General Information 3
Core Plan 4
Dental 5
Cost-Plus Plan
Tax Implications of the Fund 8
How to Enroll
Coverage Details
Claims Process
Core Plan Exclusions and Limitations
Questions
Employer Notice to Employees
Overview
Core Plan:
Cost-Plus Plan: An o
Portability
Notice to Participants and Employees
Eligibility
Core Plan
Cost-Plus Plan
Rates
Extended Health Care
— 70% co-insurance, up to a maximumof $ for each participant and each dependent, per policy750year (September 1 – August 31)
Please noteCo-insurance (i.e., 70% co-insurance) refers to the percentage of the claim paid by the plan. The remainder, if any, is paid by the
that will be paid in the stated time period.
:
Hearing aids: Charges for the purchase of hearing aids on the written order of a physician or audiologist, or the repair to a combined maximum of $600 per participant in any four-year period
CPAP Machines: Sleep apnea appliances up to a combined maximum of $1,500 per participant once in any five-year period.
Auxiliary care: Up to a maximum of $1,000 per participant each policy year
Foot orthotics: Up to a maximum of $200 per participant per policy year on the written order of a physician or podiatrist
Orthopedic shoes: Maximum of $250 per participant each policy year. Custom-made orthopedic shoes and/or adjustments to stock item footwear on the written order of a physician (stock item footwear excluded)
Custom-fitted braces: Once in a 24-month period for custom-fitted braces, which incorporate a rigid metal or plastic support, on the written order of a physician
Blood-testing monitors: Up to a maximum of $150 once in any five-year period on the written order of a physician
Wheelchairs: Manual wheelchairs certified in writing by the attending physician as medically necessary for the condition of the participant. Purchase of a wheelchair is limited to a maximum of one wheelchair per participant in any three-year period on a pre-approved basis only
Medical aids: Splints, cervical collars, trusses, crutches, casts, canes, walkers and traction kits (walkers and traction kits are provided on the written order of a physician)
Dental
$750 maximum for each participant and each dependent, per policy year (September 1 - August 31)
Coverage is for usual and customary dental fees, as determined by Alberta Blue Cross, and will be based on charges applicable in the provider’s province of dental practice.
Basic dental — 80% co-insurance
Diagnostic
■ Recall or specific exam: One in six months if under 19, one in 12 months age 19 and over per dentist
■ Bite-wing X-rays: One set in six months if under age 19, one set in 12 months for age 19 and over
■ Panoramic or full mouth series: One in 24 months Comprehensive exam: One per participant in any in five year period for covered dental specialty
■ Consultations: If supplied for covered services by a consultant dentist on the formal request of a referring dentist
■ Emergency exams: When necessary due to sudden development of pain or accident
Preventative
■ Cleaning: Once in six months if under age 19 and once in 12 months for age 19 and over
■ Scaling and root planing: Maximum of six units every 12 months
■ Fluoride: One in six months if under age 19 and one in 12 months for age 19 and over
■ Pit and fissure sealant: Limited to individuals under 19 and permanent posterior teeth once in five years
■ Space maintainers: If provided to maintain and not regain space for missing primary teeth
■ Filling repair or replacement: One per tooth surface in 24 months unless special need is shown
■ Fillings: Composites on posterior and anterior teeth
■ Preventative: Direct application veneers to restore teeth to form and function
Endodontics
■ General endodontic exam: One in five years
■ Root canal therapy: Once per tooth in any 24-month period
Prosthodontics – removable
■ Denture relines and liners: One in 24 months
■ Denture repair: All repairs, including those requiring impressions
■ Tissue conditioning: One in 24 months
Surgical procedures
■ Procedures for extractions and other oral surgery including pre- and post-operative care
■ General surgery exam: One in five years
■ General anesthesia: Facilities for general anesthesia – when required in conjunction with covered dental surgery (or where medically necessary - with prior approval)
Periodontics — 60% co-insurance
■ General periodontic exam: One in five years
■ Recall or specific exam: One in 12 months per dentist
■ Scaling and root planing: No unit maximum
■ Surgical: Periodontal surgery, osseous surgery, osseous grafts, soft tissue grafts
■ Non-surgical: Provisional splinting, scaling and root planing in excess of six units in 12 months, management of oral infections, desensitization
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CPAP Machines: Sleep apnea appliances up to a combinedmaximum of $1,500 per participant once in any five-year period.
Hearing aids: Charges for the purchase of hearing aids on the written order of a physician or audiologist, or the repair to a combined maximum of $600 per participant in any four-year period
CPAP Machines: Sleep apnea appliances up to a combined maximum of $1,500 per participant once in any five-year period.
Auxiliary care: Up to a maximum of $1,000 per participant each policy year
Foot orthotics: Up to a maximum of $200 per participant per policy year on the written order of a physician or podiatrist
Orthopedic shoes: Maximum of $250 per participant each policy year. Custom-made orthopedic shoes and/or adjustments to stock item footwear on the written order of a physician (stock item footwear excluded)
Custom-fitted braces: Once in a 24-month period for custom-fitted braces, which incorporate a rigid metal or plastic support, on the written order of a physician
Blood-testing monitors: Up to a maximum of $150 once in any five-year period on the written order of a physician
Wheelchairs: Manual wheelchairs certified in writing by the attending physician as medically necessary for the condition of the participant. Purchase of a wheelchair is limited to a maximum of one wheelchair per participant in any three-year period on a pre-approved basis only
Medical aids: Splints, cervical collars, trusses, crutches, casts, canes, walkers and traction kits (walkers and traction kits are provided on the written order of a physician)
Dental
$750 maximum for each participant and each dependent, per policy year (September 1 - August 31)
Coverage is for usual and customary dental fees, as determined by Alberta Blue Cross, and will be based on charges applicable in the provider’s province of dental practice.
Basic dental — 80% co-insurance
Diagnostic
■ Recall or specific exam: One in six months if under 19, one in 12 months age 19 and over per dentist
■ Bite-wing X-rays: One set in six months if under age 19, one set in 12 months for age 19 and over
■ Panoramic or full mouth series: One in 24 months Comprehensive exam: One per participant in any in five year period for covered dental specialty
■ Consultations: If supplied for covered services by a consultant dentist on the formal request of a referring dentist
■ Emergency exams: When necessary due to sudden development of pain or accident
Preventative
■ Cleaning: Once in six months if under age 19 and once in 12 months for age 19 and over
■ Scaling and root planing: Maximum of six units every 12 months
■ Fluoride: One in six months if under age 19 and one in 12 months for age 19 and over
■ Pit and fissure sealant: Limited to individuals under 19 and permanent posterior teeth once in five years
■ Space maintainers: If provided to maintain and not regain space for missing primary teeth
■ Filling repair or replacement: One per tooth surface in 24 months unless special need is shown
■ Fillings: Composites on posterior and anterior teeth
■ Preventative: Direct application veneers to restore teeth to form and function
Endodontics
■ General endodontic exam: One in five years
■ Root canal therapy: Once per tooth in any 24-month period
Prosthodontics – removable
■ Denture relines and liners: One in 24 months
■ Denture repair: All repairs, including those requiring impressions
■ Tissue conditioning: One in 24 months
Surgical procedures
■ Procedures for extractions and other oral surgery including pre- and post-operative care
■ General surgery exam: One in five years
■ General anesthesia: Facilities for general anesthesia – when required in conjunction with covered dental surgery (or where medically necessary - with prior approval)
Periodontics — 60% co-insurance
■ General periodontic exam: One in five years
■ Recall or specific exam: One in 12 months per dentist
■ Scaling and root planing: No unit maximum
■ Surgical: Periodontal surgery, osseous surgery, osseous grafts, soft tissue grafts
■ Non-surgical: Provisional splinting, scaling and root planing in excess of six units in 12 months, management of oral infections, desensitization
Out of ProvinceEmergency Travel Benefits
attainment of your 75th birthday. Coverage for your spouse (if applicable) will also terminate upon your attainment of age 75,regardless of what age your spouse is at the time.
This is a summary of the important features of the Core Plan. The exact terms and conditions of this plan are described in
Alberta Blue Cross. In the event of a discrepancy between this brochure and the contract, the contract will be deemed accurate and prevails. Please see Exclusions and Limitations section (page 14) for exclusions applicable to the Core Plan.
Overview
Time and Dollar Limits
Please note these guidelines may change in the future.
(http://www.cra-arc.gc.ca)
Physicians are strongly advised to discuss all tax implications with their accountants and/or tax advisors prior to enrolling in
The Canada Revenue Agency (“CRA”) has issued administrative statements indicating that in its view sole proprietors without any full-time employees are not eligible to participate in private health services plans (“PHSP”) such as the Cost-Plus Plan. The CRA’s administrative position contradicts the stated policy of the provisions of the Income Tax Act (Canada) enacted to allow sole proprietors to
sole proprietors is widespread. The CRA has requested amendments and guidance from the federal Department of
*
Unincorporated Physician WithNo Arm’s-Length Employees*
Unincorporated Physician With Less Than50% of Employees at Arm’s-Length
* A qualifying arm’s-length employee is generally a full-time employee who is not connected to the physician employer by marriage,
Physicians are strongly advised to discuss all tax implications with their accountants and/or tax advisors prior to enrolling in
The Canada Revenue Agency (“CRA”) has issued administrative statements indicating that in its view sole proprietors without any full-time employees are not eligible to participate in private health services plans (“PHSP”) such as the Cost-Plus Plan. The CRA’s administrative position contradicts the stated policy of the provisions of the Income Tax Act (Canada) enacted to allow sole proprietors to
sole proprietors is widespread. The CRA has requested amendments and guidance from the federal Department of
*
Unincorporated Physician WithNo Arm’s-Length Employees*
Unincorporated Physician With Less Than50% of Employees at Arm’s-Length
* A qualifying arm’s-length employee is generally a full-time employee who is not connected to the physician employer by marriage,
t:
Because of the many variable circumstances that exist, physi-cians are strongly advised to discuss with their accountants and/or tax advisors the tax implications of enrolling in the AMA
annual deductions available to the physician or professionalcorporation.
Professional Corporations
The cost of equivalent coverage and the $1,500/adult,$750/child deductibility limits do not apply to payments made by a professional corporation to provide benefits and coverage to the physician and his or her family. Such payments will be deductible as long as they are reasonable, were made for a business purpose and were not a taxable shareholder’s beneft to the physician.
Where the professional corporation’s only employee is the physician, it is possible for a professional corporation to deduct from its business income the amount of the Core Plan and Cost-Plus Plan expenses. One of the factors that CRA and the Courts review on a case by case basis is whether a reasonable element of risk exists after reviewing all of the relevant facts. Setting a reasonable Cost-Plus Plan limit amount plays an important role for the Courts and CRA in determining whether an appropriate level of risk (the insurance element) exists. The Courts and the CRA have determined in some cases that there is no reasonable element of risk because benefits were received by the sole employee in his or her capacity as a shareholder and as a result, the benefits could not be considered part of a reasonable employee remuneration package. This results in the corporation being unable to deduct the Cost-Plus Plan expenses, and the shareholder must also include a taxable shareholder’s benefit in the physician’s personal income as a result of the payment of such benefits. As a result, in circumstances where a participant physician is the sole employee, it is important that the physician consult with his or her tax advisors to obtain advice and assistance with respect to setting a reasonable Cost-Plus Plan limit amount. Additionally, the professional corporation and the physician may also wish to consider entering into a written employment agreement imposing on the professional corporation an obligation to maintain for the physician a private health services plan.
If the professional corporation employs additional, arm’s-length or non-arm’s-length employees, the cost of providing Core Plan and Cost-Plus Plan benefits to these employees is also deductible. The administrative position of the CRA is that the$1,500/year (adult) and $750/year (child) limitations that apply to unincorporated physicians are presumed to be reasonable. However, amounts in excess of such limits may also be reasonable depending on the circumstances. Since the physician is typically the single most important asset to the professional corporation, it generally is reasonable to provide greater benefits to the physician than to clerical and other staff. However, benefits and coverage must be distributed consistently to employees based on their status and contribution to the incorporated practice and not on the basis of their relationship to the physician.
As with unincorporated physicians, coverage must be offered to all full-time employees in order for the expense to qualifyas a business deduction.
In the examples following, it is assumed that there is an employment relationship between the physician shareholder and the professional corporation.
Example 8
Married physician with three dependent children, no arm’s length employees. Physician’s spouse is employed by the professional corporation.
Deduction limit:The professional corporation can deduct Core Plan and Cost-Plus Plan expenses provided they are reasonable.
Example 9
Married physician with three dependent children. Physician employs his or her spouse plus two arm’s-length employees. Corporation provides Core Plan and $5,000 Cost-Plus Plan benefits to physician and Core Plan and $5,000 Cost-Plus Plan beneft to each arm’s-length employee.
Deduction limit:The full cost of providing these benefits is deductible.
Example 10
As in Example 9, except physician does not offer any coverage to his two employees.
Deduction limit:Due to the fact the physician is not offering coverage to all full-time employees, the cost of providing Core Plan and Cost-Plus Plan benefits for himself and his family is generally presumed by CRA to be a personal expense and will not be deductible. The physician may also be taxed on the cost of the coverage as a shareholder beneft.
For further information on the income tax implications of Private Health Services Plans, refer your professional advisor to the following:
■ IT85R2 – Health and Welfare trusts for employees
■ IT339R2 – Meaning of Private Health Services Plans
■ Income Tax Folio S1-F1-C1: Medical Expense Tax Credit
■ Section 20.01 of the Income Tax Act (for unincorporated physicians)
■ Section 248 of the Income Tax Act (for definitions)
IT85R2 – Health and Welfare trusts for employees
IT339R2 – Meaning of Private Health Services Plans
Professional CorporationsProfessional Corporations
The cost of equivalent coverage and the $1,500/adult,$750/child deductibility limits do not apply to payments made by a professional corporation to provide benefits and coverage to the physician and his or her family. Such payments will be deductible as long as they are reasonable, were made for a business purpose and were not a taxable shareholder’s beneft to the physician.
Where the professional corporation’s only employee is the physician, it is possible for a professional corporation to deduct from its business income the amount of the Core Plan and Cost-Plus Plan expenses. One of the factors that CRA and the Courts review on a case by case basis is whether a reasonable element of risk exists after reviewing all of the relevant facts. Setting a reasonable Cost-Plus Plan limit amount plays an important role for the Courts and CRA in determining whether an appropriate level of risk (the insurance element) exists. The Courts and the CRA have determined in some cases that there is no reasonable element of risk because benefits were received by the sole employee in his or her capacity as a shareholder and as a result, the benefits could not be considered part of a reasonable employee remuneration package. This results in the corporation being unable to deduct the Cost-Plus Plan expenses, and the shareholder must also include a taxable shareholder’s benefit in the physician’s personal income as a result of the payment of such benefits. As a result, in circumstances where a participant physician is the sole employee, it is important that the physician consult with his or her tax advisors to obtain advice and assistance with respect to setting a reasonable Cost-Plus Plan limit amount. Additionally, the professional corporation and the physician may also wish to consider entering into a written employment agreement imposing on the professional corporation an obligation to maintain for the physician a private health services plan.
If the professional corporation employs additional, arm’s-length or non-arm’s-length employees, the cost of providing Core Plan and Cost-Plus Plan benefits to these employees is also deductible. The administrative position of the CRA is that the$1,500/year (adult) and $750/year (child) limitations that apply to unincorporated physicians are presumed to be reasonable. However, amounts in excess of such limits may also be reasonable depending on the circumstances. Since the physician is typically the single most important asset to the professional corporation, it generally is reasonable to provide greater benefits to the physician than to clerical and other staff. However, benefits and coverage must be distributed consistently to employees based on their status and contribution to the incorporated practice and not on the basis of their relationship to the physician.
As with unincorporated physicians, coverage must be offered to all full-time employees in order for the expense to qualifyas a business deduction.
In the examples following, it is assumed that there is an employment relationship between the physician shareholder and the professional corporation.
Example 8
Married physician with three dependent children, no arm’s length employees. Physician’s spouse is employed by the professional corporation.
Deduction limit:The professional corporation can deduct Core Plan and Cost-Plus Plan expenses provided they are reasonable.
Example 9
Married physician with three dependent children. Physician employs his or her spouse plus two arm’s-length employees. Corporation provides Core Plan and $5,000 Cost-Plus Plan benefits to physician and Core Plan and $5,000 Cost-Plus Plan beneft to each arm’s-length employee.
Deduction limit:The full cost of providing these benefits is deductible.
Example 1O
As in Example 9, except physician does not offer any coverage to his two employees.
Deduction limit:Due to the fact the physician is not offering coverage to all full-time employees, the cost of providing Core Plan and Cost-Plus Plan benefits for himself and his family is generally presumed by CRA to be a personal expense and will not be deductible. The physician may also be taxed on the cost of the coverage as a shareholder beneft.
For further information on the income tax implications of Private Health Services Plans, refer your professional advisor to the following:
■ IT85R2 – Health and Welfare trusts for employees
■ IT339R2 – Meaning of Private Health Services Plans
■ Income Tax Folio S1-F1-C1: Medical Expense Tax Credit
■ Section 20.01 of the Income Tax Act (for unincorporated physicians)
■ Section 248 of the Income Tax Act (for definitions)
Tax Advantage
* Assumed that physician would not qualify for the Medical Expense Tax Credit.
** The illustration, shown at right, of tax savings is based on certain assumptions including the effective rate at which the physician and the professional corporation will be taxed and the amount of income earned in the year by the professional corporation. The ultimate tax savings will depend on the particular circumstances of the physician and the professional corporation.
Core Plan
Cost-Plus Plan
Enrollment Deadline
When Coverage Begins
Participant Coverage Changes
Termination
Should a participant die while coverage is in effect, his/her eligible dependents will remain on the Core Plan for a further24 months at no cost, after which coverage will terminate.
Submitting Claims
Coordination of Benefits
Be sure to consult with your professional tax advisor before signing the Participation Agreement. Please see the “Tax Implications” section (pages 8 – 11) of this brochure formore information.
(please see information and examples in thisregard starting on page 8). The participant is required to maintainoriginaland
Extended Health Care
Dental
Out of Province Emergency Travel Benefits
A
Dedicated to serving Alberta’s medical profession. Our specialty is you.
This brochure is not a legal document. It is not intended to give legal, tax or accounting
advice, and should not be treated as a substitute for specific advice concerning your
individual situation.
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