CLHIA says taxing health benefits would raise health care costs for Canadians

By The IJ Staff | May 25 2018 01:30PM

The Canadian Life and Health Insurance Association (CLHIA) says a report released May 24 by the Parliamentary Budget Officer (PBO) on the taxation of employer-provided health benefits is based on assumptions “that do not reflect the true picture of health benefits in Canada today.”

"Taxing health benefits would raise health care costs for low and middle-income earners dramatically and put their highly valued benefits plans at risk," states Stephen Frank, CLHIA's President and CEO.

$2.8 billion increase in tax receipts

The report says that taxing these benefits would increase federal personal income tax receipts by $2.8 billion. It also says that the “majority of the new tax burden would be borne by high-income individuals, since they are the people most likely to work in jobs that provide such benefits.”

Franks says that taxing health benefits would not only hurt the rich as the report claims. “Millions of low and middle- income Canadians currently covered by employer sponsored plans would see their costs for health care rise dramatically," he says.

Many employers would drop coverage

The CLHIA says more than 13 million Canadian workers are covered by employer-sponsored plans and, with their families, this means that more than 25 million Canadians use these plans to help pay for prescription drugs, dental and eye care, physiotherapy, etc. "The PBO assumptions do not take into account the past experience in Canada that many employers would drop coverage and millions of Canadians would lose access to the benefits they depend on," says Frank.

To learn more, consult the report on the PBO’s website.

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