ARCHIVED CD 2010-018

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• Information Notice to Employees

November 3, 2010

SUBJECT: British Columbia Medical Services Plan Premiums Refund Procedures

1. PURPOSE

1.1 The purpose of this directive is to provide you with instructions regarding the revised procedures for the British Columbia (BC) Medical Services Plan (MSP) premium refunds.

1.2 An information notice to employees has been included with this Compensation Directive.

1.3 The information on the BC MSP Web site and associated links are available in English only and fall under the jurisdiction of the government.

1.4 Public Works and Government Services Canada (PWGSC) has decided to standardize the BC MSP premiums refund procedures.

2. POLICY

2.1 To qualify for health care benefits in BC , a person must be a resident of that province. Please refer to the BC MSP Group Procedure Guide for the detailed eligibility criteria.

2.2 There are two rules in the BC MSP Group Procedure Guide regarding premium refunds, one for retroactive cancellation and the other for duplicate coverage. See section on cancellation of benefits in the guide.

2.2.1 The retroactive cancellation rule permits a refund up to a maximum of two months, including the current month. For example, if a cancellation request is received by the compensation advisor (CA) during December, the premiums paid for November and December will be refunded.

2.2.2 The duplicate coverage rule permits a refund up to a maximum of five years only if duplicate coverage occurred. Any refund of more than two months must be approved in writing by the BC MSP. Before taking any action in the Regional Pay System (RPS), the CA must have the authorization letter that the employee obtained from BC MSP stating that duplicate coverage has occurred and that they approved the refund for a specific period.

3. PROCEDURES/INSTRUCTIONS FOR DEPARTMENTS

3.1 To administer this employee benefit, CA s should be using the BC MSP Group Procedure Guide in conjunction with these procedures, and the information provided by the Treasury Board Secretariat (TBS), the Compensation Directive 1995-032 and the Personnel-Pay Input Manual (PPIM).

When the CA s receive an employee's request for a refund with the BC MSP refund authorization letter, they will initiate any required pay actions in the RPS , as described in the Personnel-Pay Input Manual.

As the maximum adjustment allowed is "up to two months" according to the MSP Group Procedure Guide, it is imperative that CA s process the appropriate pay actions through the RPS and forward completed and signed forms to BC MSP immediately.

3.2 CA s must inform all new employees of the following information:

1. The amount of the premium;
2. The premiums are paid one month in advance of coverage;
3. The federal government pays 50 % of the employees' premiums;
4. The employer's share is a taxable benefit;
5. The earliest day of coverage is the first day of the month following the date of employment or rehire, provided the employee and dependants meet the admissibility requirements for the provincial health care benefits and the Application for Group Enrolment (Group Procedure Guide HLTH 167) form has been completed and submitted to the CA. Otherwise, the coverage will be the first of the month following the date the employee's Group Procedure Guide HLTH 167 application form is received by the CA ;
6. No retroactive applications are allowed. All enrolment, changes and cancellations are administered on a current basis only and are based on the date that the CA received the properly completed forms. The two-month rule will apply to all cancellations, unless authorized by BC MSP because it is a case of double coverage;
7. The BC MSP Application for Group Enrolment (HLTH 167) form is available on the following Web site: Group Procedure Guide MSP Group Administrators - Health Insurance - Ministry of Health. The CA may provide the employee with a printed copy that, once completed, must be returned to the CA for processing. The federal government requires that the PDF form be completed, printed and submitted to the CA for processing. The CA will forward the employee's completed application form to BC MSP after adding the employer information; and
8. CA s must also advise all new employees of their responsibilities with regard to the medical health coverage. The most important employee responsibilities are listed in the attached information notice to employees.

3.3 To reduce the cases of duplicate coverage, departments are requested to send their employees a yearly reminder to verify if they still need their Federal Group Plan coverage, or if an amendment is required due to a change in their personal situation (e.g. due to a change in marital or family status). This will reduce the number of cases of duplicate coverage of more than a year and the additional administrative work related to the amendment of previous year T4s.

3.4 CA s are responsible for starting, amending, and stopping the BC MSP deduction code692 in the RPS in a timely manner after the proper documentation is received from the employees. Unless a deduction is stopped, the RPS generates adjustments based on the transaction type and the effective date.

3.5 CA s are responsible for requesting a refund under the two-month retroactive cancellation rule by processing the appropriate pay action in the RPS , as described in the PPIM.

3.6 In cases where there is a refund due to duplicate coverage, CA s must place the BC MSP approval letter authorizing the refund in the employee's file for audit purposes as it could be requested by the PWGSC pay offices (PO s).

3.7 When T4s must be amended for previous years, compensation managers must notify the PWGSC regional PO managers in writing that the BC MSP approved the refund, attach a copy of the BC MSP approval and all relevant T4s.

3.8 To STOP the BC MSP deduction code 692, the CA s must create a Deduction - Stop (DES) 692 transaction with the effective date of cancellation.

3.9 To AMEND the BC MSP deduction code 692 for previous years, the CA s must create a separate, closed period, Deduction - Amend (DEA) 692 transaction for each calendar year with the applicable effective dates. Furthermore, if there had been a rate change during the period of retroactivity, the CA s will have to process additional closed periods. For the current calendar year a DEA 692 transaction effective January 1 with an open period must be created.

NOTE: The override indicator must be used for all prior year(s) transactions to ensure that the T4 information is adjusted correctly by the PO.

4. PROCEDURES/INSTRUCTIONS FOR PAY OFFICES

4.1 The pay and pension agent must take the following actions when edit messages are received:

4.1.1 Deduction - Stop -- Pay Action Code (PAC) 16S692

For the current year:

• INPUT a Supplementary Deduction Refund (SDR) (PAC 77R).

For the previous year:

• INPUT a SDR (PAC 77R).

For the previous year minus one year or more:

• REFUND with a manual cheque and
• AMEND the gross pay and taxable benefits on the corresponding T4 by the refund amount.

4.1.2 Deduction - Amend -- PAC 16A692 net decrease in the rate

For the current year the system will automatically process the correct transactions.

For the previous year:

Using the override indicator

• INPUT a SDR (PAC 77R) for the amount previously taken;
• INPUT a SDE PAC 77 for the amended rate (this action will decreases element 718 automatically);
• DECREASE the current year element 718 by the amount of the employer share to be paid; and
• INCREASE the previous year element 718 by the amount that must be paid.

For the previous year minus one year or more:

• ISSUE a refund with a manual cheque and

• AMEND the employment income (boxes 14 and 40) of the corresponding T4 by the net amount of the refund.

4.1.3 Deduction - Amend -- PAC 16A692 - net increase in the rate

For the current year the system will automatically process the transactions.

For the previous year:

 Using the override indicator:

• INPUT a refund of deductions (REF) (PAC 16R) for the amount previously deducted;
• INPUT an arrear (ARR) (PAC 17C) to enter the amended amount;
• DECREASE the current year element 718 by an amount equal to what is being recovered (ARR, PAC 17C); and
• INCREASE the previous year element 718 by the same amount being recovered.

For the previous year minus one year or more:

• INPUT a REF (PAC 16R);
• INPUT a ARR (PAC 17C);
• DECREASE element 718 by an amount equal to what is being recovered (the ARR, PAC 17C); and
• INCREASE the gross pay and taxable benefits for the corresponding year(s) of the adjustment.

4.2 When applicable, the previous year T4s must be amended according to established procedures.

5. INQUIRIES

5.1 Any inquiries on the information contained in this document should be addressed to your PWGSC Compensation Services Office.

Original Signed by
Carrie E. Roussin

Carrie E. Roussin
Director General
Compensation Sector
Accounting, Banking and Compensation

Reference(s): CJA 9248-5