Tax Rates/Credits -> BC Tax -> Medical Services Plan (MSP)
BC Medical Services Plan (MSP)
The health care program in BC is called the BC Medical Services Plan, or MSP. BC charges an annual fee, also called a premium, for this plan. The rates are shown in the table at the bottom of the page.
MSP insures medically required services provided by physicians and supplementary health care practitioners, lab services, and diagnostic procedures. Prescription medications are covered separately by Pharmacare, but one must register separately for Pharacare. Most dental services are not covered by MSP. For more detailed information on what benefits are covered by MSP, see the BC Ministry of Health MSP home page.
In order to recover the revenue lost by eliminating the MSP premiums, the government will implement an Employer Health Tax effective January 1, 2019, for employers with a total annual payroll exceeding $500,000. This means that employers who pay their employees' MSP premiums will be paying both the MSP premiums and the EHT for 1 year before the MSP premiums are eliminated.
Charities and non-profits will pay EHT when total annual payroll exceeds $1,500,000, and this threshold will be applied to each location of the organization with BC payroll.
Annual payroll includes bonuses, vacation pay, taxable benefits and other taxable payments to employees. See Employer Health Tax on the government of BC website.
The BC NDP Government announced in a November 2, 2017 news release that they had formed a task force to advise on eliminating MSP premiums within four years, and to examine the best approach to replacing the revenue from the premiums. Their final report was due March 31, 2018. See MSP Task Force - Results.
There is premium assistance available, based on adjusted net income for the preceding tax year for an individual or couple, but the premium is not collected through the income tax system. The premium for many employees or pensioners is paid, in part or in full, by their employers or former employers, directly to the government. It is not unusual for low-income pensioners to not realize they are overpaying for their premiums, especially if they are only paying a portion of the premium and their employer is paying the rest. There are many low-income seniors also paying their premiums directly without realizing that premium assistance is available.
We are currently trying to recover retroactively premiums paid by a veteran for whom 50% of full MSP premiums were being deducted from his Canadian Forces Pension. The elderly veteran did not even realize what was being deducted from his pay, and knew nothing about premium assistance. We've been told that because the premiums were paid through a group plan that does not allow premium assistance, a retroactive refund past the beginning of the year is not available. However, there is no mention of this in the Act or Regulation, so we are appealing the decision.
As per section 12.1 of the Medical and Health Care Services Regulation (link above), when a spouse is in a hospital, nursing home or long term care, and fees are being paid for this care, their income is not included in the income calculation for premium assistance. However, this income exclusion does not apply if:
- the sum of the net income of both spouses totals more than $54,000, or
- the fees for the care are being paid by someone other than either spouse.
We could not find information about this on the BC MSP website. When we spoke with someone at Health Insurance BC (HIBC) about this, they called this an "involuntary separation" and indicated that a form should be submitted which seems to remove that person from the MSP coverage. When we spoke to a second person about this and indicated that we would submit the application for regular premium assistance but omit the income of the spouse in care, they indicated this would be appropriate.
In order to pay reduced premiums, a person must make application to the Medical Services Plan. There are 2 types of premium assistance - regular premium assistance, and temporary premium assistance. MSP premiums can be temporarily waived in certain financial hardship situations. For more information, and to get the application form for regular or temporary premium assistance, go to the MSP web page MSP Premiums. When a person is receiving premium assistance, they are also eligible for supplementary benefits which include chiropractic, acupuncture, and massage therapy visits.
The application form for premium assistance requires the provision of your net income from your Notice of Assessment or Notice of Reassessment, and you must input the tax year for which you are providing this information. By signing the application form you are giving the Ministry of Health and/or Health Insurance BC permission to verify your income with Canada Revenue Agency (CRA) on an ongoing basis. The form states that "In most cases, you do not need to reapply for Regular Premium Assistance as Health Insurance BC will continue to verify your income with CRA each year and will maintain or adjust your level of assistance on the information received from CRA. In order to verify your income, the name and date of birth on your MSP account must match the information on file at CRA."
Retroactive Refunds for MSP Premium Assistance
You can also apply for premium assistance retroactively, and get a refund of premiums paid. Their policy is that they will refund up to 7 years of overpayments (as per a person I spoke with at MSP), but the legislation puts no limit on the number of years that may be refunded where there is evidence of financial hardship. You may have to actually request a payment of the refund, as they might just keep it to apply to future premiums.
Adjusted net income is calculated by taking
for the previous tax year, and making the following deductions:
Children are no longer eligible for coverage as dependents when they:
The adjustment for being 65 years old applies when the persons becomes 65 at any time during the year. See the tables of MSP rates for the current year to see at what adjusted net income premium assistance is available. For instance, in 2017, a couple age 65 years or older would qualify for reduced premiums with combined net income before adjustments of $51,000 or less. The adjusted net income would be $51,000 - 3,000 (spouse) - 3,000 (over 65) - 3,000 (spouse over 65) = $42,000.
MSP premium rates can also be found on the BC Ministry of Health website.
Revised: July 30, 2019
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