Update: Group Insurance Premiums Subject to Retail Sales Tax in Manitoba
This communiqué concerns you if you have plan members residing in Manitoba.
As a follow up to our June communiqué, the government of Manitoba is extending the application of its 7% retail sales tax (RST) to numerous group insurance benefits. This RST amendment, which was part of Bill 39, became official on June 14 when the Bill received Royal Assent.
Effective July 15, 2012, the 7% tax applies to group life, optional and dependent life, creditor, accidental death and dismemberment, disability (short-term and long-term) and critical illness insurance premiums. The RST only applies for insured individuals residing in Manitoba. Group health and dental insurance premiums, uninsured benefits and administration fees of selfinsured group policies are not subject to the RST.
For self-administered groups, administrators will have to add the tax to their remittance and inform Industrial Alliance of the taxable premium amount. Please note that for premiums paid on a monthly basis, if the payment due date (first day of coverage of the billing period) is on or after July 15, the RST is due as of that date. However, for premium due dates prior to July 15 and covering a period including that date, the RST tax amount is not to be prorated and should not be added to the remittance of the next premium due date.
If you have any questions or concerns regarding the RST, please contact your benefits advisor or your Industrial Alliance group account executive.