With a bold headline, Strong economy pays dividends, the BC Provincial Government announced on September 15, 2016, that it would be scrapping the proposed 4% BC MSP premium rate increase that it had announced earlier this year.
“B.C.’s strong economic growth and better-than-forecast revenues” are Finance Minister Mike de Jong’s reasons for the government’s decision to scrap the premium increase and to deliver “dividends” to British Columbians.
Who doesn’t benefit from the reversal of the 4% BC MSP premium increase?
As we wrote in April of this year, changes to BC MSP premiums and the rate structure, meant that couples without children and who did not qualify for premium assistance would be paying more. At that time, couples earning more than $45,000 (adjusted net income) would be paying $240 more per year.
With the reversal of the 4% premium rate increase, effective January 1, 2017, these same couples will be paying slightly less, but remain on the hook for $168 more per year. CTV News reported that approximately 530,000 couples will see their premiums increase as of January 1, 2017. View here.
Who benefits from the reversal of the 4% BC MSP premium increase?
As of January 1, 2017, adults and families who qualify for regular premium assistance will see a further 4% savings on their MSP premiums beyond those announced in the 2016 Budget. In the 2016 Budget, the government expanded the range of incomes for regular premium assistance ($42,000 versus $30,000) and eliminated premiums for children under 19 years of age. MSP Monthly Premium Rate Tables for 2016 and 2017 are available here.
Will BC businesses be paying more in BC MSP premiums in 2017?
Based upon the February 16, 2016, premium increase, we had predicted that employers would likely be paying about 4% more. Our expectation, based on the cancellation of the increase, is that the financial impact will be diminished in 2017. However, the following factors should be considered:
1. Workforce composition
2. Number of employees eligible for regular premium assistance
3. Number of eligible employees who have applied for regular premium assistance
4. Percentage of BC MSP premiums paid on behalf of employees
Savings tip for BC businesses!
If you hire students or individuals new to the workforce you can save money. Encourage these employees to apply for BC MSP Regular Premium Assistance since premiums are based on an individual’s net income (or a couple’s combined net income) for the preceding year. You should also encourage dependents who are 25 years of age to apply for coverage, as they may qualify for full premium subsidy. To see if you qualify for regular premium assistance, visit the premium eligibility calculator here.