New CRA Guidance on Private Health Plans (PHSPs)

On July 24, 2015, CRA released a new Income Tax Folio S2-F1-C1 entitled Health and Welfare Trusts. This folio replaces and cancels IT Bulletin IT-85R2, Health and Welfare Trusts for Employees. This information relates to Health and Welfare Trusts, which are used less often amongst private employers than many realize. Health and Welfare Trusts are used when funding for various benefits is done in advance and in a trusteed environment. Most private employers will simply fund benefit plan costs as they are incurred.