Updates to Group Insurance

Group Insurance Plans

2012 has seen a number of changes to your group insurance plan that you should be aware of.

Taxation

Disability premiums have been an employee paid benefit (or a taxable benefit if paid by the employer) for many years.  In 2012, the CRA changed the rules for Life and AD & D (Accidental Death and Dismemberment) benefits.  They are also now a taxable benefit if paid by the employer. However, the health and dental premiums still are not a taxable benefit.  That is why if the employee and employer share the cost of the benefit, the employee pays the life, AD & D and disability premiums and the employer pays a larger percentage of the health and dental premiums. 

For more information  check out this publication on the CRA web site on taxable benefits.  

If you are an employer, bookkeeper or accountant pages 40 and 41 includes a table that summarized all the information, including which benefits you need to deduct CPP and EI or include the GHT / HST and what code to use on any T4s that you need to issue.

Travel Insurance

In December 2012, Manulife and Desjardin clarified  the rules for out of province travel insurance and many of the other insurance companies will be making similar clarifications to their plans in the future.  The issue is pre-existing conditions and whether they are stable.

Individual travel plans have a clause that states that pre-existing conditions are covered if they are stable for 90 to 180 days (depending on the age of the client).  Snowbirds are aware of this clause and see their doctors as soon as they arrive back home, so should there be a change in their medications, they qualify for travel insurance the next winter. 

The insurance companies consider a condition to be not stable should there be any change to the medications you use or should you visit the doctor because of an issue related to that condition.  Note – you would be covered for anything not related to that condition.

Until recently, if you were on a group plan that had travel insurance coverage, you were exempt from that stability – but that is changing.  If you plan to travel and have had any changes to your medications, you should check witn your insurance company to see if you are covered.

The Toronto Star ran an article on travel insurance just before Christmas.  In November 2012, they also ran an article on 10 things you need to know about travel insurance that you may want to read as well.