Principal Issues: General question about private health services plans
Position: General comments provided.
Reasons: The law.
October 30, 2012
XXXXXXXXXX
Dear XXXXXXXXXX:
The office of the Honourable James M. Flaherty, Minister of Finance, forwarded me a copy of your correspondence about the income tax treatment of amounts paid for long-term care (LTC) insurance premiums. I apologize for the delay in replying.
Amounts paid for coverage under an LTC plan may qualify as medical expenses under the Income Tax Act if they were paid as a premium, contribution, or other type of payment to a private health services plan, as defined in the Act.
You can find information about private health services plans in Interpretation Bulletin IT-339R2, Meaning of private health services plan [1988 and subsequent taxation years], which is available on the Canada Revenue Agency (CRA) Web site at www.cra.gc.ca/E/pub/tp/it3339r2.
The bulletin explains that a plan will be considered a private health services plan only if it limits coverage to hospital care, hospital expenses, medical care, or medical expenses that normally qualify as medical expenses under the Act. Therefore, if a plan includes benefits in addition to medical expense payments, it would not meet the definition of a private health services plan.
You can find more information on eligible medical expenses in Interpretation Bulletin IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, at www.cra.gc.ca/E/pub/tp/it519r2-consolid.
I trust that the information I have provided is helpful.
Yours sincerely,
Gail Shea, P.C., M.P.
c.c.: XXXXXXXXXX
Gwen Moore
957-2141
2012-045190