible mental health conditions. Veterans would be more resilient, and be physically and mentally well. It is anticipated that Veterans would be satisfied with the services they receive.
Families of Veterans
There would be a positive effect on families, given the expected improvement to the well-being of Veterans stemming from their ability to access earlier coverage for treatment for certain mental health conditions.
Costs
Government of Canada
All direct costs would be incurred by the Government of Canada. The total government cost for the regulatory amendments is estimated at $40.7 million in constant 2021 dollar terms over 10 years. The government cost includes operating costs of $34.2 million (PV) (including contracting costs) and program costs of $6.5 million (PV).
Cost-benefit statement
- Number of years: 10 years (from 2021–2022 to 2030–2031)
- Base year for costing: 2021
- Present value base year: 2021
- Discount rate: 7%
| Impacted stakeholder | Description of cost | First year 2021–2022 | Other relevant years 2022–2030 |
Final year 2030–2031 | Total (present value) |
Annualized value |
|---|---|---|---|---|---|---|
| Government | Operating costs (includes contract costs) | $6.3 | $25.7 | $2.1 | $34.2 | $4.87 |
| Program costs (cash profile) | $0 | $5.9 | $0.6 | $6.5 | $0.93 | |
| All stakeholders | Total costs | $6.3 | $31.7 | $2.7 | $40.7 | $5.79 |
Monetized benefits (millions of dollars)
Although the Mental Health Benefits would result in reimbursement for treatment provided to CF Veterans, which contributes to improving their overall well-being, this benefit has not been monetized. Instead, the program costs related to the regulatory amendments that would create this new benefit have been used as a direct proxy, given the program costs would be the amount reimbursed to CF Veterans for mental health treatment and services (for favourable decisions). It is noted as “savings/financial security” under monetized benefits, as it is assumed that if Veterans did not have to pay out-of-pocket for mental health treatment and services, it would provide comfort, and they could save the money or spend the money on necessities such as food and/or shelter.
| Impacted stakeholder | Description of benefit | Base year 2021–2022 |
Other relevant years 2022–2030 |
Final year 2030–2031 |
Total (present value) |
Annualized value |
|---|---|---|---|---|---|---|
| Veterans | Savings/financial security | $0.0 | $5.9 | $0.6 | $6.5 | $0.93 |
| All stakeholders | Total benefits | $0.0 | $5.9 | $0.6 | $6.5 | $0.93 |
| Impacts | Base year 2021–2022 |
Other relevant years 2022–2030 |
Final year 2030–2031 |
Total (present value) |
Annualized value |
|---|---|---|---|---|---|
| Total costs | $6.3 | $31.7 | $2.7 | $40.7 | $5.79 |
| Total benefits | $0.0 | $5.9 | $0.6 | $6.5 | $0.93 |
| NET IMPACT | ($6.3) | ($25.7) | ($2.1) | ($34.2) | ($4.87) |
| Group | Benefits | |
|---|---|---|
| Veterans | Early access to coverage for mental health treatment and services | According to the costing, 27 000 Veterans are estimated to access this initiative over the first 10 years (both favourable and unfavourable decisions on disability benefits applications). |
| Group | Benefits |
|---|---|
| Veterans | 1. Support Veterans well-being domains such as the ones for health, purpose and finances:
2. Demonstrates the Department’s recognition of their service and their need for early access to coverage for treatment for certain mental health conditions. |
| Families of Veterans | Positive effect on families, such as a decrease in stress, given the expected improvement to the well-being of Veterans due to the ability to access early coverage for treatment for mental health condition. |
| Group | Costs |
| Veterans | Restriction in access to health care services due to limited provincial capacity of each province to provide care. Even if Veterans have coverage for health care, there is the issue with access to health care services as there are not enough health care professionals or they are just too busy. |
| Health Care Providers/Community | Strain to the health care system — Canada’s public mental health services are under-resourced with long wait times for access. |
| Veterans’ organization | This group may have the perception of unfairness that no uptake is anticipated by war service Veterans, however, should they apply they would be eligible if their service was with the CF/CAF. |
Sensitivity analysis
The sensitivity scenario assumes a variation in average cost per recipient. The average cost for recipients of the Mental Health Benefits was assumed to be the same as the average cost of current treatment for recipients who fit the eligibility criteria of the new Mental Health Benefits. If the average cost for Veteran recipients of the Mental Health Benefits differs from that of current recipients, the result would be a variation in the estimated cost.
The table below summarizes the 10-year program costs of the Mental Health Benefits if average costs per recipient were to be 2% higher than forecasted as well as if average costs were 2% less than forecasted. A fluctuation in average costs was considered for the sensitivity scenario since existing data from VAC clients was leveraged to accurately estimate usage for clients accessing this benefit. It was found that treatment benefit expenditures vary little by fiscal year and a 2% variance provided an adequate sensitivity scenario.
| Average costs | Forecast 2021–2022 |
Forecast 2022–2023 |
Forecast 2023–2024 |
Forecast 2024–2025 |
Forecast 2025–2026 |
Forecast 2026–2027 |
Forecast 2027–2028 |
Forecast 2028–2029 |
Forecast 2029–2030 |
Forecast 2030–2031 |
Total 10 year |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Average cost 2% higher | N/A | $0.5 | $1.1 | $1.1 | $1.1 | $1.1 | $1.1 | $1.1 | $1.1 | $1.1 | $9.4 |
| Discounted (7%) — Average cost 2% higher | N/A | $0.5 | $0.9 | $0.9 | $0.8 | $0.8 | $0.7 | $0.7 | $0.6 | $0.6 | $6.7 |
| Average cost 2% lower | N/A | $0.5 | $1.0 | $1.1 | $1.1 | $1.1 | $1.1 | $1.1 | $1.1 | $1.1 | $9.0 |
| Discounted (7%) — Average cost 2% lower | N/A | $0.5 | $0.9 | $0.9 | $0.8 | $0.8 | $0.7 | $0.7 | $0.6 | $0.6 | $6.4 |
Net present value (NPV) sensitivity scenario
A sensitivity scenario was completed assuming different discount rates for present value calculations. The following tables detail how the present value of costs and benefits would differ assuming a discount rate three percentage points lower (4%) or three percentage points higher (10%).
| Impacts | Base year 2021–2022 |
Other relevant years 2022–2030 |
Final year 2030–2031 |
Total (present value) |
|---|---|---|---|---|
| Total costs | $6.3 | $35.5 | $3.5 | $45.3 |
| Total benefits | $0.0 | $6.8 | $0.8 | $7.5 |
| NET IMPACT | ($6.3) | ($28.7) | ($2.7) | ($37.8) |
| Impacts | Base year 2021–2022 |
Other relevant years 2022–2030 |
Final year 2030–2031 |
Total (present value) |
|---|---|---|---|---|
| Total costs | $6.3 | $28.5 | $2.1 | $36.9 |
| Total benefits | $0.0 | $5.3 | $0.5 | $5.7 |
| NET IMPACT | ($6.3) | ($23.2) | ($1.6) | ($31.1) |
Small business lens
The small business lens analysis concluded that the proposed Mental Health Benefits would have no associated impact on small business, as they do not impose any administrative or compliance costs on businesses.
One-for-one rule
The one-for-one rule does not apply to the proposed Mental Health Benefits, as there are no incremental changes in administrative burden imposed on businesses.
Regulatory cooperation and alignment
The proposed Mental Health Benefits would not directly relate to any domestic or international agreements or obligations.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required. The preliminary scan indicates that the proposed Benefits and implementation should be negligible. The process would be administrative in nature and would not result in considerable positive or negative impacts to the environment. There are no concerns related to Canada’s Federal Sustainable Development Strategy (FSDS) or public interest.
The ability to conduct all administrative functions electronically and to support virtual care and treatment methodologies contributes positively to the Government of Canada’s goals for 2030 and its 2050 net-zero emission targets.
Gender-based analysis plus
Veterans Affairs Canada uses the gender-based analysis plus (GBA+) to better understand the needs of underrepresented subgroups of the Veteran population. Research conducted by VAC in collaboration with Statistics Canada and DND demonstrates that mental health conditions are much more prevalent among Regular Force Veterans than among an age and sex standardized group of other Canadians. In many cases the prevalence is twice as high and in the case of PTSD, the prevalence is over 10 times higher.
Best practice in the treatment of mental health conditions requires early treatment intervention for the best possible health outcomes for individuals. Providing earlier access to counselling and treatment to Veterans from health professionals of their choice, and access to pharmaceuticals should have a measurable impact for Veterans and their families.
The target client group would be Veterans of the CF residing in Canada who have applied for disability benefits from VAC for a mental health condition. In Canada, as of March 31, 2020, the estimated Veteran population is 629 300. Of this, approximately 119 119 (19%) are clients of the Department. Approximately 106 744, or 90%, of clients are CF Veterans. Female Veterans account for approximately 12% of the VAC Veteran clientele.
Veterans Affairs Canada’s LASS is a longitudinal program of research that identifies Veteran population issue and provides valuable information on trends and areas of potential needs. Through a review of LASS data, findings suggested that female Veterans may be faring worse than their male counterparts in the domain of mental health. The issue of military sexual misconduct may well be a contributing factor to the unequal distribution of mental health diagnoses among male and female Veterans. Military members are at higher risk than the general Canadian population for sexual assault, and female Regular Force members are over four times more likely than male Regular Force members to report sexual assault. More than any other type of trauma, whether among Veterans or the civilian population, sexual assault presents the highest risk for the development of PTSD.
In September 2018, the Office of the Veterans Ombudsperson released a report that noted that both female and francophone Veterans experienced longer disability benefits applications processing times. In November 2018, a dedicated French unit at VAC was stood up to help address the discrepancy in service standards between French and English claims. Since then, several bilingual teams have been established, and their focus is predominantly on French claims. They have steadily increased their production since then. For applications completed in April 2021, the average turnaround time was 29.2 weeks for male applications, 35.2 weeks for female applications. In June 2020, the department released a strategy to address the long-standing issue of the processing times for disability benefits applications. The strategy outlines many initiatives to reduce processing times. In October 2021, VAC also stood up a team focused solely on processing disability benefits applications from women. A GBA+ lens is being applied to initiatives to ensure all applications are treated and processed equitably.
Currently, VAC does not keep data on the numbers of Veterans who are Indigenous or visible minorities. However, research indicates that among the general Canadian population, Indigenous persons and visible minorities are at increased risk of social exclusion. A number of Indigenous and visible minority Canadian Veterans have testified to a culture of racism in the CF that affected their mental health.
Further research is needed to understand the differences between male and female Veterans including intersecting factors (additional identities such as sexual orientation, ethnicity, race and culture).
This proposal would contribute to Canada’s Gender Results Framework in the area of improved mental health and well-being outcomes in supporting the outcome for the proportion of adults who have high psychological well-being. The Government of Canada, through this proposal, is being more proactive and offering Veterans access to early intervention for mental health conditions while they await a decision on their application for disability benefits.
No GBA+ impacts have been identified for this proposal. VAC remains committed to monitoring and ensuring any gaps related to GBA+ are identified and mitigated when delivering programs and services to our Veteran community.
Implementation, compliance and enforcement, and service standards
Implementation
The implementation of the Mental Health Benefits is tentatively scheduled for April 1, 2022. Any disability benefits applications for anxiety disorders, depressive disorders, and/or trauma — or stressor-related — disorders that are received prior to April 1, 2022, for which decisions are pending on that date, would be eligible for the initiative. For disability benefits applications where an entitlement decision is made prior to April 1, 2022, the person would not be eligible for the initiative.
The Mental Health Benefits would provide coverage for prescribed pharmaceuticals and treatment services in accordance with Part 1 of the VHCR. Benefits to Veterans would allow for coverage of costs for eligible mental health benefits under VAC’s Health Care Program of Choice 10 (POC 10 Prescription Drugs — with the exception of cannabis for medical purposes) and a limited list of benefits under Program of Choice 12 (POC 12 Related Health Services). Supplementary Benefits (health-related travel) are not covered under the initiative.
A disability benefits application for an eligible mental health condition is required. The approval process includes ensuring that the Veteran’s identification service dates and/or service number are stated, and confirmation that Veteran does not have coverage as a former member of the Canadian Armed Forces, or in their province/territory of residence for the mental health condition being claimed. The Veteran is required to attest to the truthfulness of the application and a signature (paper or digital) is required accordingly. After completion of the above steps, the Veteran would be deemed eligible. This process is automated without human intervention, with the exception of a paper application, and the Mental Health Benefits would begin with immediate effect. Incomplete applications would not be processed until such time as the information is received.
Medavie Blue Cross (MBC), VAC’s third-party contractor, would play a pivotal role in moving eligibility to actual participation in the initiative. Once MBC receives confirmation of eligibility, it would provide the benefit card to the Veteran with instructions on how to use it. MBC would administer the payments in accordance with business rules established by VAC, which include maximum rates, frequencies, and prescriber requirements. These business rules would be identical to those applied for Veterans with approved disabilities.
Coverage is approved under the provisions of the Mental Health Benefits while an entitlement decision is pending on the application for disability benefits and would continue to be paid for two years even in a circumstance where the entitlement for disability benefits is not awarded. Veterans would have the same access to redress for decisions made under the Mental Health Benefits as they do for the Treatment Benefits program. Veterans would be able to apply for up to two levels of review if they are dissatisfied with any decision made regarding Mental Health Benefits.
Program performance including their diversity considerations would be measured by utilizing various mechanisms such as the Departmental Results Framework, VAC facts and figures, audit and evaluation, the ombudsperson’s office, Statistics Directorate and National Client Survey. The VAC Audit and Evaluation Division prepares multi-year, risk-based audit and evaluation plans.
The plans are reviewed and updated annually. The Mental Health Benefits would be considered part of the regular evaluation planning on a go-forward basis. In addition, the LASS program of research would continue to monitor Veteran health and well-being, disaggregated by known demographic factors, from a population health perspective.
The amendments to the Regulations would come into force on the day on which they are registered.
Compliance and enforcement
In cases where it is determined that an applicant has knowingly submitted a misleading disability benefits application (the application used for the Mental Health Benefits), the application would be immediately withdrawn from the process and the individual informed in writing of this fact. If reimbursements or payments have already been made to the individual or health care providers, VAC may seek restitution from the individual. VAC has the authority to address the overpayments by way of recovery or remission.
VAC will continue to be open and transparent about the status of mental health supports and the roll-out of the Mental Health Benefits. This will help mitigate negative reactions stemming from adjusted timelines or other factors. Social media posts, detect and correct monitoring, and frontline staff Q&As will help counter misinformation that occasionally circulates on social media and in the press.
This proposal would likely result in increased satisfaction with the services and benefits that Veterans receive from VAC, given that Veterans and stakeholders regularly observe that the wait of up to two years for an approved disability claim is a barrier to seeking mental health treatment.
Service standards
There would be no service standards for the Mental Health Benefits. The coverage would be automatic once a Veteran submits a disability benefits application for an eligible mental health condition and has no coverage from another source for the claimed condition. In cases where a Veteran has access to coverage under a provincial or territorial health plan or any other coverage as a former member of the CF, then VAC would be second payer. This initiative would be made available until a decision on disability entitlement is made. VAC has published service standards, available on its website.
Contact
Julie Thorpe
Director
Cabinet Business Unit
Strategic Oversight and Communications
Department of Veterans Affairs
P.O. Box 7700
Charlottetown, Prince Edward Island
C1A 8M9
Telephone: 403‑415‑5728
Email: Julie.Thorpe@veterans.gc.ca
PROPOSED REGULATORY TEXT
Notice is given that the Governor in Council, pursuant to section 5footnote a of the Department of Veterans Affairs Actfootnote b, proposes to make the annexed Regulations Amending the Veterans Health Care Regulations.
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Julie Thorpe, Director, Cabinet Business Unit, Strategic Oversight and Communications, Veterans Affairs Canada, P.O. Box 7700, Charlottetown, Prince Edward Island C1A 8M9 (email: cabinetbusinessunit-unitedinformationducabinet@veterans.gc.ca).
Ottawa, December 16, 2021
Wendy Nixon
Assistant Clerk of the Privy Council
Regulations Amending the Veterans Health Care Regulations
Amendments
1 (1) The definition dual service veteran in section 2 of the Veterans Health Care Regulationsfootnote 3 is repealed.
(2) Paragraph (a) of the definition client in section 2 of the Regulations is replaced by the following:
- (a) veteran pensioner, income-qualified veteran, overseas service veteran or veteran to whom paragraphs (a) and (b) of the definition Canada service veteran apply,
(3) Paragraph (b) of the definition entitled to a disability award in section 2 of the Regulations is replaced by the following:
- (b) has not received a disability award as defined in subsection 2(1) of that Act because one of the conditions set out in section 53 of that Act as it read immediately before April 1, 2019 had not been met as of that day, unless a decision regarding the application for pain and suffering compensation referred to in subsection 174(1) of the Budget Implementation Act, 2018, No. 1 has been made, or
(4) Clause (g)(ii)(D) of the definition veteran in section 2 of the Regulations is replaced by the following:
- (D) the cost of chronic care in a community facility pursuant to paragraph 22.1(1)(b), or
2 Paragraph 3(6)(a) of the Regulations is amended by adding “and” at the end of subparagraph (ii) and by repealing subparagraph (iii).
3 The portion of section 6 of the Regulations before paragraph (a) is replaced by the following:
6 A client who receives treatment benefits referred to in paragraph 4(a) or (b) under section 3, and a client referred to in paragraph 3(3)(a) or any of subsections 3(4) to (7) who receives those benefits as an insured service under a provincial health care system, are eligible to receive supplementary benefits as follows:
4 (1) Paragraph 7(2.1)(a) of the Regulations is replaced by the following:
- (a) are payable at the rate established for employees of the public service of Canada in Appendix B of the Travel Directive of the National Joint Council, as amended from time to time, plus two cents per kilometre; and
(2) Subsection 7(2.2) of the Regulations is replaced by the following:
(2.2) The costs of travel referred to in subsections (1) and (2) are payable at the same rates, less any minimum rates that apply, as those established for employees of the public service of Canada in Appendices C and D of the Travel Directive of the National Joint Council, as amended from time to time.
5 The Regulations are amended by adding the following after section 13:
Mental Health Benefits
14 The following definitions apply in sections 14.1 to 14.5.
- Canadian Forces
- means the armed forces referred to in section 14 of the National Defence Act, and includes any predecessor naval, army or air forces of Canada or Newfoundland. (Forces canadiennes)
- disability benefits
- means
- (a) a pension awarded under section 21 of the Pension Act on account of a disability; or
- (b) pain and suffering compensation paid under subsection 45(1) of the Veterans Well-being Act. (prestations d’invalidité)
- mental health benefits
- means the benefits referred to in section 14.2. (avantages pour la santé mentale)
- mental health client
- means a person who meets the requirements of section 14.1. (client en santé mentale)
- mental health condition
- means one or more of the following psychiatric conditions:
- (a) an anxiety disorder;
- (b) a depressive disorder;
- (c) a trauma-and-stressor-related disorder. (trouble de santé mentale)
14.1 A former member of the Canadian Forces who is resident in Canada is eligible to receive mental health benefits in Canada in respect of any mental health condition for which they submit an application for disability benefits, to the extent that those benefits are not available to them as a former member of the Canadian Forces nor available as an insured service under a provincial health care system.
14.2 Mental health benefits consist of the following:
- (a) any examination or treatment provided by a psychologist, mental health counsellor or therapist, social worker or any other professional approved by the Minister; and
- (b) pharmaceuticals prescribed by a physician or other person authorized to prescribe pharmaceuticals under the laws in force in the province where the pharmaceuticals are provided.
14.3 The rate at which mental health benefits and any related administrative costs are payable is
- (a) where the mental health benefits are fully insured health services of the province in which they are provided, the rate established by the province for those services and costs;
- (b) where the mental health benefits are not fully insured health services of the province in which they are provided and, in respect of that province, an association of health professionals has adopted a fee schedule for treatment benefits and costs, the rate that is approved by the Minister and that is based on that fee schedule; and
- (c) in any other case, the rate normally paid for those mental health benefits and costs in the community in which the mental health benefits are provided.
14.4 (1) A mental health client becomes eligible to receive mental health benefits
- (a) on April 1, 2022, for an application for disability benefits that the Minister received, but for which a determination was not made, before that date; or
- (b) on the day on which the Minister receives their application for disability benefits, for an application received on or after April 1, 2022.
(2) Despite subsection (1), if a person who does not meet the requirements of section 14.1 submits an application for disability benefits, they are eligible to receive mental health benefits beginning on the day on which they become a mental health client.
14.5 Despite section 31, a mental health client ceases to be eligible to receive mental health benefits
- (a) if the Minister makes a favourable decision respecting their application for disability benefits, on the day on which the decision is made;
- (b) if the Minister makes an unfavourable decision respecting their application for disability benefits, two years after the applicable day determined under section 14.4 or, if the Minister makes the decision after that day, on the day on which the decision is made; or
- (c) if the Minister makes a decision that their application for disability benefits has been withdrawn, two years after the applicable day determined under section 14.4 or, if the Minister makes the decision after that day, on the day on which the decision is made.
6 Paragraph 15(4)(a) of the French version of the Regulations is replaced by the following:
- a) il a fait une demande au ministre en vue d’occuper un lit réservé, mais il s’est vu refuser sa demande en raison de la non-disponibilité de lit réservé à une distance raisonnable de la localité où il réside habituellement;
7 Paragraph 18(1)(c) of the Regulations is repealed.
8 (1) The portion of paragraph 20(1)(a) of the Regulations before subparagraph (ii) is replaced by the following:
- (a) for home care, $11,531.06 per client per year, which amount includes
- (i) a maximum amount of $1,608.97 per year for maintenance of the grounds of the client’s principal residence, and
(2) Paragraphs 20(1)(b) to (e) of the Regulations are replaced by the following:
- (b) for ambulatory health care, $1,340.82 per client per year;
- (c) for transportation, $1,608.97 per client per year;
- (d) for home adaptations, $6,597.30 per client per principal residence; and
- (e) for intermediate care, $161.55 per client per day.
(3) Subsection 20(1.1) of the Regulations is replaced by the following:
(1.1) Subject to section 34, the maximum rate at which the costs of veterans independence services referred to in section 16.1 are payable is $3,114.70 per year, which amount includes the adjusted maximum amount referred to in subparagraph 20(1)(a)(i) per year for maintenance of the grounds of the client’s principal residence.
9 (1) Subsection 21(1) of the Regulations is amended by adding “and” at the end of paragraph (b), by striking out “and” at the end of paragraph (c) and by repealing paragraph (d).
(2) Subsection 21(2) of the French version of the Regulations is replaced by the following:
(2) Sous réserve de l’article 33.1, le client qui, le 31 août 1990, recevait des soins institutionnels pour adultes, des soins intermédiaires ou des soins prolongés dans un établissement du ministère, au sens du présent règlement dans sa version en vigueur le 1er septembre 1990, ou qui occupait un lit réservé, est admissible à recevoir des soins lorsqu’il occupe un lit réservé après le 31 août 1990 tant qu’il a besoin, sans interruption, de ces soins.
10 Section 21.2 of the French version of the Regulations is replaced by the following:
21.2 Sous réserve de l’article 33.1, l’ancien combattant ayant servi outre-mer qui a fait une demande au ministre en vue d’occuper un lit réservé, mais qui s’est vu refuser sa demande en raison de la non-disponibilité de lit réservé à une distance raisonnable de la localité où il réside habituellement, est admissible au paiement de ce qu’il lui en coûte pour obtenir des soins intermédiaires ou des soins prolongés dans un établissement communautaire, dans la mesure où il ne peut les obtenir au titre de services assurés dans le cadre du régime d’assurance-maladie d’une province.
11 Paragraph 22.1(1)(c) of the Regulations is repealed.
12 Subsection 23(1) of the Regulations is replaced by the following:
23 (1) Subject to section 34, the maximum rate at which the cost of chronic care in a community facility other than in a contract bed is payable is $271.07 per client per day, as adjusted in accordance with subsection (2).
13 (1) Paragraph 24(1)(c) of the Regulations is replaced by the following:
- (c) third, to overseas service veterans; and
(2) Paragraph 24(2)(c) of the Regulations is replaced by the following:
- (c) third, to overseas service veterans; and
14 Paragraph 30(b) of the Regulations is replaced by the following:
- (b) if in receipt of acute care in a hospital, a veteran pensioner, a civilian pensioner, a Newfoundland Special Award pensioner, a Red Cross pensioner, a flying accident pensioner, an income-qualified veteran, an income-qualified civilian, a Canada service veteran, a special duty service pensioner, a military service pensioner and a former member or reserve force member who is entitled to a disability award or entitled to pain and suffering compensation.
15 (1) The portion of subsection 33.1(4) of the Regulations before paragraph (a) is replaced by the following:
(4) The maximum monthly accommodation and meal charge for any of the 12 months after September 30 of a year is the lesser of the following amounts:
(2) Subsection 33.1(8) of the Regulations is replaced by the following:
(8) For the period beginning on October 1, 2021 and ending on September 30, 2022,
- (a) the maximum monthly accommodation and meal charge is $1,091.43 per month; and
- (b) the amount for personal comforts is $263.62 per month.
16 Section 38 of the Regulations is repealed.
Coming into Force
17 (1) Subject to subsection (2), these Regulations come into force on the day on which they are registered.
(2) Section 5 comes into force on April 1, 2022, but if these Regulations are registered after that day, that section comes into force on the day on which these Regulations are registered.