Morn.Pension

Question 1

Briefly explain the primary objective of the Canada Health Act (Hint = PPR)

Answer 1

Protect, promote, restore the health of Canadians without financial or other barriers

Question 2

Identify 5 conditions for province to receive unreduced funding under Canada Health Act (Hint = CUPPA)

Answer 2

1. COMPREHENSIVE: covers all hospital & medical services
2. UNIVERSAL: covers all eligible residents
3. PUBLIC: requires administration by non-profit public authority
4. PORTABLE: between provinces
5. ACCESSIBLE: uniform terms & conditions for all eligible residents

Question 3

True or False?

The federal government cover more than half of provincial health care costs?

Answer 3

False, less than half

Question 4

Identify the federal government mechanism for provincial medical funding

Answer 4

transfer payments

Question 5

Identify 4 methods that provinces use to raise balance not covered by federal transfer payments for medical programs

Answer 5

1. Direct cost-sharing by residents & employers (Ex: ON)
2. Payroll tax (Ex: ON)
3. General revenue (Ex: NB)
4. Tax on group insurance plans (Ex: ON)

Question 6

Briefly explain the tax treatment of:
a) individual premium payments
b) employer contribution
to provincial health insurance premiums

Answer 6

a) not tax deductible

b) taxable

Question 7

Briefly explain the tax treatment of employer contribution to private health insurance premiums

Answer 7

Not taxable (except in Quebec)

Question 8

Identify 2 challenges facing provincial hospital and medical insurance plans are

Answer 8

1. Prescription drug costs
   - federal government is joining the provinces in the pan-Canadian
   Pharmaceutical Alliance (pCPA)
2. Demographics (the ratio of working-age people to retired people is going
   down)
   - federal government is increasing immigration targets (Immigrants tend to be
   younger.)

Question 9

Identify 2 reasons for the inception of WC insurance

Answer 9

1. COURTS: overwhelmed by rapid industrialization and workplace accidents
2. VICTIMS: needed prompt medical & financial assistance

Question 10

What is the underlying insurance principle of WC insurance

Answer 10

no-fault insurance

Question 11

How is WC insurance funded

Answer 11

By the employer

Question 12

Explain individual liability in WC insurance regarding:

a) operation
b) funding
c) where used

Answer 12

a) OPERATION: by WC boards
b) FUNDING: each employer is self-funded based on claims history
c) WHERE USED: public agencies

Question 13

Explain collective liability in WC insurance regarding:

a) operation
b) funding
c) where used

Answer 13

a) OPERATION: by WC boards
b) FUNDING: each industry class (based on activity & risk) is assessed
collectively based on claims history
c) WHERE USED: non-public industries

Question 14

Evaluate the performance of WC using the criteria given in the CAS.GovtIns paper

Answer 14

Necessary?
- YES, it’s crucial for medical costs & income replacement
Efficient?
- YES, more efficient than private insurance since profit motive is removed
Welfare or Insurance?
- INSURANCE, because premiums are paid regardless of loss AND benefits provided only if there is a loss

Question 15

Identify the 2 objectives of EI (Employment Insurance)

Answer 15

1. Income replacement (temporary)

2. Re-employment assistance

Question 16

Identify the 2 financing mechanisms of EI

Answer 16

1. Employer & employee share the cost
   In 2016:
   → employee rate = 1.88%
   → employer rate = 2.63% = 1.4 x employee rate
2. Some programs funded by general tax revenues

Question 17

Briefly explain the tax treatment in EI with respect to premiums and benefits.

Answer 17

PREMIUMS: employer = tax deductible | employee = tax credit | self-employed = 50% is tax deductible
BENEFITS: taxable

Question 18

Identify 3 reasons why EI wouldn’t be viable without Govt involvement

Answer 18

1. ADVERSE SELECTION: only those about to lose their jobs would buy it
2. EMPLOYERS WOULDN’T CONTRIBUTE: they get no benefit (government
   must mandate coverage)
3. COMPLEXITY: Govt already has necessary structures in place to facilitate
   operations

Question 19

Briefly describe 4 minimum requirements for an employee benefits plan to qualify for EI premium reduction.

Answer 19

1. Employee benefits GREATER than EI benefits
2. Benefits START in 15 days
3. Benefits DURATION longer than 15 weeks
4. Employee compensation NOT REDUCED even if additional EI benefits are given in same period

Question 20

Identify 3 examples of acceptable arrangements to return a portion of the premium reduction to the employees.

Answer 20

1. Written agreement
2. Cash back on 5/12 of company savings
3. Increased benefits

Question 21

Briefly describe 3 circumstances under which a potential claimant will not qualify for regular EI benefits.

Answer 21

1. Dismissal with cause
2. Quit
3. Strike