SUBJECT: Changes to the rules and directives for the Public Service Health Care Plan (PSHCP), the Dental Care Plan (DCP), the Disability Insurance Plan (DI Plan), and the Public Service Management Insurance Plan (PSMIP).

The purpose of this notice is to outline a number of changes to the rules and directives for the above-named group benefit plans. The changes apply to all plans unless otherwise indicated.

Firstly, as you have already been notified, the 1995 Budget announced two additional types of leave (leave with income averaging and pre-retirement transition leave) and referred to the coverage and contributions for employees placed on unpaid surplus status.

Secondly, effective December 1, 1996, certain leave without pay references have been standardized under the benefit plans.

CHANGES RESULTING FROM THE FEBRUARY 1995 BUDGET

The addition of leave with income averaging and pre-retirement transition leave provisions.

The leave portion of the leave with income averaging arrangement and the leave portions of the pre-retirement transition leave arrangement are periods of leave without pay for which the employee will be required to pay only the employee's share of contributions/premiums. The employer will pay its share.

With respect to the PSHCP, the DCP and the PSMIP, eligible employees would enjoy employer-paid coverage as applicable under the plans.

Effective July 15, 1995, the extension of coverage during periods of unpaid surplus status to members of the DCP and certain members of the PSHCP and the PSMIP.

The full cost of coverage under the DCP for the period of unpaid surplus status will be paid by the employer.

Employees may continue their coverage under the Public Service Health Care Plan provided they pay the employee's share of contributions, if required, by remitting the required contributions to the Administrator in the same manner as would be applicable for a period of leave without pay. The employer's share will continue.

Employees can retain their life insurance coverage under the PSMIP (including Basic Life, Supplementary Life, Accidental Death and Dismemberment, or Dependants' Insurance) at their own expense, by remitting the employee's share of required premiums to the Insurer in the same manner as would be applicable for a period of leave without pay. The premium for coverage is set as if they were receiving their normal former wage.

EFFECTIVE DECEMBER 1, 1996, THE STANDARDIZATION OF THE WORDING AND COST-SHARING OF THE FOLLOWING LEAVE WITHOUT PAY PROVISIONS

Please note that the cost-sharing arrangements for the first three consecutive calendar months of leave without pay, leave to serve with another organization and birth and adoption-related leave, outlined below are already in place for the PSHCP. However, the wording of the PSHCP provisions has been changed, in order to standardize the wording of the leave without pay provisions among the benefit plans.

The first three consecutive calendar months of leave without pay.

Employees are required to pay only the employee's share of contributions/premiums in respect of the first three consecutive calendar months of any type of leave without pay. The employer will pay the employer's share.

With respect to the DCP, employees will continue to enjoy employer-paid coverage during this period.

Leave to serve with another organization.

Employees are required to pay only the employee's share of contributions/premiums with respect to leave for the purpose of serving with another organization (other than a PS bargaining agent or credit union) recognized as being to the advantage of the department or at the request of the Government of Canada. The employer will pay the employer's share.

With respect to the DCP, employees will continue to enjoy employer-paid coverage during such leave.

For insurance purposes, leave to serve with another organization as described above includes leave to serve with an international organization. Where there is currently a reference to international organization, that reference will be removed.

Birth and adoption-related leave.

Employees are required to pay only the employee's share of contributions/premiums in respect of leave related to the birth or adoption of a child which occurs within the 52 week period following the birth or adoption. The employer will pay its share.

With respect to the DCP, employees will continue to enjoy employer-paid coverage during such leave.

The recovery of premiums owing for periods of leave without pay when employment terminates.

With respect to the DI Plan and the long-term disability (LTD) portion of the PSMIP, if amounts owing for periods of leave without pay have not been paid in full upon termination of employment, such amounts are to be paid in a lump sum. Employees can authorize the recovery of the outstanding premiums from amounts owed to them on termination.

EXAMPLES

1.This example applies to the DI Plan, the LTD portion of the PSMIP and to the DCP and concerns an employee whose leave started before December 1, 1996 and continued beyond this date.

The PSHCP is not mentioned here because, for the purposes of this Plan, the cost-sharing arrangements are already in place for the type of leave used in this example.

Employee proceeds on Relocation of Spouse Leave on October 16, 1996.

The employee would be required to pay: the employee and employer share of DI/LTD premiums and the full premium cost to maintain coverage under the DCP for the month of November, 1996; the employee's share of DI/LTD premiums (and would enjoy employer-paid coverage for the DCP) for the months of December 1996 and January, 1997; and, the employee and employer share of DI/LTD premiums and the full cost to maintain coverage under the DCP for the month of February 1997 onward.

2.This example applies to all the benefit plans and concerns an employee who commences leave after December 1, 1996.

On January 10, 1997, an employee proceeds on a period of leave without pay for care and nurturing purposes which is beyond the 52 week 'birth and adoption-related leave'. The employee is scheduled to return to work on December 1, 1997.

The employee would be required to pay the employee's share of DI/LTD premiums (and would enjoy employer-paid coverage for the DCP) for the months of February, March and April, 1997. The employee would be required to pay both the employee and employer share of contributions/premiums for DI/LTD, PSHCP coverage and the full premium cost for DCP for May, 1997 to November, 1997 inclusive.

However, before the employee's scheduled return to duty on December 1, 1997, the employee receives approval to proceed on the leave portion of a leave with income averaging arrangement effective that date, for a period of three months.

As employees on leave with income averaging are required to pay only the employee's share of premiums/contributions during the leave portions of the arrangement, the premiums/contributions required for December, 1997, January, 1998 and February, 1998, would be calculated on the employee share only basis. The employee would enjoy employer-paid coverage under the DCP during the same three month period.

GENERAL

Please be reminded that, for employees who work or reside in Quebec, employer contributions paid in respect of PSHCP and DCP coverage are taxable benefits.

Where required, consequential amendments will be made to the Insurance Administration Manual. Please read this Bulletin in conjunction with PWGSC's recently issued Compensation Directive 1996-054 of November 28, 1996, entitled "Insurance Plans - Leave Without Pay Provisions".

General enquiries concerning these changes should be directed to Frances Goguen, Benefit Plans Group (613) 952-3265.

Enquiries specific to a Plan should be directed to:

DCP - Lise Gendron (613) 952-3260

PSMIP - Beverly Bell (613) 952-3262

PSHCP - Kathy Jordan (613) 952-3264