We recognize that sometimes when a blended benefit plan starts, the annual renewal date doesn't align with the company's fiscal year end and that can make for some funky accounting challenges for the company.
So does that mean we can change your company's benefit plan renewal date(s)?
The short answer: probably not! Harsh eh?!
Just kidding, the real answer: maybe
The answer really depends on a few variables:
1. Features included on the blended benefit plan
Features included in the Plan may have varying renewal dates depending on the effective date of the benefit. We can work with you to help align them if necessary.
Health Spending Accounts
With any Health Spending Account (HSA) feature, a change in the renewal date will necessarily change the length of the benefit period. For an HSA, the benefit period represents the period in which medical expenses are eligible for reimbursement. See more on how dates affect claims in this article.
If a change is made to the renewal of an HSA feature, benefit periods will necessarily be affected. The first will be shortened to accommodate a new renewal date so should be carefully considered.
If the plan includes an HSA Classic feature, we'll have some additional CRA guidelines to consider.
In order for funds contributed from a plan sponsor company to Member HSAs to be considered tax free, the Plan must act in the nature of insurance, meaning there has to be a risk of loss.
If the business owner or any non-arm's length Members is perceived to benefit from a change in renewal simply to add new funds to their own account sooner to cover an expense, CRA may view that negatively because the risk-of-loss attribute is potentially eliminated. In this scenario, we might have to use the aforementioned "probably not" response from up there ↑
Peace of Mind
Peace of Mind renewal dates are dictated by the company's contract with our insurance partner. We can work with them on your behalf to adjust the renewal date. We'll consult with you to ensure you aren't losing an advantage such as guaranteed rates beyond a year.
Enhanced Health Blends
The beauty of Enhanced Health Blends (EHB) features is that the plan sponsor company decides on what changes and when. You're in control. No renewal considerations.
Renewals are often triggered by a change in billing. Our pre-negotiated rates on Group Travel, Excess Medical, Medical Second Opinion, and the Employee and Family Assistance Program benefits rarely change but if they do, they will trigger a renewal change.
2. Timing of the request
Generally-speaking, renewal dates should only be adjusted in the first year. If your company has some extenuating circumstances - consult with us.
3. The purpose
The default renewal date on most benefit features is 12 months from the effective date of the Plan, or what we like to call the Welcome date. Maybe we welcomed you in February, but your year end is December 31. It might be handy to sync changes to your benefits and the related billing with that year end. That would likely be viewed positively by CRA.
There may be other reasons we haven't thought of and we're all ears!
The purpose is important to help establish reasonable grounds that will help avoid negative tax implications.
In the first Benefit Period, we can be our good-ol' flexible selves within the limits imposed on us and work with you to choose your own renewal date. As long as you let us know within the first year of the Plan, we're happy to consult with you and help!
Throwing out the standard disclaimer now...keep in mind, we aren't tax experts and we don't have the full financial picture of your company so we recommend you also consult with your tax professional on how changes might impact your company.