Get documents about "RPP BENEFITS INC
Document Sample
Version 3.0 - March 2009
Suite 1550-1100 Melville Street, Vancouver, BC, V6E 4A6
Phone: (604) 683-3656 Fax: (604) 683 – 3677
www.rppbenefits.com
Benefit Administration Reference Manual | Page 1
TABLE OF CONTENTS
CONTACT INFORMATION FOR RPP BENEFITS INC. .............................................................................................................. 1
PURPOSE OF THIS MANUAL ............................................................................................................................................................. 2
WEB SITE RESOURCES ....................................................................................................................................................................... 3
DEDUCTIBILITY & TAXATION OF INSURANCE COVERAGE ................................................................................................ 5
EMPLOYMENT STANDARDS - GOVERNMENT REGULATIONS .......................................................................................... 6
SEVERANCE & TERMINATION - GROUP BENEFITS ADMINISTRATION ........................................................................ 9
EMPLOYMENT ISSUES - GROUP BENEFITS ADMINISTRATION..................................................................................... 11
SAMPLE WAIVER FORMS - GROUP BENEFITS ADMINISTRATION ............................................................................... 15
Employee’s Acknowledgement of Conversion Privilege ............................................................................................... 15
Refusal of Benefits Form ............................................................................................................................................................ 17
Refusal to Apply for Voluntary Excess Coverage.............................................................................................................. 18
HIRING INDEPENDENT CONTRACTORS .................................................................................................................................. 19
B.C. MEDICAL SERVICES PLAN AND FAIR PHARMACARE................................................................................................ 21
Premium Cost.................................................................................................................................................................................. 21
Fair Pharmacare Registration .................................................................................................................................................. 22
Fair Pharmacare Bulletin for Employees............................................................................................................................. 23
B.C. Medical Services Plan Coverage Summary................................................................................................................. 24
Other Services Offered by the B.C. Government ............................................................................................................... 26
CURRENT CONTRIBUTION LEVELS ...................................................................................................................................... 28
Application for E.I. Premium Reduction .............................................................................................................................. 29
E.I. - Maternity and Parental Leave of Absence................................................................................................................. 29
E.I. - Compassionate Care Benefit ........................................................................................................................................... 30
CANADA/QUEBEC PENSION PLAN (CPP/QPP) ..................................................................................................................... 32
OLD AGE SECURITY (OAS) PROGRAM....................................................................................................................................... 33
WORKERS’ COMPENSATION ......................................................................................................................................................... 34
Benefit Administration Reference Manual | Page 2
DYING WITHOUT A WILL ............................................................................................................................................................... 36
PERSONAL INFORMATION PROTECTION AND ELECTRONIC DOCUMENTS ACT .................................................. 38
STATEMENT OF PURPOSE: RPP BENEFITS INC. .................................................................................................................. 40
DISCLAIMER ......................................................................................................................................................................................... 40
DISCLAIMER ......................................................................................................................................................................................... 41
Benefit Administration Reference Manual | Page 3
CONTACT INFORMATION FOR RPP BENEFITS INC.
Our focus at RPP Benefits Inc. is on Employee Group Benefits, Executive benefits and Pension Plans. We are
dedicated to providing professional, reliable advice to our clients about their employee benefit plans and related
matters. Please do not hesitate to contact our office with any questions you may have or service you require.
Suite 1550 – 1100 Melville Street
Vancouver, BC
V6E 4A6
Phone: (604) 683-3656
Fax: (604) 683-3677
Extension # 224
Allan Plausteiner CLU
allan@rppbenefits.com
Extension # 221
Carol Billings, CFP, CLU
carol@rppbenefits.com
The information contained in this manual is for general use and informational purposes only. It
is not intended to be legal advice. You must consult your professional advisor about your
particular circumstances.
Benefit Administration Reference Manual | Page 1
PURPOSE OF THIS MANUAL
A well-run business requires that processes be in place to ensure any aspect of the business is well-managed,
particularly in day-to-day operations where the business owner must delegate responsibilities among staff
members. Finding time to train properly or search out helpful resources can be a challenge.
This manual is focused on the finer points of managing your employee benefits plan. The Plan Administrator
will already have access to written and electronic administration manuals, accompanying forms, and helpful
newsletters, but often these resources are initially scanned then are put in the “reading” pile for “someday”.
A business owner might be surprised to learn that employee benefit plans include possible legal pitfalls for the
employer, particularly in view of an increasingly litigious society, emerging case law, and ever-changing
legislation. This manual is intended to emphasize the potential hazards lurking in benefits administration and
offers some tools to put in place which can manage or eliminate such risks.
The manual offers an additional reference by providing concise overviews of various Government programs,
particularly those which may occasionally be of interest to a Plan Sponsor or Administrator, together with
website links to obtain further information.
Benefit Administration Reference Manual | Page 2
WEB SITE RESOURCES
Human Resources & Social Development Canada www.hrsdc.gc.ca
Canada Customs & Revenue Agency (CRA) www.cra-arc.gc.ca
Consular Affairs: Information & Assistance for Canadians Abroad www.voyage.gc.ca
Government of British Columbia www.gov.bc.ca
Workers Compensation Board www.worksafebc.com
Health Canada www.hc-sc.gc.ca
Non-Insured Health Benefits (NIHB) – For First Nations www.hc-sc.gc.ca
Indian & Northern Affairs Canada www.inac-ainc.gc.ca
Alberta www.health.gov.ab.ca
British Columbia www.gov.bc.ca/health
Manitoba www.gov.mb.ca/health
New Brunswick www.gnb.ca/0051/index-e.asp
Newfoundland & Labrador www.gov.nf.ca/health/Default.htm
Nova Scotia www.gov.ns.ca/health
Ontario www.health.gov.on.ca
Prince Edward Island www.gov.pe.ca/health
Quebec www.ramq.gouv.qc.ca/en/general/plandusite.shtml
Saskatchewan www.health.gov.sk.ca
Benefit Administration Reference Manual | Page 3
Benefits Canada www.benefitscanada.com
Employee Health & Benefit News www.benefitnews.com
CCH Canadian Limited www.cch.ca
Canadian Wellness www.canadianwellness.com
College of Dental Surgeons of BC www.cdsbc.org
Ontario Dental Association www.oda.on.ca
BCE Emergis www.emergis.com
AIG Life of Canada www.aiglife.ca
Desjardins Financial Security www.dsf-dfs.com/en-ca
Empire Life www.empire.ca
Equitable Life www.equitable.com
Great West Life www.greatwestlife.com
GreenShield Canada www.greenshield.ca
Industrial Alliance www.inalco.com
Industrial Alliance Pacific www.iaplife.com
Manulife www.manulife.ca
Pacific Blue Cross www.pac.bluecross.ca
RBC Insurance www.rbcinsurance.com/canada
Standard Life www.standardlife.ca
Sun Life www.sunlife.com
Wawanesa Life www.wawanesalife.com
This manual includes many other links which are subject-specific within the pages of the manual.
View the table of contents for your subject of interest.
Benefit Administration Reference Manual | Page 4
DEDUCTIBILITY & TAXATION OF INSURANCE COVERAGE
Deductible Taxable Income to Deductible by Eligible for Tax Credits to Tax Status to
by Employer Employee Employee Employee Employee/Beneficiary
OAS Yes, for pension benefit
N/A N/A N/A N/A No, for Guaranteed Income Supplement and Allowance
All benefits subject to “clawback”
CPP Yes No No Yes Yes
EI Yes No No Yes Yes
Workers’ Compensation Yes No N/A N/A No
Provincial Medical Services Plans Yes, if paid on behalf of No except
Yes No No
employee Yes, in Quebec (within limits)
Life Insurance N/A N/A No No No
Insured Salary Continuance N/A N/A No No No
Health & Dental Insurance N/A N/A No Yes, as medical expenses No
Life Insurance (Employee and
Yes Yes No No
Dependent) No
Accidental Death &
Yes No No No No
Dismemberment
Insured Salary Continuance
Yes, if the disability
benefits paid out to
Disability payments made to employee are NOT taxable
employee are to be tax free
Yes No No if premium was paid 100% by employee, or if employer-
paid premium was reported as taxable benefit
No, if the disability benefit
payments are to be taxable
Health & Dental Insurance No in B.C. and in most Yes, as medical expenses
Yes No No
provinces
Benefit Administration Reference Manual | Page 5
EMPLOYMENT STANDARDS - GOVERNMENT REGULATIONS
Federally regulated employers and their employees are subject to the Canada Labour Code which has
established minimum standards for employment to define and guarantee employee rights and
responsibilities in the workplace. Typical topics included in the Code would include:
General holidays
Annual vacations
Hours of work
Unjust dismissals
Minimum wage
Layoff procedures
Severance pay
All jurisdictions in Canada have employment standards legislation to dictate the minimum standards that
employers and employees must follow to ensure a minimum of employment standards is upheld. All
industries not covered by the Canada Labour Code will fall under their provincial or territorial legislation.
An employee is covered by the legislation in force where the employee works, regardless of where the
employer is located.
Following are some general rules, with emphasis on British Columbia. You are advised to contact your
local Employment Standard Branch or seek legal advice on specific situations.
www.labour.gov.bc.ca will take you to the British Columbia Ministry of Labour website.
Benefit Administration Reference Manual | Page 6
An employer must provide an employee with reasonable notice of termination. British Columbia and
Federal statutory notice requirements are as follows:
Federal More than 3 months 2 weeks
British Columbia 3 months but less than 12 months 1 week
12 months but less than 3 years 2 weeks
3 years but less than 4 years 3 weeks
1 additional week for each subsequent
4 years or more
year, up to 8 weeks
All jurisdictions have some exceptions to the required statutory notice. For instance, employment
contracts and collective bargaining agreements override the regulations. Requirements change if a large
group of employees is being terminated at the same time or for dismissal with just cause. Seasonal or
construction workers may be subject to different requirements.
There are situations where an employer may be required to provide a longer notice of termination than the
required statutory notice, for example by collective agreement or terms of an employment contract. In
addition court cases in recent years have held that reasonable notice as determined by legislation is not
always sufficient. In specific cases the courts take into account many factors to determine “reasonable”
notice, including:
Employee’s length of service and level of responsibility
State of the job market
Employer’s past practices
Prevailing practice in an Industry
There may be considerable difference between the statutory notice period and the extended notice period
applicable to a specific case.
Benefit Administration Reference Manual | Page 7
There is no rule of law outlining what degree of employee misconduct constitutes “just cause”. There is,
however, a test to be considered: “Did the employee behave in a manner that is not consistent with the
continuation of employment?” Courts have recognized the following actions, among others, to be just
cause for termination:
willful misconduct
gross incompetence
theft
fraud
conflict of interest
serious undermining of the corporate culture
serious breach of employer rules and policies (sexual harassment violation)
failure to respond appropriately to corrective discipline
The burden of proving if the conduct of the employee justifies dismissal is on the employer. Whether just
cause exists is a matter of taking into account the circumstances and relevant factors in a particular case.
Unless the file includes extremely detailed notes concerning verbal and written warnings given the
employee, severance may need to be offered to avoid a potential lawsuit from the dismissed employee.
Please consult your legal advisor.
An employer is required to provide severance pay unless the employee is being terminated for “just
cause”. Here is a website where you can find the British Columbia (B.C.) Employment Standards Act and
an Interpretation Guidelines Manual for B.C. Employment Standards Act and Regulations:
www.labour.gov.bc.ca/esb/igm
Here is the link to the B.C. Ministry of Labour fact sheet regarding B.C. Employment Standards:
www.labour.gov.bc.ca/esb/facshts/highlights.htm
Benefit Administration Reference Manual | Page 8
SEVERANCE & TERMINATION - GROUP BENEFITS
ADMINISTRATION
All group life insurance contracts and some long-term disability contracts allow for conversion to
individual contracts on termination of employment. Conversion is the employee’s right to continue
coverage through a personal policy without proof of good health. The conversion period lasts for 31 days
following the date of termination off the Plan. The Courts have taken the position that an employer will
be liable should they not advise terminating employees of their conversion options on the group insurance
program. We strongly recommend that you remind departing employees of their conversion options and
have them sign a statement confirming they have been informed of their right to convert benefits. Such a
system should be in place regardless of whether the termination is voluntary or forced.
Numerous plans now have Individual Health and Dental plans available into which an employee may
convert, and a few plans may have a conversion option on Long Term Disability; however, this is not
common. Understand what is available to your employees and incorporate the details into your waiver
form.
An employer will often want to offer Group benefits to employees during a severance period caused by a
layoff. Prior to offering an extension to the employee, the Plan Sponsor should discuss the requirements
with the Group Insurer. An extension of life insurance, extended health, and dental coverage for
employee severance awards can usually be arranged to match the required severance period. Be aware
though, that the longer the severance period, the more challenging it is to accommodate coverage
extension requirements. Do not assume agreement will be automatically granted by the Insurer.
Your group insurer will not normally agree to cover an employee for Short or Long-Term Disability
(LTD) during the severance period even though the Courts place an obligation on the employer to provide
Benefit Administration Reference Manual | Page 9
LTD coverage to an employee during a severance period. Should your LTD Group coverage not include a
conversion provision, an individual LTD policy may need to be arranged if the employee is uninsurable.
Alternatively an employer may be forced to self-insure this disability benefit. Self-insurance is not
recommended as the potential liability to the business is very high.
When can an employer terminate an individual who is disabled? Human Rights legislation prohibits
discrimination against an employee on the basis of disability; disability in itself does not terminate the
employment contract. Employees should expect to have full access to the benefits provided under the
Group benefits plan and are to be reintegrated back to the workplace when the disability permits.
Emerging legislation requires the employer to provide “reasonable accommodation” to the disabled
employee’s possible return to work with modified duties and/or workspace.
Employees may be terminated due to frustration of the employment contract; however, at what point does
an employer have a right to conclude a disabled person will never return to work? Does severance need
to be paid, and if so will the severance affect the employee’s Long Term Disability payments from the
Insurer? This is an evolving topic with no defined plan of action. The following section will provide
some guidelines as to how a careful Plan Sponsor should behave.
Benefit Administration Reference Manual | Page 10
EMPLOYMENT ISSUES - GROUP BENEFITS
ADMINISTRATION
Due to the fact that there is no legislation specifically preventing termination of employees unlikely to
return to work, an employer should consult a lawyer who specializes in employment law. Such
discussions would need to address any employees who are currently disabled. Furthermore, an
employment policy should be created to communicate with your workforce. This policy, once published,
will ensure employees are aware of their finite right to benefits under the Group Insurance and
employment contracts. In addition, it will confront in advance, any significant legal and moral issues that
might arise from termination of a disabled employee.
Employees are becoming much more aware of their rights in the modern workplace. Plan Sponsors and
Administrators have a serious obligation to administer the benefits plan without prejudice, unawareness,
or carelessness. For example, in a worst-case scenario an employer could be sued by a widowed spouse
for Life Insurance and/or Accidental death benefits, or even by a severely disabled employee who thought
he had adequate coverage.
The following sections provide a series of suggestions to ensure that as the Plan Sponsor you apply
careful attention to the details of your benefits plan. Proper training and overseeing of your
administrative employees will ensure your organization is not found responsible for an employee’s
ineligibility for benefits, and avoidance of possible lawsuits.
Benefit Administration Reference Manual | Page 11
Understanding and following the Insurer guidelines is a good start to ensuring compliant practices. Your
Benefits Insurer will work with you to guarantee mutually satisfactory structure for your plan such as:
defining an eligible employee, addressing minimum hours required to qualify, and negotiating
whether or not part-time, seasonal, or contract workers are allowed to participate
identifying a waiting (probationary) period after which benefits will begin
defining participation requirements, whether 100% participation or a lesser percentage
negotiating leave-of-absence or layoff provisions permitted by the Insurer
creating classes (if required) based on occupation, length of service, or other non-discriminatory
criteria; once classes are established, employees must be enrolled in their proper contractual class
Make sure your Group Plan Administrator is aware of the terms set out in the contract and is committed
to following them. A conscientious Administrator will enforce these standards in order to avoid under-
insured or non-insured employees, and any resulting late-application restrictions or rejections.
Do not promise what you cannot deliver. If your Life, Disability, or Health benefits require proof of good
health for some of the coverage you should ensure that any “non-medical” limits are discussed with the
employee before the position is accepted. This is particularly important where the employee’s current
benefits plan offers high levels of coverage (for instance if the employee is uninsurable).
1. Initial Paperwork: have the benefits enrolment form and any required medical statement form
part of the new-hires paperwork and ensure prompt return of these papers.
2. Process the enrolment promptly or ensure an effective abeyance is in place to process it near the
end of the waiting period. If a medical statement is part of the enrolment process, then send the
forms immediately so the medical information does not become stale-dated.
3. Ensure enrolment is Non-Discriminatory: all eligible employees must be allowed similar
benefits to their peers. Ensure new employees are being placed into their correct benefit class.
4. Create a policy insisting that all employees who work for you must be on the plan. Health and
Dental may legitimately be refused if, and only if, the employee’s spouse has coverage.
5. Refusal of Coverage: If you allow an employee to opt out, obtain a signed waiver form and keep
it in their file. Some insurers require that you send them refusal forms. These are usually very
generic in nature and don’t motivate the employee to reconsider their refusal. Our office
recommends a strongly worded Benefits Waiver Form that explains exactly what is being refused.
A copy of our recommended Waiver form can be found on page 17 of this manual.
Benefit Administration Reference Manual | Page 12
1. Salary Changes: report salary changes promptly to the insurer if any benefits are earnings-based.
2. Medical Statements: Request medical statements from employees if the Insurer is so requesting.
Get a signed waiver from an employee who declines to complete the medical statement. A
sample waiver is included on page 18.
3. Premium payments: Pay premiums promptly to avoid cancellation due to non-payment of
premium. Premiums are payable in advance and must be paid within 31 days of the due date.
4. Beneficiary designations: Made clearly in ink, and any changes requested should be sent
promptly to the insurer. If you are administering the plan via Internet, it is your responsibility to
keep the original signed documents in a secure manner and can be retrieved if needed for a death
claim.
5. Spousal Coverage: Ensure that any employee declining Health or Dental benefits due to alternate
coverage is enrolled for Life and Disability benefits. Ensure employees know they must advise
you promptly if the spouse loses coverage and needs to transfer to your plan. An employee must
apply for a change to dependent status within 30 days of the occurrence, such as marriage,
divorce, cohabitation, gain or loss of spousal coverage.
Have an understanding of what the contract allows and when to request an extra-contractual coverage
extension from the insurer. Do not offer to extend benefits if it is not backed up by the contract. Some
insurers may insist on approving such arrangements in advance.
Benefits continuation while on maternity leave is governed by provincial Employment Standards
Legislation. In B.C. employees must be offered the opportunity to continue their benefits. Inform the
insurer in advance and they will advise you if any paperwork is required.
The majority of plans are now administered over the internet, and enrolment forms are no longer sent to
the insurer but are rather kept by the Plan Administrator. Beneficiary designations on the enrolment and
any subsequent beneficiary change forms must be kept secure, as the original form will need to be sent to
the insurer if there is a death claim. This form is considered to be a legal document.
Benefit Administration Reference Manual | Page 13
Advise the insurer promptly of employee terminations. Most insurers will not refund more than
two or three months of back-premiums. Avoid paying premiums for employees who have left the
company, or who may be continuing to claim on your plan if you have not terminated them.
Be aware that when an employee leaves your employment, the last day of coverage for all
benefits (except Life Insurance) is the last day worked. Advise your terminating employee of this
to avoid any misunderstanding.
Insurers normally will not extend disability benefits as part of a severance package and will want
to approve extensions on other benefits. Get approval in advance.
Ensure terminating employees know of their right to convert their Life Insurance and possibly
other benefits. Have an acknowledgement form signed by employees who terminate that they
were advised of their right to convert the applicable benefits. A sample acknowledgement
appears in this manual on page 15.
Ensure a written policy is in place communicating how long benefits would be continued for a
disabled employee and at what point benefit termination would occur. If you don’t have a policy,
create one. Consult a lawyer who has a strong understanding of B.C. human rights and labour
law.
Many insurers have Benefits Plan Administration websites providing archives of employer administration
bulletins. These provide an excellent source of information, which the business owner or Benefits
Administrator can review periodically or search for specific information. In addition, there are
comprehensive websites for printing forms and accessing information.
Please contact us at RPP Benefits Inc. if you need help implementing any necessary changes to your
coverage to ensure you are not at risk. We can also assist you in negotiations with your insurer. Several
of the forms discussed above have been reproduced in the next few pages. Please feel free to adapt them
for your own implementation.
Benefit Administration Reference Manual | Page 14
SAMPLE WAIVER FORMS - GROUP BENEFITS
ADMINISTRATION
All companies include a conversion privilege in their contracts for Group Life Insurance. When
employees are terminated they have the right, within 30 days of their termination date, to “convert” their
Group Life coverage (within limits) to an individual policy with no medical evidence required. This can
be very valuable to an individual who may be uninsurable due to medical or lifestyle reasons and the onus
rests upon the employer to provide the employee with the appropriate information.
Many companies provide an individual Extended Health and Dental packages upon termination without
medical evidence. This, too, should be explored if the employee is not immediately moving on to new
employment and new group coverage. Individual coverage from any insurer will be expensive,
restrictive, and not as comprehensive as the Group benefits the employee previously enjoyed. This
information should be made clear to the employee so that he can make informed decisions.
Rarely will a plan have a conversion option on Long Term Disability (LTD) insurance; however, you
should be familiar with your contract and include LTD in your Conversion Waiver form if conversion is
available.
Acknowledgement of Conversion Privilege
I have been advised that I have the option to convert my Group Life Insurance coverage to an individual
policy without medical evidence (include Long Term Disability benefits and/or EHC and Dental benefits
if applicable) within 31 days of my termination date. I am aware it is my sole responsibility to investigate
the availability and cost of any individual coverage available to me.
I am also aware of the time-sensitive nature of my right to this privilege.
__________________________ ___________________
Signature Date
Benefit Administration Reference Manual | Page 15
Most insurers provide a bulletin about Life Insurance conversion, which the Plan Administrator should
obtain and use as a handout. Often such a handout will include the premium cost. The bulletin will give
specific instructions how to get a quote for the amount of coverage the employee can convert, the cost of
converting, and how to make an application for the conversion. The quote is without any obligation. Be
sure to make the insurer handouts available to terminating employees.
Conversion does not offer cost-effective premiums. For example, a non-smoker will be charged smoker
rates, and will need to provide proof of good health to obtain non-smoker rates. A healthy individual who
needs to purchase insurance should obtain their conversion quote and ask a Financial Advisor for a
premium comparison. That said, should an employee be uninsurable, the conversion option is
extremely valuable and should be seriously considered.
Benefit Administration Reference Manual | Page 16
It is a wise practice to insist that coverage under the Group plan be compulsory for all employees. All
Insurers have eligibility requirements and could cancel your plan if it is under-enrolled. Some Insurers
offer small discounts when coverage is compulsory. Your claims experience will be better (resulting in
better renewals) if all employees are required to join the plan. That said, if there are reasons to allow
employee refusals, you should obtain a signed waiver from the employee and keep it in their file.
Below is a suggested wording for your Waiver form:
Refusal of Benefits
At this time your employer is requesting that you enroll in our Employee Benefits program. The coverage
offers you Life Insurance payable to your named beneficiary upon your death, plus Short Term Disability
and Long Term Disability (include those that apply) which will pay you, after a waiting period, an
income to your age 65 in the event you cannot work due to sickness or accident. It also covers you for
Health and Dental coverage. We are very pleased to offer you this coverage.
Please note that if you do not enroll, you will not be paid any income should you be unable to work due to
sickness or injury. We very strongly encourage you to enroll in this plan.
If you do not enroll now, and wish to do so later, then you will be required to answer some health
questions and you might be declined all coverages. Even if approved for benefits, your Dental coverage
will be restricted to $100 for the first year you are on the Plan.
If you are covered by your spouse for Health and/or Dental, then you may exclude yourself from Health
and Dental. You will notice the enrollment form has a box for you to sign and indicate the details of any
existing Health and/or Dental coverage. Even if waiving Health and Dental we are requesting that you
join the plan to receive the other benefits offered.
If you will not be enrolling in this benefits plan, please sign the Waiver Statement below. If you are
enrolling, please sign the enclosed enrollment form.
Return these forms to:___________________________
EMPLOYEE WAIVER STATEMENT
I am choosing to refuse enrollment in the plan described above. I realize that in the event I may incur a
claim for Life Insurance, Disability, Health, or Dental, that there is no coverage for me. In the event of
such claim neither my employer or its agents or the Insurers will incur any responsibility for my lack of
coverage.
I understand that if I apply for coverage at a later date, such coverage may be refused or restricted.
__________________________________ ______________________________
(signature) (date)
Benefit Administration Reference Manual | Page 17
The form below is an example of a waiver form you can keep on file for an employee who wants to waive
their opportunity to apply for excess coverage for which medical evidence (proof of good health) has been
requested by the Insurer. This may help insulate your organization against possible lawsuits if:
at time of disability the employee is under-insured and claims you did not offer him the
opportunity to apply for additional coverage or
on a death claim an employee is inadequately insured and the widow feels the total coverage in
force was misrepresented
Offer to Apply for Excess Life, AD&D, and LTD Declined
This is to acknowledge that I have been offered an opportunity to apply to (insurer) under my Group
Insurance plan for additional coverage over and above the allowable “non-medical maximums” on Life,
AD&D, and Long Term Disability. In order to make such an application I have been provided with a
medical statement to complete.
I have the right to make the application in confidence and send the form to the insurer without my
employer viewing my medical declarations.
I have declined to complete the medical statement. I understand that I will be insured for any available
non-medical maximums on Life, A.D.& D., and Long Term Disability but will not be insured for
additional amounts available beyond the non-medical maximums. I also understand I can apply at any
future date should I so choose. It is up to me to approach my employer to obtain the required medical
application form.
Signed: ___________________________________________
Date: ____________________________________________
Witness: __________________________________________
Benefit Administration Reference Manual | Page 18
HIRING INDEPENDENT CONTRACTORS
More and more “employees” are electing to set themselves up as independent contractors for the
perceived tax benefits. There can be advantages to the employer and the worker by establishing an
independent contractor relationship. However, there are dangers in defining a working relationship as an
independent contracting relationship if it is only set up as a “tax shelter” and the facts of the situation do
not support a true contractor relationship. If the contractor designation is denied by Revenue Canada:
The employer may be required to pay all the appropriate contributions with interest and penalties
The contract “employee” will be denied deductions, and assessed interest and penalties
There are several indicators which may lead Revenue Canada to conclude that a relationship is not arms-
length and that the contractor for all intents and purposes continues to be an employee relationship:
the independent contractor continues to be insured under the employer’s group benefits plan
the independent contractor attempts to claim employee benefits such as vacation pay or severance
the employer continues to pay EI and WCB for the contractor
the contractor has only one “customer” – their employer
Regarding eligibility for group benefits, if the employee can truly be confirmed as an independent
contractor the Insurer will be reluctant at best to include the contractor on the benefits program. Most
definitely Long Term Disability will be denied to the contract worker. Be diligent about disclosing such
relationships to the Insurer.
The Canada Revenue Agency (CRA) has various tests that determine whether a Contract Status will be
accepted. These questions relate to:
the level of control the payer has over the worker and how much control the Employer has over
the contract worker
whether or not the worker provides the tools and equipment
whether the worker can subcontract the work or hire assistants
the degree of financial risk taken by the worker
the degree of responsibility for investment and management held by the worker
Benefit Administration Reference Manual | Page 19
the worker's opportunity for profit or loss, such as ability to negotiate contract rates or to improve
revenues by working longer hours. A commission or productivity bonus would not be considered
an opportunity for profit or loss
any other relevant factors, such as written contracts
A written contract should be drawn up that outlines the responsibilities as summarized above. A ruling
can be requested if a worker or payer is not sure of the worker’s employment status. Use Form CPT1
Request for a Ruling as to the Status of a Worker under the Canada Pension Plan and/or the Employment
Insurance Act. It is available on the web at:
www.cra.gc.ca/forms
In summary, CRA will be attempting to verify these working conditions are in place:
The worker is usually free to work when and for whom he or she chooses and may provide
services to different payers at the same time
The worker does not have to perform the services personally. He can hire another party to either
complete the work or help complete the work
The worker can generally choose the time and the manner the work will be performed.
The worker does not need to be at the payer’s premises
The worker can accept or refuse work from the payer
The worker is not a subordinate in that he doesn’t have anyone overseeing them
The working relationship between the payer and the worker does not present a degree of
continuity, loyalty, security, subordination, or integration, all of which are generally associated
with an employer-employee relationship
CRA’s guide RC4110(E) Rev. 06 entitled Employee or Self-Employed? is an excellent guide with
practical information. You can find it here:
www.cra-arc.gc.ca/E/pub/tg/rc4110/README.html
Benefit Administration Reference Manual | Page 20
B.C. MEDICAL SERVICES PLAN AND FAIR PHARMACARE
Provinces vary in whether residents are required to pay premiums for Provincial medical coverage. In
British Columbia (B.C.) enrolment in B.C. Medical Services Plan (MSP) and Pharmacare Drug Plan is
compulsory. The cost of provincial Medical care is supported by monthly premiums. As of March 2009,
premiums in British Columbia are:
Single: $54.00*
British Columbia Family of 2: $96.80*
Family of 3 and over: $108.00*
*These premiums are subject to change.
These premiums include both BC MSP and Pharmacare (which relates specifically to prescription drug
coverage for British Columbians).
Health Insurance BC is the new name for the administrative operations of the Medical Services Plan
(MSP) and PharmaCare, including Fair PharmaCare. On the internet you can access all of these programs
through this website:
www.health.gov.bc.ca/insurance
This website offers separate portals for residents, group administrators, and medical professionals.
Change of address, requests for a duplicate Care Card, and many other services are provided online.
Benefit Administration Reference Manual | Page 21
Fair Pharmacare was implemented on May 1, 2003 and applies a deductible to drug reimbursement based
on net family income.
BC residents enrolled with the Medical Services Plan (MSP) must register to receive their entitlement for
financial assistance under Fair Pharmacare. The “family” includes the applicant, the spouse and any
dependent children whose MSP coverage is on the same contract as the applicant.
Plan Sponsors and Administrators of Group Extended Health Benefit plans should ensure all employees
are registered with Fair Pharmacare. All Group insurers require employees to submit proof of registration
and employees who do not submit such proof are at risk of having their drug benefits curtailed until such
proof is provided.
Individuals can register or get more info at:
www.healthservices.gov.bc.ca/pharme/index.html
Creating an awareness of these issue among your employees will help to prevent rejected claims and time
spent correcting claims retroactively. Pharmacare will not pay claims retroactively; therefore, an
employee should register before there are expensive claims to insure through Fair Pharmacare or the
Group plan. On the next page is a bulletin you could provide to new employees who join your plan.
Benefit Administration Reference Manual | Page 22
B.C. Pharmacare: Registration for Fair Pharmacare
All employees covered on our Extended Health Benefits coverage are required by our Insurer to
register for Fair Pharmacare. This notice is to explain the meaning of “Fair Pharmacare” and
instruct you how to enrol and advise the Insurer you have done so.
B.C. Pharmacare will pay 70% of your eligible prescription drug costs after an annual deductible.
The deductible itself is based on your family net income. The income-based deductible was
implemented on May 1, 2003.
This forced all Insurers to institute a process which would protect them from paying for all or a
portion of drugs that should be paid by Pharmacare. All insurers have a dollar limit coded in their
claims systems, which triggers the need for proof of Pharmacare Registration. For XYZ Life, the
limit is $600.00 for employees under age 65 and $100.00 for employees over age 65, per calendar
year. To receive reimbursement beyond this $600 / $100 ceiling you must provide proof to XYZ Life
that you have registered with Pharmacare. As proof they require your registration number. (XYZ
Life does not need to know the actual deductible nor do they need to know your net family income).
If you know you are already registered, send a copy of your confirmation to XYZ Life. You can get
a copy of your registration, if required, from the website shown immediately below.
If not already registered, then apply now and send XYZ Life a photocopy of your Fair Pharmacare
Confirmation of Registration with your next claim submission.
The website for Pharmacare registration is:
www.healthservices.gov.bc.ca/pharme/index.html
The Pharmacare phone numbers are:
*From the Lower Mainland, 604-683-7151
*From the rest of BC 1-800-663-7100
Benefit Administration Reference Manual | Page 23
Prescription Drugs:
Coverage for drugs through the Fair Pharmacare Program includes eligible drugs prescribed by a
physician, certain ostomy supplies, insulin, syringes, needles and test strips for diabetics. There is a
deductible based on adjusted net family income. Drugs listed on the BC Drug Formulary are paid by
Pharmacare after the deductible has been satisfied.
This table illustrates the deductibles applicable to Pharmacare drug coverage:
For eligible residents age 18 to 64:
Amount covered Amount covered
Net Annual Family
Family Deductible when deductible is Family Maximum when maximum is
Income
reached reached
2% of net family
Less than $15,000 No deductible 70% 100%
income
2% of net family 3% of net family
$15,000 to $30,000 70% 100%
income income
3% of net family 4% of net family
Over $30,000 70% 100%
income income
For eligible residents age 65 or older:
Amount covered Amount Covered
Net Annual Family
Family Deductible when deductible is Family Maximum when Maximum is
Income
reached reached
1.25% of net
Less than $33,000 No deductible 75% 100%
family income
1% of net family 2% of net family
$33,000 to $50,000 75% 100%
income income
2% of net family 3% of net family
Over $50,000 75% 100%
income income
Ambulance:
Some coverage for ambulance transportation is included. Residents are required to pay $54 for all
transportation up to 40 km and $0.50 per/km thereafter to a maximum of $274
Dental Benefits:
NO COVERAGE for most dental procedures. Coverage is limited to dental procedures requiring
hospitalization. Furthermore, coverage is provided for residents aged 20 and under who require
correction to severe facial and cleft palate deformities
Benefit Administration Reference Manual | Page 24
Vision Care or Hearing Aids:
Coverage of routine eye exams for residents under the age of 18 or over the age of 65, and for all
persons with medical conditions where an eye exam is deemed medically necessary.
Reimbursement is limited to $44.83 for the eye exam
NO COVERAGE for glasses or contact lenses
NO COVERAGE on hearing aids for persons of any age
Hospital:
Coverage for standard rooms only
Paramedical:
Coverage for chiropractic, physiotherapy, naturopathy, massage therapy and non-surgical
podiatry is available to BC residents who qualify for MSP premium assistance. These individuals
are covered for up to a combined total of 10 visits/year and a maximum of $23 per visit
Surgical podiatry is covered for all BC residents
Medical Supplies:
Some coverage for ostomy and mastectomy supplies, permanent prosthetic devices, and for
orthotic devices through the Pharmacare program – applicable to children 19 and under
Out of Country:
Coverage for emergency situations only
In-patient coverage of up to $75/day for adults and children, and $41/day for newborns. Physician
and diagnostic services are covered at BC rates
NO COVERAGE for out-patient services
These highlights from the BC Medical Services Plan are to be used for general reference only and are
subject to change, corrections and updates (Figures shown are current as of April 2008). Other
government programs may also be available. For the latest information please contact:
British Columbia Medical Services Plan
P.O. Box 9035 Stn. Prov. Govt.
Victoria, BC V8W 9E3
In Vancouver and the Lower Mainland phone: (604) 683-7151
All other areas phone toll free: (800) 663-7100
For further details regarding coverage provided, visit: www.health.gov.bc.ca/msp
For an example of Group Insurer information regarding this coverage visit GreenShield Canada:
www.greenshield.ca/English/PlanSponsors/ProvincialHealthPlans
or Great West Life:
http://www.greatwestlife.com/001/Client_Services/Group_Plan_Administrators/Provincial_Health_
Plan_Coverage/index.htm
Benefit Administration Reference Manual | Page 25
HealthLink BC
HealthLink BC helps you learn about health topics, check your symptoms, and find the health services or
resources you need for healthy living. Call 8-1-1 to consult with a nurse or pharmacist (via BC
Nurseline) or a dietician (via Dial-a-Dietician). You can also visit www.healthlinkbc.ca for easy access
to help you find the services you need, closest to where you live.
Translation services are available in over 130 languages on request.
BC NURSELINE
BC NurseLine provides 24-hour, confidential health information and advice. From anywhere in the
province you can call BC NurseLine to speak to a registered nurse. These specially-trained nurses answer
questions about health topics and procedures identify symptoms, and help you decide when to see a health
professional. Information and referrals are also provided to other services.
Pharmacists are available to answer your questions about medications – between 5:00 pm and 9:00 am.
(overnight).
Call BC NurseLine: 8 - 1 - 1
The nurse will ask for your Personal Health Number on your B.C. Care Card, although you will not be
denied service if you do not provide it.
Translation services are available in over 130 languages. Please wait for the recorded disclaimer message
for a nurse to answer your call – ask for translation services in the language that you prefer.
DIAL-A-DIETITIAN
For nutritional information and advice, visit www.dialadietitian.org or call “Dial-A-Dietitian” and speak
to a registered dietitian. Translation services are available in over 130 languages upon request for callers.
If you need more in-depth counseling, referrals are provided to hospital out-patient dietitians, community
nutritionists and other services. This service does not replace the medical counsel of your doctor.
Toll-free in BC (800) 667-3438
In Greater Vancouver (604) 732-9191
IS IT AN EMERGENCY? CALL 911 OR THE LOCAL EMERGENCY NUMBER
If you have an emergency, call 911 or the local emergency number immediately. If you, or someone in
your care, has chest pains, difficulty breathing, or severe bleeding, you should seek medical attention
immediately.
Benefit Administration Reference Manual | Page 26
POISON CONTROL
If you are concerned about a possible poisoning or exposure to a toxic substance, call Poison Control
immediately for 24-hour toll-free poison information.
Toll-free in BC (800) 567-8911
In Greater Vancouver (604) 682-5050
BC HEALTH GUIDE
The B.C. Health Guide program is a self-care program, available 24 hours a day, to assist you in
managing your health. It brings a world of health information to help individuals make better health
decisions. The service is intended to be a reliable source of advice and health information services that
you can trust. There are four components to this initiative:
BC Health Guide Online This information is delivered through this
BC Health Files very comprehensive website:
BC Health Guide
BC Nurse Line www.bchealthguide.org
The program is also supported by the BC Health Guide Handbook, a resource reference book which has
been widely distributed to British Columbians free of charge through pharmacies. The BC HealthGuide
handbook provides information on how to:
recognize and cope with common health concerns
learn about how to prevent illness, home treatment and care options and when to see a health
professional.
Topics relevant to older adults are also included throughout the handbook
Anyone who needs one can receive a free BC HealthGuide handbook in English, French, Chinese and
Punjabi, and can be obtained at the following locations:
English and French handbooks are available at your local pharmacy or Government Agent's
Office.
Chinese or Punjabi handbooks are available at many community or multicultural organizations
If you need more information on how to get a BC HealthGuide, contact:
Health and Senior's Information Line - Call (800) 465-4911 or e-mail HLTH.health@gov.bc.ca
BC NurseLine - Call 8 – 1 – 1 to reach the services of HealthLink BC.
Benefit Administration Reference Manual | Page 27
EMPLOYMENT INSURANCE PROGRAM
2008 2009
Maximum Yearly Insurable Earnings $41,100 $42,300
Maximum Weekly Benefit $435 $447
Employee Contribution
I. Rate per $100 of Insurable Earnings $1.73 $1.73
II. Maximum Annual Contribution $711 $731.79
Employer Contribution (Without a Registered WI Plan)
I. Rate per $100 of Insurable Earnings $2.42 $2.42
II Maximum Annual Contribution $995 $1,024.51
Employer Contribution (With a Registered WI Plan)
$2.04 $2.042
I Rate per $100 of Insurable Earnings
$839 $863.77
II Maximum Annual Contribution
EI Savings per employee for employer with a registered WI
$156** $160 **
Plan **
** the reduced premium could differ from the numbers shown here,
depending on plan design or type of arrangement (for example sick leave,
salary continuation). Figures shown assume an Insured Weekly
Indemnity plan with a maximum benefit period of at least 15 weeks.
Note: Employee / Employer rates in Quebec are lower. This has been the case
since January 1, 2006 when the Quebec Parental Insurance Plan (QPIP) took effect.
Quebec offers its own parental benefits.
Benefit Administration Reference Manual | Page 28
If your company has a short–term disability plan in place, you may qualify for an EI premium reduction if
your plan meets certain requirements including:
The waiting period for eligible participants is not more than 3 months
Demonstrate that at least five-twelfths of the reduction will be passed on to the employees
covered by your approved plan
Your short-term disability plan provides coverage and benefits at least equivalent to EI disability
benefits
You must make an application for the EI premium reduction annually.
The employer’s rate of contribution is reduced from 1.4 times the employee contributions to 1.175 (2009).
For more information you can go to:
Website to “Frequently Asked Questions” for Employer Reduction:
www1.servicecanada.gc.ca/en/cs/prp/030.shtml
Website to obtain Guide for Employers to EI Premium Reduction:
www1.servicecanada.gc.ca
Weeks of leave Must benefits continue during leave?
Maternity: 17
Yes
Federal Parental/Adoption: 37 (combined
All benefits, provided employee pays
(Canada Labour Code) duration of maternity and parental leave
his/her share of the premium, if any
may not exceed 52 weeks)
Maternity: 15 Yes
British Columbia Parental/Adoption: 37 (35 for All benefits, provided employee pays
employees who take maternity leave) his/her share of the premium, if any
Benefit Administration Reference Manual | Page 29
Since January 4, 2004, the Employment Insurance (EI) Compassionate Care Benefit has been available
for EI-eligible workers who must be absent from work to provide care or support to a family member who
has a serious medical condition with a significant risk of death within six months. After a 2-week waiting
period, up to 6 weeks of benefit are available.
To be eligible for the benefit, workers must have accumulated 600 hours within the last 52 weeks. In
addition, the applicant must be able to demonstrate that his regular weekly earnings from work have
decreased by more than 40%.
The new benefit could be paid in relation to caring for one of the following gravely ill family members:
a spouse or common-law partner;
a parent;
the spouse or common-law partner of a parent;
a child; or
a child of the spouse or common-law partner
and various in-laws
A Medical Certificate for Employment Insurance Compassionate Care Benefits from an attending
physician will be required. The certificate must indicate that the ill family member has a serious medical
condition with a significant risk of death within 26 weeks (six months) and that the ill family member
requires the care or support of one or more family members.
The benefit can be taken by one individual or shared with other EI-eligible family members if they fit one
of the relationships described above. The benefit can be taken at the same time or in different weeks.
Claimants will have flexibility in how and when benefits may be claimed within the 26-week window. If
the gravely ill family member does not live in Canada, the same eligibility rules will apply.
As is the case with other EI benefits, there will be a waiting period of two weeks (over and above the
benefit’s proposed six weeks). When the benefit is shared, only the first family member who applies will
have to serve the waiting period.
Benefit Administration Reference Manual | Page 30
The Canada Labour Code, which applies to employers and employees in workplaces under federal
jurisdiction, has been amended so that employees are entitled to up to eight weeks of compassionate care
leave and job protection beginning January 4, 2004.
Since then all Provinces except Alberta have enacted at least 8 weeks of unpaid compassionate leave
available under their respective Employment Standards Acts.
In B.C. the Employment Standards (Compassionate Care Leave) Amendment Act came into force on
April 27, 2006.
Benefit Administration Reference Manual | Page 31
CANADA/QUEBEC PENSION PLAN (CPP/QPP)
Sources: Canada Pension & Disability Plan information: 2008 2009
http://www.hrsdc.gc.ca/eng/isp/cpp/cpptoc.shtml
Quebec Pension & Disability Plan home page:
http://www.rrq.gouv.qc.ca/en/programmes/regime_rentes/regime_chiffres/
Yearly Maximum Pensionable Earnings $44,900 $46,300
Yearly Basic Exemption $3,500 $3,500
Employee/Employer Contribution Rate:
CPP 4.95% 4.95%
QPP 4.95% 4.95%
Self-employed Maximum Contribution:
CPP $4,098.60 $4,098.60
QPP $4,098.60 $4,098.60
Maximum Employee/Employer Contribution/Year:
CPP $2,049.30 $2,118.60
QPP $2,049.30 $2,118.60
Maximum Monthly Disability Benefit:
CPP $1,077.52 $1,105.99
Contributor
QPP $1.077.49 $1,105.96
CPP $208.77 $213.99
Child
QPP $66.29 $67.95
Maximum Monthly Retirement Benefit (at age 65):
CPP $884.58 $908.75
QPP $884.58 $908.75
Maximum Death Benefit:
CPP and QPP $2,500 $2,500
Maximum Monthly Survivor’s Benefit:
CPP Under Age 65 $493.28 $506.38
Age 65 and Over $530.75 $545.25
$204.68 $213.99
Monthly Orphan’s Pension (each child)
QPP Under Age 45: without dep. children, & not disabled $437.76 $449.47
With dependent children and not disabled $716.15 $734.82
Disabled, with or without dependent children $745.77 $765.18
Age 45-64 $530.75 $765.18
Age 65 and over $530.75 $545.25
Age 65 and over Monthly Orphan’s Pension (per child) $ 64.99 $ 67.95
Benefit Administration Reference Manual | Page 32
OLD AGE SECURITY (OAS) PROGRAM
2008 2009
(as of Jan 1) (as of Apr 1)
Basic OAS Pension $502.31 $516.96
Guaranteed Income Supplement:
Single $634.02 $652.51
Spouse/Common-law partner of:
A Non-Pensioner $634.02 $652.51
A Pensioner $418.69 $430.90
Spouse’s Allowance:
Age 60-64, married to someone receiving OAS & GIS $921.00 $947.86
Allowance for the Survivor:
Age 60-64 $1,020.91 $1,050.68
Amounts are reviewed quarterly and adjusted for cost-of-living increases as defined under the Act.
Old age security payments are subject to income tax. High-income earners can expect to have some or all
of the payments clawed back. For 2008, the repayment of these benefits begins at $66,335 of income and
would be completely clawed back at $107,692 of income; the clawback thresholds are indexed annually.
Basic Old Age Security Pension Spouse’s Allowance
Must be age 65 or older Must be age 60 to 64
Must meet minimum Canadian residency Must meet minimum Canadian residency
requirements requirements
Taxable Not taxable
Subject to income test (clawback) Spouse or common-law partner must be entitled
to receive the OAS pension and the GIS
Subject to combined income test(clawback)
Guaranteed Income Supplement (GIS) Allowance for the Survivor
Must be age 65 or older Must be age 60 to 64
Must meet minimum Canadian residency Must meet minimum Canadian residency
requirements requirements
Not taxable Not taxable
Must be receiving Basic OAS pension Spouse or common-law partner is deceased
Subject to income test (clawback) Subject to income test (clawback)
Website for OAS, GIS, Spousal Allowances: www.hrsdc.gc.ca/en/gateways/nav/top_nav/program/isp.shtml
Benefit Administration Reference Manual | Page 33
WORKERS’ COMPENSATION
Worker’s Compensation comes under provincial jurisdiction; the Federal Government does not operate a
workers' compensation program. If your company is federally regulated then your employees will be
covered under the provincial program in which the employees work. Employees of the federal
government itself are covered by a federal statute, The Government Employees Compensation Act.
The Worker’s Compensation Board (WCB) provides no-fault income replacement to workers who are
absent from work due to workplace related illness or injury. Participation in the plan is generally
compulsory for any employer engaged in an industry or activity covered by the insurance plan.
Employers are required to pay a premium to the WCB fund based upon a dollar amount for each hour
worked by the employees. In return for participating in the workers' compensation program, employers
are relieved of tort liability to the employee as a result of workplace accidents. The employee's claim is
limited to the compensation and other benefits provided for under the plan. Premiums are 100%
employer funded; there is no cost-sharing with employees.
Employers are responsible for reporting accidents and any injuries to their provincial agency. Employee
claims undergo a review before payment is made to ensure the claim is truly work-related. Normally a
claim is investigated if an employer raises issues in writing about the employee's entitlement when
reporting the claim. Employees who are denied benefits are, in most cases, entitled to appeal the denial
through the WCB agency appeal process.
In addition to income replacement for lost time at work, the WCB provides healthcare expense
reimbursement, vocational rehabilitation, permanent disability awards, and fatality survivor benefits.
In British Columbia an employee would expect to receive 90% of their net eligible earnings while on total
disability.
Benefit Administration Reference Manual | Page 34
Where a business owner is providing employee benefits to the employees, the WCB is the first payer if
the absence from work and medical expense are deemed by the WCB to be work-related:
The WCB will pay benefits; the Group Short-Term or Long Term Disability is the second payer.
If the WCB rules the disability is not work related, then the Group plan would pay
Reimbursement for drugs, medical appliances, or other medical equipment are paid for by the
WCB, which is why most group plans exclude “occupational” coverage for Extended Health and
Dental benefits
The WorkSafe BC website has many online services to help you and should be thoroughly reviewed at:
www.worksafebc.com
For links to all of the provincial Workers’ Compensation Board websites, visit:
www.hrsdc.gc.ca/eng/oas-cpp/index.shtml
Benefit Administration Reference Manual | Page 35
DYING WITHOUT A WILL
“Intestate” means the individual has died without a will. Each province has its own laws on how assets
are divided when someone dies without a will. In this case, a trustee (executor, or administrator) will be
named by the Courts through the issuance of a testamentary grant. The appointed administrator will then
have authority to distribute the estate as determined by the provincial regulations. If an individual dies
under these circumstances, then the heirs (even a spouse) have no say whatsoever in how the estate is
distributed.
In all provinces, when a person dies without a will the percentages allocated to heirs will differ; however,
the general distribution remains the same. It can be assumed that if there is a spouse only with no
children, the estate will go entirely to the spouse. For children only, all children will share equally in the
estate. If there is a spouse and children, the distribution becomes more complicated and may cause
serious disruption to the family estate.
Special rules apply (varies by Province) where a surviving spouse has lived separate and apart for at least
a year prior to the death of an intestate. In this case the surviving spouse takes no share in the intestate’s
estate. In some provinces adultery can complicate matters further.
In British Columbia the intestate distribution guidelines are as follows:
If there is a surviving spouse only: spouse inherits all
If there are children but no surviving spouse: children inherit all equally
If there is a spouse and only one child: the spouse is entitled to the first $65,000 plus household
furnishings and a life interest in the matrimonial home. Beyond $65,000 the remaining value of
the estate is split equally between the spouse and the child
If there is a spouse and more than one child: as above, but the remaining value beyond $65,000 is
split 1/3 to the spouse and 2/3 to the balance of the children
Benefit Administration Reference Manual | Page 36
Probate is a process whereby the Court recognizes the authority of an executor as named in a will. Once
the Court recognizes the probate, third parties such as banks will accept that the will is valid and the
executor will have the authority to distribute the estate’s assets.
In the event the individual has died without a will (intestate), the Court will issue Letters of
Administration. These letters serve the same purpose as the probate of a will – that is to bestow authority
on an appointed administrator to distribute the estate.
There are fees attached to probate which can vary significantly by province. In British Columbia:
$208 filing fee (regardless of estate’s size)
$6 per $1,000 for estates valued at $25,000 to $50,000
$14 per $1,000 for estates valued over $50,000
Probate (and the resulting fees) may be avoided on very small estates. Without probate it is up to each
third party involved to decide whether to accept the administrator’s authority. Where probate is required,
an individual, while still living, should investigate methods which can be employed to keep some assets
outside of the will or estate. A common example is to have some the assets in joint ownership, which can
then be passed to the “heir” without going through the estate. Caution is necessary as aggressive
planning for the sole purpose of avoiding probate fees can have other unintended consequences. An
individual with even a modest estate should seek counsel from legal and financial advisors.
Benefit Administration Reference Manual | Page 37
PERSONAL INFORMATION PROTECTION AND ELECTRONIC
DOCUMENTS ACT
The federal government and some provinces have enacted privacy legislation. The federal legislation,
known as the Personal Information Protection and Electronic Documents Act (PIPEDA) was enacted in
2000 (Bill C-6) and, since January 1, 2004, has applied to all individuals in any province that does not
have its own equivalent legislation. Currently, British Columbia, Alberta and Quebec are the only
provinces with their own privacy statutes of general application.
PIPEDA governs the handling of personal employment information in relation to employees of federally
regulated employers and also to individuals in any province that does not have its own privacy legislation.
PIPEDA also establishes the requirements for how personal information is collected, used, or disclosed by
organizations.
In provinces without privacy statutes the use of personal information by employers in the private sector
relating to their employees is currently not regulated. However, even in provinces without privacy statutes
of general application, there are statutes of application to specific classes of employees such as public
sector employees as well as specific privacy requirements in certain statutes.
In brief, organizations covered by the Act must obtain an individual’s consent when they collect, use or
disclose the individual’s personal information. This information can only be used for the purposes for
which it was collected. If an organization would like to use it for another purpose, consent must be
obtained again. Individuals should be assured that their information is protected by specific safeguards,
including measures such as locked cabinets, computer passwords or encryption. An individual has a right
to access personal information held by an organization and to challenge its accuracy.
Provincially, Alberta’s Personal Information Protection Act came into effect as of January 1, 2004.
Ontario developed The Personal Health Information Protection Act 2004 for the health services industry.
Quebec has had its own legislation since 1994.
British Columbia’s privacy law, the Personal Information Protection Act (or PIPA) came into effect as of
January 1, 2004.
Failure to comply with the PIPA requirements can result in a complaint to a Privacy Commission or a
court challenge that can result in civil damages or fines.
Benefit Administration Reference Manual | Page 38
The Office of the Privacy Commissioner of Canada has the following website that provides useful
information to help businesses learn how they can comply with the Act.
www.privcom.gc.ca
At this site you can access a document called Your Privacy Responsibilities: A Guide for Businesses and
Organizations.
In British Columbia, the Office of the Information and Privacy Commissioner (OIPC) monitors and
enforces British Columbia's Freedom of Information and Protection of Privacy Act (FIPPA) and Personal
Information Protection Act (PIPA). FIPPA allows access to information held by public bodies (such as
ministries, universities and hospitals) and determines how public bodies may collect, use and disclose
personal information. PIPA sets out how private organizations (including businesses, charities,
associations and labour organizations) may collect, use and disclose personal information. You can learn
more about B.C.’s legislation at the following website:
www.oipcbc.org
Benefit Administration Reference Manual | Page 39
STATEMENT OF PURPOSE: RPP BENEFITS INC.
RPP Benefits Inc. exists to improve the quality of life for our clients by providing people and companies
with professional, reliable and cost effective insurance and financial services. We provide advice to
individuals or companies with respect to insurance needs, wealth management, employee benefits,
executive compensation, and retirement planning.
We are a Customer driven company, dedicated to placing the customer's needs first and
foremost in every transaction.
We are a Value driven company, dedicated to providing clients with the most value for their
money. Integrity is one of our biggest assets and all relationships are treated accordingly.
We are a Team driven company, dedicated to providing an environment where personal
growth, professionalism and creativity are encouraged and rewarded.
We are a Community driven company, dedicated to making an impact on the lives of people
in our community.
Our goal at RPP Benefits Inc. is to be recognized as a leading company in the financial
services market. We will be the choice for people who value exceptional service,
professionalism and integrity above all else.
RPP Benefits Inc. can provide professional insurance and financial advice on Individual or Group
Life and Health insurance, Executive Compensation, Group or Individual Pension Plans, and
retirement planning for individuals. Please do not hesitate to contact our office with any questions
you have or service you require concerning your Group benefits, Life Insurance or retirement
planning.
Benefit Administration Reference Manual | Page 40
DISCLAIMER
The information contained in this manual is for general use and informational purposes only. It is
intended to provide insight on issues of interest to Group Plan Sponsors and Administrators and point out
websites which may offer further assistance.
This manual is not intended to be legal advice. You must consult your professional advisors about your
particular circumstances.
Benefit Administration Reference Manual | Page 41
