Designated Employee Benefit
Can a group sickness and accident insurance plan (a plan consisting of individual insurance policies) also cover employees’ spouses or persons residing with the employee and with whom the employee is connected by blood relationship, marriage or adoption? CRA responded:
[I]t appears to us that the intention of the legislator is that a group sickness or accident insurance plan may provide benefits to an employee, the employee’s spouse or common-law partner or a person related to the employee who lives at home or is dependent on the employee. For the purposes of the Life and Health Trust rules, a benefit from a group sickness or accident insurance plan is a "designated employee benefit" as that term is defined in subsection 144.1(1) and may be paid from a Life and Health Trust to an employee or the employee’s spouse, common-law partner or related person who lives at home or is dependent on the employee.
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|Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) - Subparagraph 6(1)(a)(i)||PHSP can include spouses and dependent related persons||96|
Subsection 144.1(2) - Employee life and health trust
1.9 A trust that provides health and welfare benefits under plans…may be a health and welfare trust or an employee life and health trust. Where a trust qualifies as both a health and welfare trust…and an employee life and health trust, the trust should maintain evidence to support the type of trust arrangement under which it intends to operate.