New National Dental Plan: What Canadian Employers Need to Know
In 2023, the Canadian government announced a new national dental care program that will provide dental coverage to qualifying individuals and families. Known as the Canadian Dental Care Plan (CDCP), this historic initiative aims to improve access to oral healthcare by easing financial barriers.
First proposed during the 2021 federal election, the CDCP was developed with the goal of providing dental coverage to uninsured Canadians who face cost barriers to accessing dental care. With the program set to launch on May 1, 2024, the CDCP represents the largest expansion of Canadian medicare since it was first established.
Once implemented, the CDCP will provide dental coverage to children under 12 years old in 2024, expanding to under 18s, seniors, and persons living with a disability in 2025. By 2026, coverage is expected to extend to all qualifying Canadian families with an income of less than $90,000 annually.
With millions set to benefit from this new national dental program, the CDCP marks an important step in improving oral health equity in Canada.
Overview of the Plan
The Canadian Dental Care Plan (CDCP) is a new national dental care program announced in 2023 that will provide partial coverage of dental services for eligible Canadians. The plan will cover a range of basic preventative and restorative dental services. According to the Government of Canada, the goal is to provide "affordable dental care for families earning less than $90,000 annually, with no co-pays for those under $70,000 annually."
The CDCP will be available to Canadian residents who meet certain income eligibility requirements. Coverage is provided based on the previous year's household income. Individuals making less than $70,000 annually and families earning under $90,000 will qualify for the plan.
The plan will help cover common dental services like teeth cleanings, check-ups, x-rays, fillings, and extractions. However, the CDCP will not cover cosmetic or elective procedures like teeth whitening or veneers. The intent is to make basic and preventative oral healthcare more affordable and accessible for middle and low-income Canadians.
Eligibility and Coverage Details
In order to be eligible for coverage under the Canadian Dental Care Plan, individuals must meet certain criteria. The main requirement is having an adjusted net family income of under $90,000. How “family” is defined depends on your personal situation - for a single person it's their income, and for families it's their household income. The $90,000 threshold is based on the prior year’s tax return.
In addition to income requirements, individuals must be Canadian residents without existing dental insurance coverage through an employer or other program. Each eligible family member can receive up to $1,300 in coverage per year for dental services. This includes common procedures like teeth cleanings, fillings, x-rays, scaling, and extractions. More extensive services like crowns, bridges, and dentures have a lifetime limit of $5,000 per person. Orthodontics like braces also have lifetime limits based on age.
When determining eligibility and coverage, household size is an important factor. Larger households can have higher income thresholds, as the $90,000 limit is based on adjusted net family income. The government provides an online calculator to help determine if your household qualifies based on size and income. Overall the plan aims to cover families who otherwise lack employer dental benefits. [1]
Integration with Existing Benefits
The new Canadian Dental Care Plan will integrate and coordinate with existing employer-provided dental benefits. Employers who already offer dental coverage to employees will be able to maintain their current plans and use the national plan as a top-up for additional services.
The national plan acts as the first payer for basic services like exams, cleanings, fillings, and extractions. The employer's private plan would then cover additional services beyond the scope of the national plan, such as orthodontics, crowns, bridges, etc. There is no double-dipping - costs won't be reimbursed twice under both plans.
For example, if an employee gets a filling done that costs $200, the national plan would reimburse the first $150 of the cost. The remaining $50 balance could then be submitted to the employer's private plan. This way, the two plans work together to provide more complete coverage.
Employers will need to educate employees on when to use the national plan vs. the workplace plan. HR teams can refer to the official government website for details on which services are covered under each plan.
Overall, the introduction of the national plan allows employers to reduce premiums and scale back the services covered under their own dental benefits plans, since basic services will now be covered publicly. Many employers are expected to realize cost savings as a result.
New Employer Reporting Requirements
Under the new dental care plan, employers face additional reporting requirements to confirm whether they offer dental benefits to employees. This reporting will be done through the T4 and T4A tax information slips.
Specifically, the Canada Revenue Agency has added a new Box 45 titled "Employer-Offered Dental Benefits" to the T4 and T4A slips. Employers must indicate in this box whether or not they provided dental benefits to an employee in the tax year.
According to the CRA: "If you offered qualifying dental benefits to the employee in the year, enter 'X' in this box, otherwise leave it blank."
This reporting allows the government to determine if an individual is eligible for the national dental care plan based on whether they already have coverage through their employer. It streamlines the verification process.
Employers should ensure their payroll teams and HR software are prepared to collect and report this new data element for 2023 T4s and going forward.
Communicating Details to Employees
HR teams play a key role in educating employees on the new Canadian Dental Care Plan. Here are some best practices for effectively communicating plan details:
Send a company-wide email announcing the plan and highlighting key details like eligibility requirements. Include links to official government resources for more information.
Post flyers and posters in common areas to raise awareness. Draw attention to income thresholds and covered services.
Add a page on the company intranet or employee portal explaining the plan integration with existing benefits.
Incorporate messaging into new hire orientation materials. Ensure all employees understand the plan.
Host informal Q&A sessions for employees to ask specific questions. Equip HR reps with talking points.
Provide a handout alongside pay stubs outlining eligibility criteria and enrollment steps.
Follow up with personalized emails to employees that may qualify based on income data.
Track employee questions and concerns, addressing misinformation directly and transparently.
Leverage surveys to gauge employee comprehension of the plan. Refine communications based on feedback.
Emphasize that HR can assist employees in determining if they qualify and enrolling if eligible.
Enrollment Process
Eligible Canadians can enroll for coverage under the Canadian Dental Care Plan starting in 2024. The enrollment process involves submitting an application either online or by mail. Applicants will need to provide some key details:
Social Insurance Number
Date of birth
Full name
Home address
Existing dental coverage (if any)
Applications can be submitted online through the Government of Canada website here: Canadian Dental Care Plan - Apply. The online application is straightforward with eligibility determined automatically based on income tax returns.
For those who prefer to mail an application, forms can be downloaded from the government website and sent in. Processing paper applications takes longer than online.
Once enrolled, participants receive a welcome kit by mail that provides details on using their coverage. An ID card is also mailed that can be presented when booking dental appointments. Coverage takes effect on the first day of the next month after successful enrollment.
Answering Common Employer Questions
The introduction of the Canadian Dental Care Plan raises many questions for employers. Here are answers to some of the most frequently asked questions from business owners and HR professionals:
How does the CDCP impact our existing dental benefits plan?
The CDCP acts as the first payer for basic dental services for eligible employees. Employer plans act as the second payer, covering any remaining costs. Employees cannot double dip and receive coverage for the same services from both plans. Coordination of benefits rules apply.
Do we need to change or lower our coverage limits?
You may be able to reduce coverage limits or scale back your plan design since the CDCP covers many basic services. Consult with your benefits advisor on changes that may align your plan with the CDCP.
What are the new T4 reporting requirements?
You must report the availability of CDCP coverage for each employee using the new Box 45 on T4 slips. This flags who has access to the national public plan.
How do we communicate plan details to employees?
Share a simple overview of the CDCP and have employees visit the government website for full details. Highlight key facts like eligibility criteria and covered services.
What if an employee asks if they are eligible?
Avoid any definitive guidance, since eligibility depends on income which may fluctuate. Direct employees to use the government's online calculator to confirm their status.
How do eligible employees enroll in the CDCP?
Eligible Canadians can enroll online through their CRA account. The enrollment window for 2024 coverage starts in March 2024. Employees simply need their SIN, income details, and banking information.
Key Takeaways for Employers
The new Canadian Dental Care Plan provides an opportunity for employers to enhance their benefits offerings. Here are some key takeaways for employers:
Employers should communicate details of the plan to employees so they understand potential eligibility. Resources such as fact sheets and FAQs can help increase awareness.
For employees who qualify based on income thresholds, the plan provides basic dental coverage at no cost to them. Employers can focus on providing supplementary or enhanced dental benefits.
Administrative tasks like reporting coverage availability in Box 45 of T4 slips are important to comply with the new requirements.
Employers should coordinate with dental benefits providers to integrate the plan with existing coverage based on the coordination of benefits rules.
With more Canadians getting basic dental care, employers may see increased productivity and reduced absenteeism in the workforce.
Overall, the national plan expands access to dental care while allowing employers to optimize their own plans and provide added value.
Next Steps for Employers
With the rollout of the new Canadian Dental Care Plan, there are some key action items for employers:
Review plan details and eligibility criteria to understand how it may impact your employees. Refer to the Government of Canada website for official information.
Update your employee benefits policies and paperwork to integrate the new dental plan. Make sure coverage is coordinated properly.
Educate HR staff and benefits administrators on the new dental plan and how to communicate details to employees.
Inform employees about the plan and eligibility criteria before open enrollment periods.
Assist eligible employees in enrolling and accessing coverage if needed.
Comply with new T4 reporting requirements for the plan by using Box 45.
Consider adjusting your existing dental benefits package based on the new national plan.
Stay up to date on any changes or updates announced for the dental plan.
Being proactive and staying informed will ensure a smooth transition and coordination with the new Canadian Dental Care Plan. Leverage government resources and allow plenty of time for implementation.