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Federal and provincial governments making Ontarians a fool this year

on Sun, 03/31/2019 - 23:50

April Fools' Day is usually a day of fun by playing practical jokes or spreading hoaxes, but this year’s April Fools' Day is absolutely not fun for Ontarians. Particularly to our finances. 

What is changing on April 1, 2019
Carbon tax
The federal government's $20-per-tonne carbon tax kicks in on April 1 in four provinces, including Manitoba, Saskatchewan, Ontario and New Brunswick. The carbon tax will result in an approximate cost increase of 4.4 cents a liter for gasoline, 3.91 cents per cubic meter for natural gas and 3.10 cents a liter for propane. The federal government claimed that most of the proceeds collects from Ontario through the fuel charge will be returned directly to Ontario’s individuals and families through Climate Action Incentive Payments.

OHP+
As you may know the Ontario government is making a significant change to OHIP+, which was implemented just over a year ago on January 1, 2018, (initially paid 100 per cent of the cost of eligible prescription drugs for all children and youth under age 25). For young people from age 21 to 24 (they got free drug coverage in 2018), The Ford government is rolling that back. Well, if that was all, we would be fine because we simply go back to our initial status quo, but NO. OHIP+ now is not going to cover any kids (21 and younger) if and when they have any private health care benefits!

Effective April 1, 2019, children and youth under age 25 who have drug coverage under private plans or health spending accounts will no longer be eligible for OHIP+ (expect if you have brand name drug cards or in patient support programs). In other words, anyone under age 25's prescription drug coverage will now be primarily under your private benefits plans (whether it is from your workplace or you bought it yourselves), unless you have coverage under the Ontario Drug Benefit program (ODB) administered publicly funded program (including OW, ODSP, Home Care Program, Long-Term Care Program, or Homes for Special Care or Community Homes for Opportunity, with the exception of Trillium Drug Program - refer to below), will continue to receive drug coverage under the alternative program with a $0 co-payment or deductible (regardless of insurance status) - which is another area altogether.

The Ontario government defines a private plan as a drug plan or a health spending account that could provide coverage for a prescription drug claim. If the drug is not covered by your private drug plan, you still won't be eligible to claim the drug under OHIP+, this is unfavorable for anyone with young children if they have any health coverage or a HSA.

Even if you or your eligible dependents were approved for a drug eligible under the Exceptional Access Program (EAP) before the original implementation of OHIP+ on January 1, 2018, the approvals will not be grandfathered, and now will require a Prior Authorization for coverage from your drug plan provider. Your pharmacist will complete the Pharmacy Confirmation Form for OHIP+ Transition of EAP Claims for those who require expediting of the approval process. The pharmacist must complete the first section. The second section can be completed by the patient. 

Families which have significant out-of-pocket costs, despite having private insurance, could still apply for additional financial support through Trillium Drug Program (TDP), which offers additional coverage for eligible prescription drug costs that create a significant financial burden. Once the TDP deductible threshold is met, public drug coverage will be provided with a $2 copayment. If you have any questions about TDP, please contact the Trillium Drug Program at 416-642-3038 (Toronto area) or toll free at 1-800-575-5386.

As financial advisor, we always view "having some coverage is better than having no coverage". This change from the Ontario government obviously had negatively impacted this viewpoint. Children or youth age 24 and under would only qualify for coverage under OHIP+ if their parents opt out of coverage for their dependents. However, there is a list of medication covered by OHIP+. Check here to see if your child’s medication is covered. I can foresee premiums on private health care plans (as well as group plans provide by companies) offering coverage for children and youth will increase due to this change.

For families who have kids as patients at the SickKids Hospital, you can access to The Resource Navigation Service, which is supervised by the Social Work Department at SickKids. The Family Resource Coordinator and resource navigators are available to assist families in finding and utilizing resources available to them. 

There are still be some confusion among patients and families regarding the revised program, insurance companies' communications state that they are actively working with CLHIA and the Ministry of Healthand Long-Term Care to look for solutions to ensure a smooth transition and minimize the impact. Below are the links to Ministry and the updates on the changes on OHIP+, you can also reach out to the Government of Ontario at OHIPplus@ontario.ca.
http://www.health.gov.on.ca/en/pro/programs/drugs/opdp_eo/notices/exec_o...
http://www.health.gov.on.ca/en/pro/programs/drugs/opdp_eo/notices/fq_pat...

Autism Program 
The changes to the autism program means families receive a set amount of funding based on age and income. Families can access up to $20,000 a year per child under the age 6. And up to $5,000 a year per child for autism therapy till age 18.

The changes mean families can receive a lifetime maximum of up to $140,000 for a child in treatment from 2 to 18. But only families with an adjusted annual net family income of under $55,000 are eligible for the maximum annual amounts, with funding determined on a sliding scale up to a $250,000 income.

Court Fees

Proposed court fees will be increasing and fee waiver thresholds are decreasing at the same time on April 1, 2019.

What else are changing in 2019?
Working Income Tax Benefit for low-income is being rebranded as the Canada Workers Benefit. The federal government stated that the new benefit will be enhanced, with most recipients receiving a 26 per cent top-up of their earned income over $3,000 instead of the current 25 per cent.

The federal small business tax rate will fall again from 10 per cent to 9 per cent.

Small businesses reporting $50,000 or more in passive income (money coming into a corporation from investments, dividends and other activities not directly related to its core business) will start to lose access to the small business tax rate for their active income. When the business earns $150,000 of passive income, the small business deduction would be gone entirely.

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