When approaching or working with a First Nations community, there are a number of benefit plan considerations you should keep in mind to ensure the unique needs of First Nations plan members are being met.
A First Nations person in Canada who is registered under the Indian Act is eligible for coverage through Non-Insured Health Benefits (NIHB), or the First Nations Health Authority (FNHA) which replaced the NIHB program for First Nations in British Columbia. The NIHB/FNHA program is a government program that covers certain medical and dental items to First Nation Peoples living in Canada.
Although Non-Insured Health Benefits do cover certain health and dental services, the program does not cover all the items that are covered by a traditional group insurance plan. This results in one of three scenarios:
- The member is either forced to pay out-of-pocket for the expense
- The member goes without the medication, practitioner visit or dental procedure
- The member purchases a health insurance plan that duplicates items already eligible through NIHB
Designing a plan that coordinates with NIHB alleviates the problems listed above. There are several plan design features to consider when setting up a group benefits program with Status participants.
Disability coverage
Assuming that the employee is paying 100 per cent of the disability premiums, disability benefits are structured so that Status and Non-Status employees do not pay tax on their income when they are disabled.
Although there are a number of factors to take into consideration, a Status individual’s employment income may be eligible for tax exemption under the section 87 of the Indian Act. As Status employees earning income on reserve do not pay tax on their pre-disability income, we recommend structuring the disability plan to ensure the Status disability claimant is receiving a fair pre-disability income percentage.
Pension plan
Whether it be a Life Income Fund (LIF), Restricted LIF, or annuity product, income that is earned on reserve for eligible Status participants under section 87 of the Indian Act should remain tax exempt. Improper setup of the retirement account can have an impact on eligibility for other government benefits that the individual is entitled to receive at retirement.
Access to Traditional Healers and Elders
Whether a member is grieving the loss of a loved one or dealing with a problem at home, they may prefer to see a Traditional Healer or Elder in the community instead of a typically-covered social worker, counsellor or psychologist.
Remuneration of Chief and Council
Chief and Council are highly respected elected officials in the community. There are many instances where their remuneration is in form of an honorarium, which can cause a red flag with most insurance companies as it does not meet the definition of earned salary in the contract. For this reason, a solution is necessary to offer benefits to Chief and Council earning honoraria to ensure elected officials are properly insured.
Custom adoption
A custom adoption takes place between immediate or extended family members such as grandparents, aunts and uncles, or a close family friend. As the arrangement is not a legal adoption, most insurers will not allow the child to be added to the program as a dependent.
Addressing these unique needs
A well-designed and cost-effective group insurance plan will ensure proper claim coordination with NIHB for First Nations communities and organizations. As our industry evolves, more than ever it is extremely important to have a strong knowledge of government benefits with NIHB, a thorough understanding taxability issues, and innovative product solutions – such as Life Benefit Solutions’ program – to meet the needs of First Nation Peoples.
Written by Janelle Aubin, Benefits Consultant at Life Benefit Solutions Inc., a People Corporation company.
