Background information
Subsequent to what we sent you in November regarding the Canadian Dental Care Plan (CDCP) that provides dental coverage to Canadians who meet specific eligibility criteria, here are some key updates.
Who qualifies for the plan?
The CDCP is a program for Canadian families who meet the following criteria:
- Have an adjusted household net annual income of less than $90,000. Those with an adjusted household net annual income of less than $70,000 will not have copayments.
- Have filed the prior year’s income tax return.
- Do not have access to dental coverage through their employer or a privately purchased benefits plan*.
* Any level of dental coverage offered by an employer, including health spending accounts, is considered access to dental coverage, even if the employee opts out of dental coverage.
The Canadian Dental Care Plan is expected to be released in 3 phases.
The first phase is limited to eligible children under the age of 12 and serves as an interim solution only. Administered by the Canada Revenue Agency, this interim benefit became effective December 1, 2022, and has an end date of June 30, 2024. Learn more about the Canada Dental Benefit.
The second phase covers those under the age of 18, seniors and persons with disability. Unlike the lump-sum payouts that was implemented for the first phase, this phase of the CDCP involves dental claims submission and those who are eligible will have different copayments. Read more about eligibility criteria, application process, services included and coverage levels on our blog.
The third phase applies to all other Canadians that meet the eligibility criteria and is expected to be in effect by 2025.
How does this impact you as an employer?
The CDCP is limited to those who do not have access to dental coverage through their employer or a privately purchased benefits plan. It is important to understand what is considered access. Any level of dental coverage offered by an employer, including health spending accounts, is considered access to dental coverage, even if the employee opts out of dental coverage.
Effective the 2023 calendar year, employers will be required to indicate on their employees’ T4 or T4A whether each employee or any of their family members were eligible, on December 31 of each year, to access any dental care insurance or coverage of dental services of any kind that you offered. Please refer to the following Canada Revenue Agency sites for details:
Box 45 (Employer Offered Dental Benefits) will be added to T4 statements effective the 2023 taxation year. The federal government requires employers to report whether an employee (current or former) or spouse of a deceased employee had access to dental insurance or dental coverage of any kind, including a health spending account, on December 31 of the reporting tax year.
Box 015 (Payer Offered Dental Benefits) will be added to T4A statements and will be mandatory if you report in Box 016, Pension or Superannuation; it will be optional otherwise.
There is no need to determine if an employee has opted in or out of dental coverage; the reporting is based solely on whether dental or health spending account coverage was offered.
If your employees have questions, they can call us at 1-800-661-6995.
Questions?
If you have questions, please reach out to your Group Sales representative.