Saskatchewan’s announcement that it’s reinstating its provincial sales tax exemption for life and health insurance premiums is welcome news for plan sponsors in the province. 

Debra Wiegers, a benefits consultant and head of the group benefits division at Saskatoon-based Wiegers Financial & Benefits, says calculations conducted by some of her employer clients show savings of between $75,000 and $100,000 with the exemption. “This isn’t chump change,” she says.

“I’m embracing it. I think it’s good news. I would have been OK even if they would have gone 50 per cent on this . . . . But I was, to be honest, quite surprised that it came along this quickly and that it was a total reversal.” 

Read: Saskatchewan tax on insurance premiums ‘not good public policy’

In August 2017, Saskatchewan introduced a six per cent provincial sales tax for all group benefits plans with life, accident and health insurance policies. The exemption announced on Monday is retroactive to Aug. 1, and will cover group life and health insurance premiums, including disability, accident and sickness insurance.

Information about refunds for employers and individuals that paid tax on insurance premiums will be available by April 10, according to the government, which noted in a news release that it has to work with the insurance industry to identify the best method for refunds.

Wiegers doesn’t believe the process will be an easy one. “I think there’s going to be a lot of inequity in terms of billing statements for a few months . . . and we’ll have to go back,” she says.“So it will create another level of work for everybody involved.

“Or we can hope everybody will sit with patience and . . . say that within three to four months the dust will all settle,” adds Wiegers.

Read: Employers urged to prepare for Saskatchewan insurance tax

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required