June 01, 2018
Ottawa should beware the unintended consequences of taxing workplace health plans
A decision to tax health benefits would ripple through the whole tax system, affecting everything from child benefits to old age security
One of the perks of being an employee is the ability to participate in your employer’s group health and dental insurance plan. It’s a particularly attractive employment benefit because, under our tax rules, employees are neither taxed on the value of benefits they receive from the plan nor are they taxed on their employer’s tax-deductible contributions to the plan.
But a new report out last week by the Parliamentary Budget Officer (PBO) estimated that if the government were to treat employer-paid health plans as a taxable employment benefit, it would increase federal personal income tax revenues by $2.8 billion.