Budget declares premiums gone by 2009
The April 22, 2008, Alberta budget eliminated health-care premiums under the province’s publicly funded health-care program, the Alberta Health Care Insurance Plan (AHCIP). The premium would be eliminated as of Jan. 1, 2009, and a new registration process introduced.
“Thanks to this province’s fiscal situation, we are able to remove the burden of health-care premiums three years earlier than anticipated,” says Ron Liepert, minister of Alberta health and wellness.
Until 2009, employers and benefit administrators will be responsible for collecting and remitting premiums. Those who also contribute to Alberta Blue Cross or other supplementary insurance plans that provide vision, dental and other extended coverage will still be responsible for paying those premiums as they will not be eliminated.
“Alberta will join seven other provinces and territories as jurisdictions that do not collect specific health premiums or taxes but rather fund health care out of general tax revenue,” said a release from management consulting firm Hewitt Associates.
Only British Columbia and Ontario fund health-care programs through individual health premiums (and employer health tax for Ontario), while provincial health care in Manitoba, Quebec and Newfoundland and Labrador is partially funded by a payroll tax levied on employers.
Saskatchewan, New Brunswick, Prince Edward Island, Yukon, Northwest Territories and Nunavut have no specific health tax or premium.
The change “presents a financial windfall to companies with Alberta employees,” said Hewitt. “The change creates both an opportunity and a decision for employers who pay all or part of health-care premiums in that province.” For example, an Alberta company with 100 employees could save up to $100,000 annually.
In addition, the AHCIP makes employers legally responsible for several administrative functions related to employee enrolment, communications and premium remittance, said Hewitt, so it’s expected the elimination of health-care premiums will relieve employers of most of this burden.
