Over the Wire: September 2020

T4A Slips for Group Term Life Insurance

Effective January 1, 1994, the Canada Revenue Agency (CRA) implemented a taxable benefit for Plan Members who gained coverage through hours worked by a Contributing Employer and qualified for “Group Term Life Insurance”. As a result, the Electrical Industry Insurance Benefit Trust Fund of Alberta began issuing T4A slips to Plan Members in 1994 on the taxable life insurance premiums. Data files are provided to CRA each year confirming all T4A slips issued by the Plan.

Plan Members making self-payments are exempt from paying tax on their Life Insurance premiums as they pay the premiums rather than an Employer.

In 2013, CRA added Accidental Death and Dismemberment (AD&D) premiums as a taxable benefit. Consequently, T4A slips issued for 2013 and subsequent years included the cost of AD&D premiums. There are no Dependent premiums for AD&D benefits, as this benefit is only for Plan Members.

The total amount reported on each yearly Plan Member’s T4A consists of the actual amount of premiums paid to the insurance companies for the eligible Plan Member’s (and their Dependents) life insurance and AD&D benefit. Premium rates can change more than once a year. However, normally the new premium rates take effect on January 1st of each year.

Eligible Plan Members under age 65 on long-term disability may qualify for the waiver of their life insurance premiums (certain rules apply). This is known as “premium waiver.” In 2009, the Board of Trustees increased life insurance coverage for disabled Plan Members on the premium waiver. This ensured that all eligible Plan Members qualify for the same amount of life insurance. Plan Members approved for the premium waiver also receive a T4A for the amount on the “top-up” of the life insurance death benefit to the current amount.

Plan Members who were eligible through hours worked by a Contributing Employer should ensure that they provide a current address to the Fund Office at the beginning of each calendar year. This will guarantee the Plan Member’s T4A slip is mailed to the proper address. Address changes can be made by calling the Fund Office directly to report the new address, or by mail or email.

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