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This translation was prepared by Tax Interpretations Inc. The CRA did not issue this document in the language in which it now appears, and is not responsible for any errors in its translation that might impact a reader’s understanding of it or the position(s) taken therein. See also the general Disclaimer below.
Principal Issues: [TaxInterpretations translation] Are the premiums paid by the employer regarding an RAMQ for individual insurance policies for retirees a taxable benefit for the employee or pensioner?
Position: No
Reasons: Interpretation of the Act - Previous positions
2006-021675
XXXXXXXXXX Anne Dagenais,
Advocate, M. Fisc.
March 17, 2008
Dear Sir,
Subject: Request for Technical Interpretation Taxable Benefit - 6(1)(a)
This is in response to your emails of December 4, 2006 and March 16, 2007 in which you requested our opinion regarding an individual insurance plan established by the régime générale d'assurance médicament du Québec ("RGAMQ") [Quebec General Drug Insurance Plan]. We apologize for the delay in responding to your question.
Unless otherwise indicated, all statutory references herein are to the provisions of the Income Tax Act (the "Act").
Your Question
Are the premiums paid by the employer for individual insurance policies for retirees under the RGAMQ a taxable benefit?
As stated in paragraph 22 of Information Circular 70-6R5 dated May 17, 2002, it is the practice of our Directorate not to issue written opinions on proposed transactions otherwise than by advance rulings. Furthermore, when it comes to determining whether a completed transaction has received appropriate tax treatment, that determination is made first by our Tax Services Offices as a result of their review of all facts and documents, which is usually performed as part of an audit engagement. However, we can offer the following general comments that we hope may be helpful to you. These comments may, however, under certain circumstances, not apply to your particular situation.
Paragraph 6(1)(a) requires a taxpayer to include in computing income from an office or employment the value of any benefit received by the taxpayer in the course of, or by virtue of an office or employment, except any benefit described in subparagraphs (i) to (v), which include contributions made by the taxpayer's employer to a group sickness and accident insurance plan, a private health services plan or a group term life insurance policy.
By virtue of subparagraph 6(1)(a)(i), the premium paid by the employer regarding the RGAMQ would not be a taxable benefit to an employee because the plan is a private health services plan, as defined in subsection 248(1) and as described in paragraph 4 of Interpretation Bulletin IT-339R2 "Meaning of Private Health Services Plan". (See document F 9721167).
Please note that the payment of a bonus to a person retired from the employer is not a relevant element in the analysis of the tax treatment. A person who has retired from the employer receives the same treatment as the employee. Finally, the fact that the employer's share of the RGAMQ is paid under an individual plan is not a factor to be taken into account in this analysis.
Best regards,
Randy Hewlett
Manager
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch.
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