2022 Federal Budget – Implications for Group Insurance Plans

Retirement and Benefits

Issue 22-09

Thu, 04/14/2022 - 13:09

The most recent Federal Budget tabled on April 7, 2022, included certain measures that could have an impact on Group Insurance Plans.

Below is a summary of these various measures.

Dental Care

The budget provides for funding of up to $5.3 billion over 5 years to provide dental care to eligible Canadian citizens. The plan will be available to families with an annual income of less than $90,000 and individuals with an annual income of less than $70,000.

This will be done in 3 phases:

In 2022, the plan will be available for children under the age of 12.
In 2023, the plan will be extended to those under 18, people with disabilities and seniors.
In 2025, all provisions of the plan will be implemented.

In Quebec, dental care is already covered by the Régie de l'assurance maladie du Québec (RAMQ) for children under the age of 10. Note that the coordination of this plan with provincial plans such as the RAMQ as well as with private plans has not yet been disclosed.

Prescription Drug Insurance

The budget reiterates the Federal Government's intention to establish a National Pharmacare program. To accomplish this, a draft bill will be tabled by the end of 2023.

We invite you to read our August 2019 publication on Final Report of the Advisory Council on the Implementation of National Pharmacare Recommendations.

Employment Insurance

Employment Insurance sickness benefit can currently provide up to 15 weeks of financial assistance to people who cannot work for medical reasons. When the 2021 Federal Budget was tabled, it was proposed to increase the duration of this benefit to 26 weeks. The 2022 Federal Budget reconfirms this measure with an implementation for the summer of 2022.

This new measure may have implications for Employment Insurance premium reduction programs as well as some disability insurance plans which may need to be reviewed. Details are currently unknown.

Taxation for Life Insurers Groups

The 2022 Federal Budget also includes a tax rate increase for life insurers. This increase will have an impact on the life insurers profitability, who could in return pass on the bill to their customers through an increase in applicable fees to group insurance plan premiums.

Expansion of Medical Expenses Recognized for Tax Credit Purposes

The 2022 Federal Budget also proposes to expand the definition of eligible medical expenses for tax credit purposes. Medical expenses relating to a surrogate mother or a sperm, ova or embryos donor will now be eligible medical expenses for tax credit purposes.

This extension will allow group insurance plans to cover these costs.

This document is a summary, analysis and/or commentary made according to our understanding of an event. We take no responsibility for any use made by a third party.