The Employer requires accidental death and dismemberment coverage ("Insurance Coverage") for those of its employees traveling to high-risk areas ("Employees"), irrespective whether they have a personal policy that covers their death or disability while working in such an area. Without the Insurance Coverage, the Employees would refuse to work in those areas. Is the Insurance Coverage a taxable benefit?
After stating that s. 6(1)(e.1) “applies to premiums or contributions paid by an employer to a group sickness or accident insurance plan unless it relates to an income insurance benefit payable on a periodic basis (a non-lump sum),” CRA stated:
[A] plan by virtue of which a number of employees (two or more) are insured under a policy between the insurer and an employer is a group insurance plan.
… [T]he term "group … insurance plan”… includes, in particular, accidental death and dismemberment insurance plans. Therefore, if the Insurance Coverage is a group insurance plan, we are of the view that the total amounts paid by the Employer in respect of an employee during a year of Insurance Coverage is to be included in computing the employee's income from an office or employment under paragraph 6(1)(e.1).
… [T]hat the Insurance Coverage primarily benefits the Employer … is not relevant for the purposes of paragraph 6(1)(e.1).