Bill C 13, Part 15: CPP Contributions with respect to Uninsured Disability Plans

In typical governmental fashion, the Federal Government announced in December of last year -- with little notice and preparation -- that CPP deductions (both the employee's and the employer's portion) must now be made on non-insured employer-funded disability plans. This includes STD and LTD benefits and is potentially retroactive to 2006.

While our industry has been scrambling to determine the level of employer support that could be provided for self-funded disability programs administered by insurance companies, in reality, there has been little progress on companies altering their administrative systems to pay an employee's CPP portion directly to CRA. Lobbying by the Canadian Life and Health Insurance Association ("CLHIA" -- our insurance association voice) has resulted in the CRA likely accepting CPP payments from December 16, 2011 rather than retroactive to 2006.

As it now stands, since it appears that insurers will not be updating their administration systems anytime soon, we are advising employers to revise their own internal systems to allow for the inclusion of any required CPP amounts. Another avenue to explore could be to change these disability programs from self funding to an insured basis. This will avoid the deduction but may attract other financial consequences.

Talk to your consultant on the course you should be taking as well as other options available.

Tom James
VP, Consulting

Welcome to 2012




 

I am excited about 2012 because we continue to see signs of economic improvement, not just here but in the United States, too.  In Canada, the unemployment rate was last reported at 7.5 percent in December of 2011 while in the United States, it fell to 8.5 percent in December of 2011, the lowest since February 2009. 

In addition, as you know, we operate in a changing industry.  The evolving drug landscape alone means that insurance companies, who typically apply a percentage increase to the cost of providing a drug plan every year are applying a lower factor this year.  Note: That doesn't mean plans will cost less than last year's (all things being equal), just that the increase will be less.  And please also note: At renewal, your Pal consultant looks at your unique organization and claiming trends to determine whether or not that factor is appropriate for you.  If justified, we will negotiate to the differential, if there is one.

If you're reading this, that means you're at our newly refreshed website and I hope you like it.  We will continue to post news items and resources here (our annual Reference Guide, our Guide to Provider Trends, retirement calculators, handy links, etc.) but we have something new: A more dynamic dialogue through our blog that will be a forum for both of us -- should you choose to comment and I would welcome that -- and an opportunity for us to talk about some of those matters of interest that don't necessarily make it into our newsletter or other communications.

I want to close by personally inviting you to contact me to discuss how we can continue to work together to help you achieve your corporate and human resource goals through benefits, retirement, and compensation strategies.  And please let me know what you think of our new site!

Wishing you good health and happiness in 2012.

Michael Worb
President & CEO
Pal Benefits Inc.

Welcome to Pal Talks!

Check here for an ongoing Pal discussion of industry news, events and commentary.  Feel free to join in on the dialogue!

If Your Employee Says: “I’m Underpaid!” - Understand that it’s all relative

From our January Newsletter

How do you respond to an employee who says he or she is underpaid? Unfortunately, in this instance, using Google – which works so well for so many topics – will likely not help. Two top sites that came up on a recent search of the terms “Am I underpaid?” were (1) a link to a site entitled “Underpaid and Bullied”and (2) a blogger called the “Evil HR Lady.” Neither site answers the question to any satisfaction.

Conclusion: Pay is relative and an HR professional requires keen insight and solid comparative data in order to address such an employee statement.  And, clearly, Google cannot help in this situation.

What should a typical mid-sized organization offer as part of a total rewards strategy?

Self-motivated, personally driven employees will appreciate educational or skill-development opportunities. Others might welcome an opportunity to acquire additional vacation days, subsidies for gym memberships or the like. Understanding childcare needs and providing resources is often popular with employees.