Morn.Pension Flashcards
Primary objective of the Canada Health Act
[PPR]
To protect, promote, restore the health of Canadians without financial or other barriers
Identify conditions for province to receive unreduced funding under Canada Health Act (5)
CUPPA
- COMPREHENSIVE: covers all hospital & medical services
- UNIVERSAL: covers all eligible residents
- PUBLIC: requires administration by non-profit public authority
- PORTABLE: between provinces
- ACCESSIBLE: uniform terms & conditions for all eligible residents
Does removing extended health care services violate any of the CUPPA conditions?
No, all conditions are met in this case
Does the federal government cover more or less than half of provincial health care costs?
Less than half
Federal government mechanism for provincial medical funding
Transfer payments
Methods that provinces use to raise balance not covered by federal transfer payments for medical programs (4)
- Direct cost-sharing by residents & employers (Ex: ON)
- Payroll tax (Ex: ON)
- General revenue (Ex: NB)
- Tax on group insurance plans (Ex: ON)
Tax treatment: of individual premium payments to provincial health insurance premiums
Not tax deductible
(aka not excluded from taxable income)
Tax treatment: of employer contribution to provincial health insurance premiums
Taxable
(We get taxed for their contributions :( sad)
Tax treatment: of employer contribution to private health insurance premiums
Not taxable benefits (except in QC)
Identify 2 challenges facing provincial hospital and medical insurance plans + their solutions
- Prescription drug costs
- Federal government is joining the provinces in the pan-Canadian Phamaceutical Alliance (pCPA) - Demographics (the ratio of working-age people to retired people is going down)
- Federal government is increasing immigration targets (Immigrants tend to be younger)
What is the reason for the inception of Worker’s Compensation Insurance? (2)
Historical reason was to reduce the burden on courts and congestion in courts and provide immediate assistance to injured worker
What is the underlying insurance principle of WC insurance
No-fault insurance
How is WC insurance funded?
By employer contributions (assessments)
Explain individual liability in WC insurance regarding: Operation, funding, where used
OPERATION: benefits administered by WC boards
FUNDING: each employer is self-funded based on claims history
WHERE USED: public agencies, large corporations in transportation industry
Explain collective liability in WC insurance regarding: operation, funding, where used
OPERATION: benefits administered by WC boards
FUNDING: each industry class (based on activity & risk) is assessed collectively based on claims history
WHERE USED: non-public industries
Evaluate the performance of WC using the criteria given in the CAS.GovtIns paper
Is it insurance or welfare?
- WC is insurance, since premiums are paid regardless of loss and benefits provided are if there is a loss only
Is it necessary or does it achieve a social purpose?
- It is necessary, potentially could be provided by private market but at a higher price
Is it efficient or accepted by the public?
- Yes, it is more efficient than private insurance since profit motive is removed
Name the 2 objectives of Employment Insurance
- Provide temporary income replacement for those who lost their jobs not from their own fault
- Promotes active re-employment assistance to help unemployed workers to find and create jobs
How is employment insurance financed? (2)
Contributions from employers and employees
- In 2016: employee rate = 1.88%, employer rate = 2.63% = 1.4*employee rate
Some programs funded by general tax revenue
Employment Insurance: tax treatment with respect to premiums & benefits
PREMIUMS: employer = tax deductible, employee = tax credit, self-employed = 50% is tax deductible
BENEFITS: treated as taxable income
Give 3 reasons why Employment Insurance wouldn’t be viable without Government Involvement (3)
- ADVERSE SELECTION: only those about to lose their jobs would buy it, so premiums would either be unaffordable or the program would not be viable
- EI CAN BE CATASTOPHIC: in an economic crisis or downturn of the market, an insurer’s solvency would be at high risk. It is typically more difficult for a government to be insolvent
- SOCIAL NEED: EI is in place for a social need and could create a high social burden if it were in the private market. From a standpoint of a private insurer, it would not be profitable or viable
Briefly describe 4 minimum requirements for an employee benefits plan to qualify for EI premium reduction
- Employee benefits are greater than EI benefits
- Payment of benefits starting on or before the 15th day of disability
- In the case of weekly indemnity plans, payments of benefits for at least 15 weeks for each disability occurence
- Employee compensation NOT REDUCED even if additional EI benefits are given in same period
Identify 3 examples of acceptable arrangements to return, directly or indirectly, a portion of the premium reduction to the employees
- A written mutual agreement on how the savings will be returned to the employees
- A cash rebate equal to 5/12 of the savings divided amongst the employees, which is treated as an employment income subject to source deductions
- Providing new or increased benefits, including upgrading existing benefits, or providing more holidays or time off work
Briefly describe 3 circumstances under which a potential claimant will not qualify for regular EI benefits
- Claimant who leave jobs voluntarily without just cause
- Claimant who lose jobs due to misconduct
- Claimant who are out of work because of a strike or lockout
