Your organization, located in Manitoba, will be enhancing the group benefits pla
ID: 2529759 • Letter: Y
Question
Your organization, located in Manitoba, will be enhancing the group benefits plan offered to employees in two months by adding accidental death and dismemberment (AD&D) coverage and vision care coverage. The organization will pay 50% of the cost of the AD&D premiums and 50% of the cost of the vision care premiums, with the employees paying the other 50% of each premium. The Manager of Finance, Laura Bruce, has requested that you, as the Payroll Supervisor, prepare a communication for the employees, explaining how these new benefits will impact their net pay.
Explanation / Answer
Greetings dear employee,
Our organization is happy to introduce two new benefits (riders) to the current group insurance plan offered to the employees-
These riders offer benefits are over and above the current benefits offered to the employee under the current group insurance plan and are completely optional. The additional premium applicable for availing each of these benefits shall be calculated based on multiple eligibility criteria and the sum assured will vary accordingly. The employer will have to pay only 50% of the total additional premium due against these riders while the Organization will bear the rest 50% of the charges.
The tax implications of the premium for these insurance riders are as follows-
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