On February 16, 2016 British Columbia’s Ministry of Finance announced upcoming changes to BC Medical Services Plan (MSP) premiums. These changes take effect January 1, 2017. As the government’s backgrounder suggests, the upcoming changes are designed to benefit single parent and low-income families. All children will be exempt from MSP premiums and the new premium structure does away with Family of Three or More and Family of Two rates. The new premium rate structure – $78/month per Single Adult – is based upon the number of adults in a household. For more information on the upcoming changes and regular premium assistance, visit the BC Government’s website click here.
Who saves under the new 2017 BC MSP premium rate structure?
In our opinion, the short answer is single parent and low-income families who meet the premium assistance threshold. The long answer is that most BC residents and businesses may not see any savings and, in fact, will likely be paying more.
BC businesses potentially paying at least 4% more in BC MSP premiums.
Depending on workforce composition, number of employees eligible for regular premium assistance, and the percentage of BC MSP premiums paid on behalf of employees, BC businesses can likely expect an increase of at least 4% in 2017. Here’s why:
In 2017, couples will pay $20 more/month or $240 more/year.
At first glance it doesn’t appear that doing away with the Family of Three or More and Family of Two rates would raise premiums, but consider the effect on an adult couple under the new rate structure.
Currently, an adult couple without premium assistance is paying the Family of Two rate of $136/month or $1632/year. Under the rate structure effective January 1, 2017, this same adult couple will pay $156/month (2 x $78/month) or $1872/year. This couple will pay $240 more for their BC MSP premiums in 2017.
Savings tip for BC businesses
If you hire students or individuals new to the workforce you can save money. This applies to the current year, but will be even more of an advantage in 2017. Encourage these employees to apply for 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 MSP Premium Assistance Calculator
More details to come!
A recent phone call to BC MSP confirms that details are still being worked out about the implementation of 2017 premium rate changes…we should all stay tuned.