B.C. MSP and EHT - All you Need to Know

British Columbia (B.C.) Medical Service Plan (MSP) premiums have been eliminated as of January 1, 2020, and replaced it with B.C. Employer Health Tax (EHT). See the changes and the possible implications.

B.C. MSP is a health insurance plan that pays for medically required services.

All residents of B.C. must enroll themselves and their dependents into the MSP program. There are premiums for the MSP coverage, and it is based on family size and income. To see if you are eligible for MSP please view eligibility and enrollment page of MSP website.

Those with low income, or facing temporary financial hardship, may be eligible for MSP premium assistance to reduce or eliminate your monthly MSP premiums for a certain period. For more information please view the MSP Premium Assistance page of the MSP website.

You may also qualify for the Medical Services Only (MSO) program if you are age 65+, you stopped receiving B.C. income assistance or disability assistance, and now receive federal income support. Learn more about MSO.

As of January 1, 2020, B.C. has eliminated the MSP premiums, but enrollment into the MSP remains mandatory and have instead moved towards a health tax like the other provinces. As a result, all should be receiving their last bill in January. If you have outstanding payments, you will still be making payments until all the premiums outstanding are paid.

Currently $422 million dollars is outstanding, and the province is asking CRA help to collect the debt. The ministry will continue contacting individuals owing to work out secure payment plans, but ultimately, if unsuccessful, they will pass the MSP collections to CRA. The elimination also leads to about $50 million in savings annually but the burden is shifted towards employers and voices concerns over; the cost of administering B.C. Employer Health Tax (EHT), businesses’ operational costs and their bottom line, and what it means for taxpayers in the future.

Business with payrolls of more than $1.5 million pay a tax rate of 1.95% of their total payroll, between $500,000 and $1.5 million will pay a reduced tax amount (2.925% x (payroll - $500,000)), and those below $500,000 will not pay the tax. Non-profits and charities will also pay EHT only if their payroll exceeds $1.5 million. To pay EHT you must register for EHT. Please visit B.C. EHT to learn more.

The structure of MSP accounts remains the same and it is up to the residents to maintain their account information with Health Insurance British Columbia (HIBC). If an individual is covered under a group plan and the group plan is ceased, the individual will be placed automatically into a self-administered coverage and HIBC will notify the individual when self-administered coverage is established.

With the elimination of MSP premiums for British Columbians, international students’ premiums have been increased. Under the old system, international students were required to pay premiums of $37.50 per month as part of their health-care coverage and as of January 1, 2020, all international students (K-12 and post-secondary students) will begin paying an increased monthly health-care coverage fee of $75.00. This is an effort to maintain the same level of commitment for international students. In 1992, B.C. decided that all international students attending schools and post-secondary institutions in the province would receive provincial health coverage and contribute to support the benefit.

Even with the one-year adjustment period in 2019, B.C. will just have to see what awaits them for 2020 and subsequently for the results.

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