LLQP Accident & Sickness · Component 2.1 · 30% of the exam
Under Canadian tax rules, employer-paid premiums for group extended health and dental coverage are:
- Not a taxable benefit to employees, except under Quebec rules, and deductible to the employer
- BTaxable to employees in every province, in the same way as employer-paid group life insurance premiums
- CTaxable to the employer as a shareholder benefit whenever the owner is also a member of the plan
- DNever deductible to the employer, since health benefits are a personal expense of each employee
Correct answer: A) Not a taxable benefit to employees, except under Quebec rules, and deductible to the employer
Private health services plan premiums are a tax-favoured benefit federally. Quebec treats them as a taxable benefit provincially. Group life and employer-paid LTD are handled differently.
Why the other options are wrong
- BFederally they are non-taxable; only Quebec treats them as a taxable benefit provincially.
- CThe employer deducts them as a business expense.
- DThey are deductible to the employer.
Exam tip
Employer-paid health/dental: non-taxable federally, taxable in Quebec provincially, deductible to employer.
Common mistake
Applying the LTD taxability rule to health and dental premiums.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Accident & Sickness module. Written against the published curriculum.
More from component 2
- A group benefits booklet lists AD&D coverage alongside life and LTD. The AD&D benefit pays:
- A hospital indemnity (hospital cash) policy pays:
- Employment Insurance sickness benefits are available to:
- Which government program coordinates with an individual DI policy through a possible offset AND also affects the definition of insurable income?
- A group plan's 'eligibility waiting period' (probationary period) is:
- A CI policy that is 'convertible' allows the insured to:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.