We have reached a settlement on the outstanding Health Spending Account (HSA) Policy Grievance.
This settlement will change how an auxiliary employee's "in lieu" health dollars are utilized, effective the first pay received in October this year (Oct 1, 2016). Part of the settlement includes an important form to be completed to provide a choice of the options available. Therefore, if this applies to you, please read over the details carefully.
You may recall in the last round of bargaining that was concluded in 2012, a provision known as the Health Spending Accounts (HSA) was negotiated as part of the new agreement. Unfortunately, subsequent to bargaining it was determined that the provisions negotiated as part of this were offside with the Canada Revenue Agency (CRA) rules and thus were not legal. Specifically, the provision that allowed for unused HSA money to be returned to the workers was deemed illegal by the CRA.
As a result, your employer has been administering the HSA in accordance with CRA rules which includes that the HSA funds have to be used within the time period required or they are lost to the carrier who administers the program. Those CRA rules allow you to carry over HSA funds into the next calendar year before they are lost if not used. For example, all your HSA dollars earned and not used in 2016 can be carried over to 2017 and then if not used by December 31, 2017 they would be lost. Similarly, HSA credits earned in 2017 would have to be used by the end of 2018.
When your employer started administering the HSA in the fashion noted above, the union responded by filing a policy grievance (as we did with various employers in the sector) as this move by the employer clearly violated the collective agreement. Our intention in bargaining was for unused HSA credits to be returned to the employee after the 2nd year. It was also in violation of the whole intent of the HSA which was to provide a vehicle to protect the "in lieu" dollars from being subject to income tax.
This settlement agreement resolves the policy grievance filed in your area and once again gives options to members that would allow the "in lieu" dollars to be accessed without paying income tax (while remaining compliant with CRA). Attached is a copy of the full settlement agreement with the employer.
The settlement agreement, which replaces Appendix 7 in your collective agreement, creates a "flex plan" that allows employees the option, every year, to put their "in lieu" dollars into either a Group RRSP (or BCGEU Pension Plan if you are part of that pension plan) or an HSA or combination thereof. While CRA rules require you to make that selection prior to the year it applies, you can change your selection from year to year. For example, you could choose to put 20% into the RRSP and 80% into the HSA and then the next year reverse those percentages if you wish. You can choose to put all the money into an HSA or an RRSP. The employer has developed a form for this purpose and is attached with the settlement agreement. It is important for you to know that you will need to complete this form prior to the October start date and the employer will be providing the form to employees to complete in August this year. If you do not fill out the form, all your “in lieu” dollars will automatically revert to 100% HSA. You will then have to fill out the form again prior to November 15, 2016 for the 2017 calendar year; otherwise, it will revert to the selection you made on the previous form. This will be the case each year thereafter.
The HSA option is something many of our members in other areas have found to be advantageous when they have medical expenses that they can submit for reimbursement through their HSA account, and thus not have to use 'after tax' dollars for these expenses. The different medical expenses that you can claim for an HSA includes those for you, your spouse and dependants and is a fairly comprehensive list. A partial list of those are contained in the settlement agreement. Those that don't believe they will have sufficient medical expenses to claim for the HSA, may decide to put part or all of the money into the Group RRSP (or BCGEU Pension Plan if applicable). The Group RRSP that is in the settlement agreement is the same Group RRSP that some of the members contribute to now. We have confirmed in our agreement with the employer that HSA dollars put into the Group RRSP will be considered “voluntary contributions” and not locked in; in other words they can be withdrawn at any time (subject to income tax). If you are not part of the Group RRSP presently, you will have to register. It is a simple process and the employer will provide you with the required form. If you are already a contributor to the BCGEU Pension Plan, you can choose to allocate the RRSP money to that plan. However, as the BCGEU Pension Plan is changing to a Target Benefit Plan, effective July 1, 2016, any funds allocated to that Pension Plan cannot be withdrawn unless the member retires or quits their employment (this is a legal provision due to how that pension plan is structured).
While we will schedule the meetings in the fall to discuss this further, if you have any questions on this, please contact your bargaining unit chairperson, Fred Street.
Fred Street, Bargaining Unit Chairperson
Dave Maki, Component 10 Provincial Bargaining Council Chairperson
Rory Smith, Vice President Operational Services Component (Component 10)
Frank N. Anderson, BCGEU Regional Coordinator
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