HR needs to know: Premiums under a private health services plan

What are your tax requirements for health plans? And how different is Quebec? HRM’s payroll expert reviews the basics.

HR needs to know: Premiums under a private health services plan

As an employer, do you make contributions to a private health services group plan (such as medical and dental plan) for employees outside of Québec?

What is the difference for employees in Québec? 

When an employer makes contributions to a private health services group plan (such as medical and dental plans) for employees outside of Québec, there is no taxable benefit to the employees and no requirement to report this benefit on a T4 slip.

Instances where employer paid premiums does constitute a taxable benefit for the employee are:

  • a non-group plan or reimbursing the employee for the premium;
  • a group life insurance plan (term or other);
  • group insurance sickness or accident insurance plans (AD&D and Critical illness)

These taxable benefits are to be reported on the T4.

For employees in Québec, the contributions an employer pays under one of the following group insurance plans for the coverage that a current, past or future employee receives during the year constitute a taxable benefit for the employee:

  • a private health services plan;
  • a group life insurance plan (term or other);
  • all other group insurance plans, except plans covering total or partial loss of income from an office or employment.

These taxable benefits are to be reported on the RL1.

By Natasha Smyth, B.SC.(Agr.), CPM
For more information, contact Info@onpayroll.ca

 

Free newsletter

Our daily newsletter is FREE and keeps you up-to-date with the world of HR. Please complete the form below and click on subscribe for daily newsletters from HRD Canada.

Recent articles & video

How can leaders be fit for the future?

The top 5 reasons your employees are stressed

Court of Appeal confirms employer hardball tactics support $125K in extraordinary measures

How to offer a stellar employee recognition program

Most Read Articles

Marijuana and the workplace: The main misconceptions laid bare

The top 5 reasons your employees are stressed

Is your organization making this killer diversity mistake?