ARCHIVED – Budget 2012 - Group sickness or accident insurance plans - Employer contributions
Notice to the reader
This measure has received Royal Assent.
- As an employee, what is changing for the contributions my employer makes in respect of my coverage under a group sickness or accident insurance plan?
- When do these changes apply?
- Are any contributions excluded from these new rules?
- Do these changes affect private health services plans (such as medical or dental plans)?
- Where can I get more information about these changes?
When an employer contributes an amount to a group sickness or accident insurance plan in respect of an employee, a taxable benefit is not currently realized by the employee. To provide fair tax treatment for beneficiaries under group sickness or accident insurance plans, the budget proposes that the amount of the employer's contributions be a taxable benefit for the employee.
Q1. As an employee, what is changing for the contributions my employer makes in respect of my coverage under a group sickness or accident insurance plan?
A1. The budget proposes that the amount of an employer's contributions to a group sickness or accident insurance plan is a taxable benefit and must be included in your income for the year in which the contributions are made.
Q2. When do these changes apply?
A2.These changes apply to contributions made by your employer starting in 2013.
However, if contributions made by your employer after March 28, 2012, and before 2013, relate to your coverage under a group sickness or accident insurance plan after 2012, the contributions will be a taxable benefit and included in your income for 2013.
Q3. Are any contributions excluded from these new rules?
A3. An employer contribution that is in respect of a wage-loss replacement benefit payable on a periodic basis under the plan will continue to be non-taxable.
Q4. Do these changes affect private health services plans (such as medical or dental plans)?
A4. These changes will not affect the tax treatment of private health services plans. If your employer makes contributions to a private health services plan for employees, there is no taxable benefit for the employees.
Q5. Where can I get more information about these changes?
A5. The CRA is committed to providing taxpayers with up-to-date information. The CRA encourages taxpayers to check its Web pages often. All new forms, policies, and guidelines will be posted as they become available.
In the meantime, please consult the Department of Finance Canada's Budget 2012 documents for details.