Part 3: Contribution Deductions, Insurance Coverage Amounts and Remittances

Summary

If you are an Employer that participates in the MEBP Group Insurance Plan, contributions to the Insurance Plan(s) are based on Amount of Coverage elected by the Member on their completed Blue Cross/MEBP Individual Application for Group Insurance Plan (MBCapp) form or Blue Cross/MEBP Change Form (MBChange).

Basic Life Coverage Amount

1 or 2 times the Member's annual pensionable employment earnings which is then rounded to the nearest thousand. Refer to The MEBP Pensionable Earnings List in Part 6 – Additional Employer Information section of this manual to verify what qualifies as pensionable employment earnings.

Maximum Amount of Coverage:

2 x annual pensionable employment earnings, which is then rounded to the nearest $1,000*, or 1 x annual pensionable employment earnings, which is then rounded to the nearest $1,000*.

*(death benefit will not exceed $700,000).

Minimum Coverage

$16,000 (if coverage is 2x),
or $8,000 (if coverage is 1x)

Example for determining the Basic Life Insurance Coverage Amount
STEP 1 Determine the Member’s annual pensionable earnings:

Full Time Member:

The annual pensionable earnings are equal to the Member’s annualized rate of pay. The amount of coverage for current employees is set up in the first pay-period of January based on the pensionable earnings reported on the prior year’s YEAR END REPORT (Form #15).

If the amount stated on the Year End Report does not represent a full year of pensionable service, then you must first annualize the earnings.

Example: To annualize the earnings reported on the Year End Report, if corresponding pensionable service was not 1.000, then take the pensionable earnings reported multiplied by pensionable service reported (ie: actual pensionable earnings $47,500 divided by actual pensionable service 0.9273 = annualized earnings of $51,223.98.)

If the Member joined the Plan after the beginning of the year and is expected to be employed on a full-time basis, you would annualize their earnings and base the Basic Life Coverage Amount on those annualized earnings.

Example: The new Member’s rate of pay is $1,500 bi-weekly, the annual pensionable earnings are $39,000 ($1,500 x 26 bi-weekly pay periods)

Part-time, Seasonal or Temporary Member:

The annual earnings, for insurance purposes, are equal to the amount of pensionable employment earnings for the previous year. Example: If a Part-Time Member’s 2022 pensionable earnings were $18,500, the annual earnings for 2023 Basic Life Coverage determination purposes are $18,500.

Estimate the amount of annual pensionable earnings when:
a Part-time, Seasonal or Temporary member has joined the Pension Plan on a Voluntarily basis and does not have prior earnings, or
a Part-time, Seasonal or Temporary member commenced employment after the beginning of the year or season and is expected to be employed for a full season this year.

Example: A seasonal employee was hired in July 2022 at a rate of $15.00 per hour. The employee was laid off in November 2022 after working a total of 960 hours and receiving $10,080 “pensionable” employment earnings. The employee voluntarily joins the Program after returning from layoff in May 2023.

The employee's annual pensionable earnings, for Basic Life Coverage purposes, would be $14,400 ($15.00 x 960)

A subsequent change in rate of pay during the current year does not affect the current amount of insurance coverage.

STEP 2 Determine amount of Coverage:

Member Elected Two Times (2x) Coverage: Multiple the Member’s annual pensionable earnings (Step 1) by 2, rounded* to the nearest thousand. Example: Annual pensionable earnings are $42,750.00 multiplied by 2 = $85,500 rounded to the nearest thousand is $86,000.00*.

Member Elected One Times (1x) Coverage:

The amount of insurance is equal the Member’s annual pensionable earnings determined under Step 1, rounded* to the nearest thousand. Example: Annual pensionable earnings are $40,499.00 rounded to the nearest thousand is $40,000.00*

*rounding: Hundreds from 0 to 499 are rounded to the lower thousand, hundreds from 500 to 999 are rounded to the higher thousand.

Basic Life Contributions

The total required contribution for Basic Life Insurance coverage is:

Effective the 1st pay period of 2023: $0.19 per $1,000 of insurance per month

For Member’s whose entry date into the Group Insurance Plan is the first day of the pay period, a full deduction is required to provide coverage for the current period.

Example: Entry is December 29,
Bi-weekly pay period Dec. 29 - Jan. 9, Insurance coverage $20,000
Member pays 2/3 (66.67%) of the contribution

Coverage is $20,000. Therefore, total monthly contribution would be $20,000/1,000 x $0.19 = $3.80. The annual contribution is $45.60 ($3.80 x 12 months). This Member is paid bi-weekly (26 pay periods this year).

The Total Basic Life Insurance Contribution to be deduction each pay period is:

$45.60/26 pay periods = $1.76
Member Portion: $1.76 x 33.33% = $0.59
Employer Portion: $1.76 x 66.67% = $1.17

For Member’s whose entry date into the Plan is not the first day of the pay period, a pro-rated deduction is required to provide coverage for the current period.

Example: Entry date Jan. 7,
Bi-weekly pay period Dec. 29 - Jan. 9, Insurance coverage $20,000
Member pays 2/3 (66.67%) of the contribution

Coverage is $20,000. Therefore, total monthly contribution would be $20,000/1,000 x $0.19 = $3.80. The annual contribution is $45.60 ($3.80x 12 months). This Member is paid bi-weekly (26 pay periods this year).

The Total Basic Life Insurance Contribution to be deduction each full pay period is:

$45.60/26 pay periods = $1.76 (there are 10 working days each bi-weekly period year)
Member Portion: $1.76 x 33.33% = $0.59
Employer Portion: $1.76 x 66.67% = $1.17

This Member must pay for the period of Jan. 7 – 9 (3 days)

For the first partial pay period:
Member Portion: $1.76 x 33.33% = $0.59 x 10 / 3 = $0.18
Employer Portion: $1.76 x 66.67% = $1.17 x 10 / 3 = $0.36

NOTE: The Employer is responsible for no less than 1/3 of the insurance contribution unless special cost sharing arrangements have been made involving the Disability Income Plan.

For a quick reference of monthly contribution deduction required, refer to the MEBP Basic Insurance Deduction Table (Eff January 2023) – Monthly in Part 7 – Annual Year End and click on "Additional Employer Information" section of this Manual.

Basic Life Deduction Calculator   

Basic Life Taxable Benefit

Employer contributions and the Employer paid portion of the Retail Sales Tax (RST), paid on behalf of Members towards the cost of their Basic Life Insurance and Basic Accidental Death & Dismemberment coverage, are considered to be a taxable benefit under the Income Tax Act.

The taxable benefit on the contributions and RST paid by the Employer are to be included with Employment Income and reported in Box 14 on the Statement of Remuneration Paid. Also, under Other Information on the T4, add Box 40 and report the total contributions and RST in the Amount box.

From January 1st to December 31, 2024, of the $0.19 cents per $1,000 of coverage per month collected for Basic Life Insurance, the full $0.19 is taxable (the $0.19 cost includes coverage under Basic Accidental Death & Dismemberment Insurance).

The following is an example based on a Member who worked full time and had Basic Life Insurance coverage of $50,000. 

Basic Accidental Death and Dismemberment Insurance

A Member with Basic Life Insurance Coverage is automatically insured for Accidental Death and Dismemberment insurance in an amount equal to the Basic Life Insurance coverage amount on the Member’s file. The cost is included in the Basic Life Contributions. No extra deduction is required.

Optional Life Insurance

A Member with 2x Basic Life insurance may apply for additional life insurance which the Employer does not subsidize.

Optional Life Coverage Amount

The amount of Optional Life Coverage is set by MEBP once a year, based on information reported on the previous year's YEAR END REPORT - (Form #15). The MEBP Administration Office will inform you of the amount of Optional Life Coverage Amount for Members who have elected Optional Insurance.

Maximum Amount of Coverage:

2x annual pensionable employment earnings, which are then rounded to the nearest $1,000*, or
1x annual pensionable employment earnings, which are then rounded to the nearest $1,000*

*(death benefit will not exceed $300,000).

Minimum Coverage

$16,000 (if coverage is 2x),
or
$8,000 (if coverage is 1x)

Optional Life Contributions

Optional Life coverage must receive approval by the Insurance Carrier. The MEBP Administration Office will inform you and the Member if the Member has been approved for this benefit. You will then be informed by MEBP of the contributions required for Member who have elected Optional Insurance. The MEBP Administration Office will also advise you of any futures changes that may be required to be made to the coverage amount and/or contributions.

The premium rates will change each time a Member reaches a new age category, annual salary increases and/or if their smoking status changed during the past year.

In May of each year, the MEBP Administration Office will inform Employers and Members of any change in contributions and coverage for members with Optional Life coverage, based on information stated on the previous year’s Year End Report.

Coverage and deductions stop once the Member turns 65 year of age.

Family Life Insurance

Family Life Coverage Amount

The amount Family Life coverage is equal to:

$10,000 on the life an eligible spouse, and
$5,000 on the life of each eligible child.
This benefit is payable to the Member on the death of the member’s eligible spouse and/or child(ren).

Family Life Contributions

The cost for Family Life coverage is $2.10 per month per member (effective January 1, 2020), regardless of the number of family members covered. The cost is totally paid for by the member.

Coverage and deductions stop once the member turns 65 year of age.

Voluntary Accidental Death and Dismemberment Insurance

Voluntary Accidental Death and Dismemberment Coverage Amount

The amount of Voluntary Accidental Death and Dismemberment coverage is multiple increments of $25,000, up to a maximum of $250,000.

Voluntary Accidental Death and Dismemberment Contributions

The contributions for Voluntary Accidental Death & Dismemberment Insurance are completely paid by the Member. These are to be deducted and remitted monthly as outlined in the following Table, deductions are effective the date the Application (Form 78) or Change Form is signed by the employee.

Revised Rates to be applied to the first pay issued with a January 2025 payment date.

Manitoba Retail Sales Tax

The RST is applicable to residents of Manitoba only. The tax applies to Basic Life, Family Life, Optional Life and Voluntary Accidental Death & Dismemberment Insurance.

A 7% Retail Sales Tax (RST) is to be applied to all group insurance contributions, deducted from Members, and remitted to MEBP and insurance contributions paid by the employer on behalf of Members.

The following is an example of how the RST is to be applied for a Member that has Basic Life only:

A Member has annual earnings of $33,800 and has 2 units of Basic Life Insurance. Total Basic Life Coverage is $68,000 ($33,800 * 2 = $67,600 rounded to $68,000).

The Member is paid on a bi-weekly basis and there are 26 pay periods in the year.

The required bi-weekly contribution is: (68,000/1,000 x 0.19) x 12 months/26 pay periods = $5.97

The Employer has an agreed to pay 50% of the cost of Basic Life Insurance for their Members:

Member's bi-weekly contribution is $5.97 x 50% = $2.98
Employer's bi-weekly contribution is $5.97 x 50% =$2.99

RST must be remitted on both the Member and Employer shares of the contribution. The total RST of $0.42 must be reported separately on the Monthly Remittance Report (Form #50).