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Re: Increase in Provincial Insurance Premium Tax

June 2, 2016
During its recent budget announcement, the Provincial Government introduced and/or increased fees and taxes on several items and/or services provided throughout the Province. Embedded in their extensive list of items to be taxed was an announcement to increase the Provincial Insurance Premium Tax that is required to be paid on all group insurance policies from 4% to 5%, effective July 1st, 2016. This increase in taxation will have a major impact on the overall costs associated with the current NLTA Group Insurance Program to the tune of approximately $480,000 annually. However, since this increase will become effective on July 1, 2016 and given that the group insurance year extends from May 1, 2016 to April 31, 2017, the cost to the NLTA Program for the remainder of this insurance year will be approximately $400,000.

At the time of the Annual Group Insurance Renewal meeting in February 2016, Trustees were not aware of this increase in taxes. Thus, all premium rates paid by teachers must now be further adjusted to reflect this additional 1% increase in taxes in order for our program to avoid having a huge deficit at the end of April 2017.

At the NLTA Group Insurance Trustee meeting held on Saturday, May 28, 2016, Trustees approved a motion to increase all premiums collected from teachers by the applicable increase. The previous rates that were implemented as of April 2016 will be readjusted and the new rates will be provided to Teacher Payroll and Pension Payroll for implementation for the July 7th pay period for active teachers and the July 15th pay period for retired teachers.

If you have any questions, please contact AN administrative officer in Programs and Services.

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