Benefits Canada has commented that the Budget included the end to Health and Welfare Trusts by 2021.
What is a Health & Welfare Trust, also known as Cost Plus?
A Health & Welfare Trust program allows plan sponsors to provide their employees with additional health and dental coverage not generally offered under existing Group Benefits plans. If the plan qualifies as a Private Health Services Plan (PHSP) under the Income Tax Act, the full amount of the claim and administration fee are deductible business expenses.
In addition, if reimbursing medical and dental expenses is part of the contract between the plan sponsor and plan members, the cost of claims becomes a non-taxable benefit for plan members. Plan sponsors must be aware that special tax rules apply to claims submitted for business owners and shareholder-managers.
To find out if this will affect your Employee Benefit Program, please contact Glendinning Insurance Services, your Resource Specialist.