Health Care - prevention

Health Overview

The cost of the benefit is tax deductible to the employer and claim payments are non-taxable for employees. This is one of the few tax-effective methods of compensation remaining.

Some provinces charge retail sales tax on the cost of health benefits (9% PQ, 8% ON). Some provinces charge insurance premium tax on the cost of health benefits (2% ON) even if no insurer or third party administrator is involved .

The traditional approach is to define what products and services are covered and to what extent (deductible, coinsurance, maximum). The out-of-country coverage is often insured, and the risk for the medical and dental benefits are spread among the employees. Tension arises when the plan sponsor tries to control claims with plan restrictions while participants try to maximize claims.

A new approach is to define the employer contribution and let the employee decide what products and services to claim.