Over the Wire: Fall 2017

Advantages of Being a Plan Member of the Health and Welfare Fund

Plan Members have been utilizing the benefits of the Health and Welfare Fund for the past 46 years. You and your Beneficiaries have appreciated the drug, dental, vision and supplementary health care benefits but are you aware that an Employee’s participation in a Health and Welfare Fund is on a before tax basis? Substantially all of your health benefits obtained through the Health and Welfare fund are tax-free. It is only the disability and life insurance portion of the premiums that are considered taxable benefits by the Canada Revenue Agency.

If you did not have coverage in the Health and Welfare Fund you may have chosen to obtain these benefits by buying a private policy. In order to do so you would have used your personal funds on which you have already paid tax, on average at about 30%. In Canada there is a tax credit granted for medical expenses and this does include premiums paid for health benefits. You should be aware that to qualify for this tax credit your total medical expenses must be more than 3% of your net income or $2,237, whichever is less. The tax credit of 15% is available on the remainder of your medical expenses including health premiums. This is much less than the 30% tax you paid on the money you used to pay for the premiums.

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