In two months, Manitoba Association will be upgrading the group benefits plan offered to the employees by introducing an Accidental Death and Dismemberment coverage and vision care coverage. The purpose of the enhancement is to create a broader choice of benefits for the employees. It will also ensure the payment of beneficiaries in case of an employee's death due to an accident. The employees will undergo routine eye check-ups which will include eye exams and contact lens fitting. It will ensure eye-related problems are detected at their early stages, thus reducing future medical treatment costs. The organization plans to incorporate a cost-sharing strategy where both parties; the organization and the employees, will pay 50 percent of the value of each premium.
Being the payroll supervisor, I have been mandated by the finance manager, Cheryl Hunt, to explain how the new benefits will impact employee net pay. The Accidental Death and Dismemberment coverage will be considered a taxable benefit. It is as a result of the employer's involvement in the payment of the premiums. Any payments received by the employees in case they make a claim will be treated as taxable income. The net pay will, therefore, decrease due to an increase in the taxes. The 50 percent contribution of the employees will be deducted from their pay statement. It means that their pay will reduce by the same amount of the paid portion.
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On the other hand, the vision care coverage will not be considered a taxable benefit despite the employee involvement in the payment of the premiums. It is an extension of the health care coverage, and therefore employers' contributions are tax-free. However, the employees' contributions will be deducted from their pay statement.
In conclusion, the organization urges employees to embrace the enhancement of the group benefits plan. The benefits are meant to improve the lives of the employees and their families.
