Implications of BC MSP Changes
On February 18th British Columbia’s Finance Minister Michael de Jong delivered the Province’s 2014 Budget. The healthcare component of the Budget is $19.6 billion, and Mr. de Jong advised that the Health Ministry spending will account for 42% of the Provincial Budget by 2016-17.
In light of the increased funding going to health care, the Province is raising the Medical Services Plan premiums as of January 1, 2015. The current and new rates are set out below:
Rate Effective January 1, 2015
|Two person families||$125.50||$130.50||3.98%|
|Families of three or more persons||$138.50||$144.00||3.97%|
The increase in the MSP premiums has implications for employers and employees. Some of the considerations which employers should review are set out below.
Employers need to include the relevant cost increases in their budgets for the year beginning January 1, 2015.
2. Payroll Deductions
Assuming that employees contribute towards the MSP premiums, employers must adjust the amount of the employee deductions.
3. Income Tax
MSP premiums paid by an employer on behalf of an employee constitute a taxable benefit to the employee. This needs to be reflected in the employees’ payroll and tax reporting.
Employees should be advised of the above in advance of the effective date. The content of the communication will depend upon the employer/employee cost-sharing.