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OPIP - Tax Considerations

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The Tax Consideration with OPIP

The OMA Priority Insurance Program (OPIP) ensures that Ontario physicians have access to benefits. OPIP includes the Physicians Health Benefit Program (PHBP), Legal Expense Insurance (LEI), Security Evacuation Coverage (SEC), and optional self-funded coverages (OSF).

Each year you pay an annual contribution for OPIP coverage. However, the Ontario government subsidizes the core costs of the PHBP plan and this subsidization may be considered income to be reported for tax purposes.

Every March you or your professional corporation will receive a premium summary statement outlining the coverage provided under OPIP and the actual plan costs. This statement can be used as a reference when assessing your income tax obligations.

While we advise you to consult with your tax and/or legal advisors to discuss the specifics of your individual circumstances, we would like to provide you with some general information.

Why does the statement show an insurance premium of $50 when I paid $200 in 2017?

$50 (includes any applicable provincial sales tax) of your annual OPIP payment is collected at the direction of OPSI and is your portion of the PHBP premium.

The balance of your PHBP premium and applicable provincial sales taxes are paid by MOHLTC/OPSI, through the government subsidy agreement. This amount could be considered a taxable benefit by CRA, and may need to be reported as income for tax purposes on your income tax return. This portion is not funded by your annual OPIP payment.

$150 (includes 13% HST), the remainder of your annual OPIP payment, is collected by OMA Insurance. OMA Insurance uses these funds to fund Legal Expense insurance, Security Evacuation coverage and to build the OPIP Reserve. Do not include this amount in the calculation of taxable benefits.

Under the supervision of the OMA Board Insurance Committee, the OPIP Reserve was established recognizing that future costs of PHBP would rise, (for many reasons including increased member participation, increased claims, inflation, higher cost of drugs, etc.), to the point when those costs would exceed the government-funding cap. The OPIP Reserve funds will then be applied toward the anticipated shortfall to mitigate any impact on coverage or cost.

Can I deduct the $150 difference as an expense for tax purposes?

OMA Insurance does not have tax advisors on staff and we are unable to provide tax advice to you about your specific situation. We strongly encourage you to consult with your qualified tax advisor about whether some or all of this expense may qualify as a deduction on your income tax return.

Are my Health Spending Account expenses considered taxable benefits?

The total cost of your Health Spending Account (HSA) includes claims paid plus administrative charges and taxes, and are considered a taxable benefit and may be considered income for tax purposes. For the most up-to-date information on whether this is a taxable benefit for you in your personal tax situation, we strongly recommend that you contact your tax advisor or the Canada Revenue Agency.

How will I know the amount of funding that may have to be reported for income tax purposes for myself and/or my professional corporation?

Your annual premium summary will confirm the premium (total cost) paid by Ontario Ministry of Health and Long-Term Care through Ontario Physician Services Inc., (MOHLTC/OPSI) on your or your professional corporation's behalf:

  • Health Spending Account (HSA) - $350 or $500 credits
    The cost of this option equals the dollar value of the claims you make during the year plus applicable taxes and administrative charges. Assuming you claim the full amount available in your HSA during the first year, the total cost will be as follows:
    • $350 HSA credits will be $407.50
    • $500 HSA credits will be $582.36
  • Health
    The cost of the Health plan depends on your age, coverage selected and that year’s actual claims experience.
  • Critical Illness insurance
    The cost of the Critical Illness insurance plan depends on your age, gender, smoking status and that year’s actual claims experience.

Will I be able to deduct premium for OPIP as a business expense?

In some circumstances, you may be able to claim the total premiums paid by both MOHLTC/OPSI and you or your professional corporation as reported in your premium summary as a business expense.

In determining whether the premiums for these plans qualify as a deductible business expense, you and your tax advisor may wish to review the Income Tax Act (Canada), including section 20.01, for guidance. In particular, this section may be helpful to you and your tax advisor in determining whether you meet the criteria for a deduction and the amounts that may be eligible for deduction. The PHBP benefit is only offered to eligible physicians and not to the physician's employees. This may affect the amount of the deduction.

Will I be able to deduct premium for OPIP as a personal expense?

The portion of the premium paid for the Health Spending Account or the Extended Health Care benefit may qualify as a medical expense and may be used to calculate federal and provincial non-refundable tax credits, as outlined in legislation. The premium amount may be eligible for the medical expense tax credit calculations to the extent that it has not been previously deducted under section 20.01 of the Income Tax Act (Canada) as a business expense.

For the most up to date information, please contact your tax advisor and/or visit

You or your tax advisor may want to review section 118.2 of the Income Tax Act (Canada), to determine whether the Extended Health Care or Health Spending Account premiums are deductible as personal medical expenses. Please note that Critical Illness insurance premiums do not meet the definition of a medical expense under this section.

When a professional corporation purchases benefits for its employees, what are the tax implications for both parties?

  1. Health Spending Account and Extended Health Care: In general, Extended Health Care and Health Spending Account plans offered under a group contract are considered to meet the definition of a private health services plan under the Income Tax Act (Canada). If the premiums are paid on behalf of an employer's employees, in their capacity as employees, the employer can deduct the premiums as an eligible expense and there should be no taxable benefit to the employees (outside of Quebec).
  2. Critical Illness: Based on current tax laws released by the Canada Revenue Agency, it is believed that any cash benefit from a Group Critical Illness insurance plan will not presently be taxed when the premiums are paid for by the plan member and the benefit is payable to the plan member. Based on this understanding, Group Critical Illness insurance premiums paid by a corporation may be tax-deductible to them. Furthermore, any benefit pay-out may be received by the corporation as taxable. For the most up-to-date information, please contact your accounting professional or the Canadian Revenue Agency.

Are there any other considerations with respect to the expense deductibility for professional corporations?

In determining whether the premiums for these plans may qualify as a deductible expense by a professional corporation, the professional corporation (and/or its tax advisor) will want to review the Income Tax Act (Canada) for guidance on the question of whether payment of the premiums is a shareholder versus an employee benefit. Generally speaking, benefits conferred on a person in his or her capacity as a shareholder are not tax deductible by the corporation and may be included in the income of the shareholder.

OMA Insurance does not provide individual tax advice and all statements in this document are, to the best of our knowledge, true for many circumstances. We strongly advise you to consult with your tax and/or legal advisors to discuss the specifics of your individual circumstances.

Sample Premium Summary Statement

Dear Dr. _____
OMA reference number:

OMA Priority Insurance Program (OPIP)
2017 Premium Summary Statement

Your 2017 Premium Summary shows the premium paid for your OPIP insurance option by you or your corporation, and the amount paid by the Ontario Ministry of Health and Long-Term Care through Ontario Physician Services Inc. (OPSI). The decision to report this funding as income for tax purposes will rest with you and your tax advisor taking into account your own circumstances.

Paid by Ontario Ministry of Health and Long-Term Care through Ontario Physician Services Inc.
Premium paid by *Member or Corporation Total Premiums
Benefit Premium
Sales Tax
Sales Tax

Critical Illness
Extended Health Care
Health Spending Account

Total 2017 insurance premiums paid by MOHLTC/OPSI $333.59
Total 2017 OPIP payment from member or corporation $200.00
Payment comprised of:
Insurance premium paid by member or corporation $50.00
OPIP Reserve Fund contribution $150.00