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 [email protected]