It’s been over a year since the federal government launched the Canadian Dental Care Plan (CDCP). While it’s designed to provide support to families and individuals with dental care, employers are left with a lot of questions about how it impacts their employee benefits.
What’s important to remember is that the government has stated this is an interim benefit, meaning it will change over time. With this in mind, employers should not rush to make changes to their benefit programs in response to the Canadian Dental Care Plan. But, it’s definitely helpful to stay informed and understand how the current situation impacts your business and your employees.
Let’s explore some of the details from the interim plan to understand what it means for your employee benefits plan right now.
The Basics: currently available to children and seniors with no access to employee benefits
Families are eligible for the Canadian Dental Care Plan based on their income (less than $90,000 a year), the age of their dependents (under 12), and whether they are included in any sort of private dental insurance plan. The annual benefit can be anywhere between $260 to a maximum of $650 per year for each child under 12 years old.
However, if any family member has access to private dental insurance, then the family is considered to be ineligible for the Canadian Dental Care Benefit. This is a key point to keep in mind, because if your employee benefits plan includes dental care in any shape or form, including insured plans, self-funded plans, or even a Healthcare Spending Account, then your employees cannot access the benefits offered by the government. They key term here is access to dental care. Even when an employee is waiving dental benefits, as long as they are given the option to join the plan, they become ineligible for the Canadian Dental Care Benefit.
Seniors over age 70 are also eligible to apply now, followed by seniors over 65 who can apply in May 2024. The criteria for seniors is similar – applicants must be Canadian residents with no access to private dental insurance or employee benefits, and household income of less than $90,000 per year. It’s important to note the fact that Dental associations across Canada are cautioning seniors to not cancel any existing dental care insurance until government provides more details on coverage.
The next phase of the Canadian Dental Care Benefit is to extend coverage to seniors over 65 as mentioned above, followed by adults with disabilities, and children under 18. All remaining Canadian citizens won’t be able to access the program until 2025 at the earliest. The full schedule can be found here.
Sun Life is the administrator of the Canadian Dental Care Plan
Once a person applies and qualifies, they must wait to receive a package from Sun Life before scheduling any dental appointments. The package will explain how and when a qualified person can receive dental care.
Not all dentists are participating
The government of Canada website suggests that people should make sure that their dentist is participating in the Canadian Dental Care Plan (CDCP). The problem is that the government is reimbursing dentists up to only about 70% of the current fee guide, which does not give dentists a lot of incentive to participate. If a dentist does not participate in the CDCP, then a patient has to pay out of pocket for the difference between the dentist fee and CDCP reimbursement. The Canadian Dental Care Association states that “Canadians will not be 100% covered for their treatments and in many cases, will be required to pay out-of-pocket for a portion of their treatment.”
What should employers do?
Employers really should not do anything at this time, keeping in mind that this is an interim benefit that will continue to evolve. Moreover, because the Canadian Dental Care Benefit is based on Family Income, and employers don’t have access to this information, there is really no way for the employer to be certain whether their employees would even qualify for the Canadian Dental Care Plan.
It would be best to wait until the full plan is implemented so you have clarity on these finer details.
New reporting requirements for employers
The biggest impact of the Canadian Dental Care Benefit on employers right now is how your tax reporting will change. As of the 2023 tax year, employers will now be required to report on whether they offered dental benefits to employees on T4s and T4A slips.
You’ll see this in the form of new boxes added to the T4 and T4A slips with codes to state whether dental care insurance was offered or if the employee had access to any sort of dental coverage in the given tax year. This tax reporting requirement is mandatory and will continue to be moving forward, so it’s important to familiarize yourself with those codes. Reach out to us if you have any questions about this or anything related to the Canadian Dental Care Benefit and its impact on your employee benefits.