Employer Contributions to Group Accident Plans Taxable

In the Federal Budget released in March 2012 and the more recent Notice of Ways & Means motion on October 15, 2012, any employer contributions made to group accident and sickness insurance plans will be a taxable benefit to employees.

Contributions made after March 28, 2012 for this coverage that is still in place in 2013 will be taxable to the employee beginning January 1, 2013. This does not apply to contributions made to wage loss replacement plans, such as short and long term disability. However, employer contributions to Accidental Death & Dismemberment as well as Critical Illness (specifically coverage where benefits are paid in a lump sum) are affected.

Pregnancy/Parental Leave Statistics

Statistics Canada released information gathered from parents of 10,810 children gathered in 2010 and 2011. The study reveals that 90% of Canadian children outside of Quebec had working mothers who took some type of leave following the birth of their child. On average, the leave lasted 44 weeks. Only 26% of these children had working fathers who took leaves, with the average leave being 2.4 weeks.

In Quebec, almost 99% of working mothers took some form of leave; on average, the leave lasted 48 weeks. Further, fathers took leave in 76% of cases.

Outside Quebec, 83% of mothers took paid leave while 21% reported some unpaid leave. The average paid leave was 40 weeks, while the average unpaid leave was 4.5 weeks. In Quebec, 97% of mothers took paid leave with 21% reporting some unpaid leave.

To read the study, please refer to http://www.statcan.gc.ca/pub/11-008-x/2012002/article/11697-eng.pdf

Ontario Employer Required To Provide Benefits After Age 65

An Ontario arbitrator has ruled that language in both the collective bargaining agreement and the group insurance contract was not clear enough and the employer is obligated to provide benefits to employees past age 65. In this case, the employer referred to the actual policy for the terms and conditions, including limitations on age. Such limitations are allowed under the human rights law in both Ontario and British Columbia, under the right circumstances.

The case highlights the need to review employment agreements, collective bargaining language and group benefit contractual provisions now that mandatory retirement has been outlawed.

For more information, please refer to Municipality of Strathroy vs. Caradoc Police Services Board (2012)

Canadian Pooling Insurance for Drugs

The Canadian Life and Health Insurance Association (CLHIA) and its participating insurers across Canada has established an industry drug pooling arrangement.

Commencing January 1, 2013, all high recurring drug claims will be pooled among participating insurers. In 2013, the threshold will be for claims exceeding $25,000.00.

This coverage applies only to those participating insurers and for organizations with fully insured non-refund Health benefit plans. To qualify, the plan criteria is:

• A deductible lower than $1,100.00 per individual or $2,200.00 per family
• No annual drug maximum or an annual maximum higher than $50,000.00
• A deductible per prescription lower than $35.00

For organizations in Quebec, the provincial drug pooling will take precedent over this arrangement but both will be fully coordinated, e.g. drugs not eligible under the Quebec pooling will be transferred to this arrangement.

This could have a positive effect on the cost of pooling for the plan sponsor and also increases the need to work with an insurer that is part of the arrangement.

For more information on the plan and participating insurers, please refer to www.clhia.ca