Smile Bright: Understanding Canadian Dental Care Plans and Payroll Requirements
When it comes to our health, dental care often doesn't get the attention it deserves. But in Canada, ensuring you have a solid dental care plan is as crucial as brushing your teeth every day.
What is the Canadian Dental Care Plan?
A Canadian dental care plan is designed to cover various dental services, making it easier for people to access the care they need without breaking the bank. These plans can vary significantly based on your employer or the private provider you choose. Generally, they cover routine check-ups, cleanings, fillings, and sometimes even major work like crowns or bridges.
The Canadian Dental Care Plan (CDCP) is a federal government program that is intended to provide coverage for Canadian residents who do not have dental benefits and have a household income of less than $90,000 a year.
Dental care under the CDCP is expected to start in May 2024. The coverage date will be different for each person. Patients will be required to make a co-payment (that is, pay for a portion of their dental care under the CDCP) depending on their adjusted family net income, as follows:
- No co-payment of the CDCP benefit for those with an adjusted annual family net income under $70,000.
- A 40 percent co-payment of the CDCP benefit for those with an adjusted annual family net income between $70,000 and $79,999.
- A 60 percent co-payment of the CDCP benefit for those with an adjusted annual family net income between $80,000 and $89,999.
It is important to know that this is a government dental benefit; it is not a free dental program. While Health Canada encourages dentists to bill patients based on the CDCP benefit, dentists can bill their usual and customary fees. Health Canada asks patients to confirm the fees with their dentist when booking their appointment.
The CDCP is not intended to replace existing workplace or private dental benefits.
Who Can Access the CDCP?
You need to meet all the eligibility criteria to qualify for the CDCP. To qualify for the CDCP, you must meet all 4 of these requirements:
- You don’t have access to dental insurance
- Your adjusted family net income is less than $90,000
- You’re a Canadian resident for tax purposes
- You filed your tax return for the previous year
How Do I Access the CDCP?
The federal government has announced that starting in December 2023, seniors who may be eligible may receive letters inviting them to apply, with instructions on how to validate their eligibility and apply by telephone. Letters from the government will be sent according to the following age groups:
- December 2023: Ages 87 and above
- January 2024: Ages 77 to 86
- February 2024: Ages 72 to 76
- March 2024: Ages 70 to 71
In May 2024, an online application portal will be open for seniors 65 and older. If you have a valid Disability Tax Credit certificate or have a child under the age of 18, you will be able to apply online as of June 2024. All remaining eligible Canadians will be able to apply online in 2025.
What Services Will Be Covered Under the CDCP?
Health Canada has stated that the following services could be covered under the CDCP, with some services only becoming available in the fall of 2024:
- Preventive services, including scaling (cleaning), polishing, sealants, and fluoride;
- Diagnostic services, including examinations and x-rays;
- Restorative services, including fillings;
- Endodontic services, including root canal treatments;
- Prosthodontic services, including complete and partial removable dentures;
- Periodontal services, including deep scaling; and
- Oral surgery services, including extractions.
The specifics of what exactly will be covered under the CDCP have not yet been released.
Types of Dental Insurance in Canada
In Canada, dental insurance typically falls into several categories:
1. Employer-Sponsored Plans: Many employers offer dental plans as part of their employee benefits. These usually cover a significant portion of standard dental services.
2. Private Plans: If your employer doesn’t provide coverage, you have the option to buy a personal plan. These can sometimes be tailored to your specific needs.
3. Government Programs: Certain provinces have programs for low-income families and individuals, giving them access to necessary dental care.
Understanding these options can help you make a more informed decision about your dental health.
Payroll Requirements for Canadian Dental Care Plan
Issuers of the T4 and T4A slips must report whether an employee or supplier and any of their family members were eligible to access dental insurance, or dental coverage of any kind, including health spending and wellness accounts, due to their current or former employment.
Visit the CRA website for more information on the Canada Dental Benefit.
Employers offering dental benefits to employees must accurately report the value of these benefits on T4 slips. Box 45 of the T4 slip is designated for reporting the total benefits and allowances provided to employees. For dental benefits, the value to be reported includes any contributions made by the employer towards the dental benefit plan on behalf of the employee.
Steps for Reporting Dental Benefits on T4s
1. Determine the Value of Dental Benefits: Calculate the total contributions made by the employer towards the dental benefit plan for each employee during the tax year.
2. Report on T4 Slips: Enter the total value of the dental benefits provided to each employee in Box 45 (Benefits and allowances) of the T4 slip.
3. Ensure Accuracy: Double-check all amounts entered on the T4 slips to avoid errors or discrepancies.
4. Issue T4 Slips to Employees: Provide each employee with their T4 slip by the deadline (typically the end of February following the tax year).
5. Submit T4 Information to CRA: Submit T4 information to the Canada Revenue Agency (CRA) by the required deadline using the appropriate filing method.
|
CODE |
DESCRIPTION |
| 1 | No access to any dental care insurance, or coverage of dental services of any kind. |
| 2 | Access to any dental care insurance, or coverage of dental services of any kind for only the payee.* |
| 3 | Access to any dental care insurance, or coverage of dental services of any kind for payee, spouse, and dependents. |
| 4 | Access to any dental care insurance, or coverage of dental services of any kind for only the payee and their spouse. |
| 5 | Access to any dental care insurance, or coverage of dental services of any kind for only the payee and dependents. |
The new requirements for employers include providing the following information:
For calendar year 2023, and moving forward, employers must indicate on the T4 slip and/or the T4a whether, on December 31st of the taxation year applicable, an employee was eligible to access dental insurance or coverage of any kind. This includes health spending accounts.
The T4 and T4A forms have now been amended to include box 45(T4) or box 015(T4A). Please note that filling out box 45 on the T4 is mandatory. If you are filling out a T4A, filling out box 45 is mandatory unless you report in box 016, Pension or Superannuation. If that is the case, then box 45 would be optional.
Employers must select one of the 5 code options to complete the tax slip:
* Payee in this case refers to the employee.
Please see the following update as per the Canadian Revenue Agency:
Use of code 1 – T4 slips filed for calendar year 2023 only
To reduce the burden on employers, for calendar year 2023 only, it is not mandatory to fill out box 45 when and only when code 1 is applicable.
This administrative policy applies only if all reasonable efforts have been made to comply with the reporting requirements.
T4 slips filed before January 2024
To reduce the burden on employers, if you filed your T4 slips for calendar year 2023 before January 2024, you do not have to file amended T4 slips to report this code.
Failing to report this information may result in financial penalties.
Seek Assistance
It is highly recommended to reach out to professional payroll accountants for further information and assistance. Filing Taxes team of expert-certified payroll accountants in Toronto is equipped to handle a wide range of payroll tasks. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.