Can an employer limit drug plan reimbursement to only the
lowest-cost generic version of a prescribed medication if the
collective bargaining agreement only references “generic
substitutes”? In Hydro One Inc. v. The Society of
United Workers (2025 CanLII 29943 (ON LA)), Arbitrator
John Stout held that Hydro One's implementation of a
“lowest-cost generic” reimbursement policy was
inconsistent with the collective agreement.
Background
The Society filed a policy grievance after it learned that Hydro
One's claims administrator, Green Shield Canada (GSC), had
been reimbursing certain prescription drugs only up to the cost of
the lowest-priced generic alternative. This meant that employees
had to pay the difference between the cost of the lowest-priced
generic alternative and the cost of the higher-priced generic they
purchased, even when the higher-priced generic had been prescribed
by a physician. The grievance focused on whether Hydro One's
health and dental benefits
