Agreement Reached on Benefits for Retired and Current Federal Employees

27 March 2014

On March 26, 2014, the Treasury Board of Canada Secretariat announced the following:

The Government has approved a joint recommendation from the Public Service Health Care Plan Partners Committee regarding contribution rates and eligibility requirements for retired federal employees as well as benefit enhancements for all Plan members under the Public Service Health Care Plan, that will result in significant savings for Canadian taxpayers. This ensures that the Plan remains fair, competitive, and sustainable. All parties recognize the importance of continuing to offer a voluntary, supplementary health care plan to all members, which is in line with comparable private sector plans. The Government of Canada thanked all parties for reaching a fair, fiscally responsible and sustainable agreement.

As announced in Economic Action Plan 2014, retired member contributions to the Plan will transition to equal cost sharing (50:50). Further, the number of years of service required to be eligible to participate in the Plan in retirement will increase to six. The Budget also indicated that the Government of Canada was prepared to consider reasonable plan improvements provided they were fair to taxpayers.

This agreement has secured benefit enhancements for all plan members (not just retired members) for services that promote employee health and wellness, and offer coverage in areas of increased interest to plan members. The Plan remains comparable to plans of other mid-to-large employers in Canada.

Quick facts

  • Effective April 1, 2015 retired members’ cost sharing will gradually be increased from 75:25 (employer/retired member) to 50:50 over a four year period. Low income retired members will not be affected.
  • Effective January 1, 2015 the annual deductible will be eliminated. Plan members will no longer have to pay the first $60 for single coverage or $100 for family coverage per calendar year.
  • Effective October 1, 2014 benefit enhancements will be introduced including reimbursement for laser eye surgery with a lifetime maximum benefit of $1,000 and an increase to the annual maximum benefit for psychological services from $1,000 to $2,000.
  • Effective April 1, 2015 new retired members, with certain exemptions, will require a total of six years or more of pensionable service to be eligible as a retired member under the Public Service Health Care Plan.