The 2016 British Columbia budget announced changes beginning January 1, 2017 to Medical Services Plan (MSP) premiums that will result in an increase to payroll costs for members who reimburse employees’ MSP premiums. Married employees with no children earning over $45,000 annually face a $240/year (14.71%) increase, while some citizens with annual incomes less than $42,000, and single parents with children, will receive modest decreases in premiums. Since many employers pay or reimburse their employees’ premiums, this represents a 4% to 5% increase, on average, for many in payroll costs.

On balance, British Columbia has among the lowest provincial income tax rates and average payroll costs.

Next Steps:

RCC will monitor increases over the coming years and continue to remind government that increases in MSP premiums result in higher payroll costs.

Background:

The two opposition parties and some non-governmental organizations have encouraged the government to either roll MSP premiums into the personal income tax regime, or to include MSP premium payment in income tax filings. The government’s response in its budget was to allow MSP premiums to continue to increase between 4% and 5% each year for the next three years and provide further support to low-income individuals and families.

If you have any questions or concerns, please don’t hesitate to contact: Greg Wilson, Director, Government Relations (B.C.) at: [email protected] or +1 (604) 736-0368