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NHIB contributions regulations revealed
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| Published on Monday, December 14, 2009 |
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The full text of the regulations that govern the amounts to be paid into the National Health Insurance Board (NHIB) have in recent days been made available by private sources within the TCI.
The regulations are dated September 4, 2009, over three months ago. Governor Gordon Wetherell’s name appears at the bottom of the document but it is not signed or dated by the governor.
The regulations comprise a seven-page document and provide information not previously announced or made public to date.
The income of employed persons shall include all benefits received, including all vacation, holiday and overtime wages. They and their employer must pay the 5 percent contributory rate, not only on their ordinary wages but also on any family allowances, transportation allowance (over $250 per month), housing allowances, incentive and service or production bonuses, tips, Christmas bonuses, as well as telephone allowances (over $60 per month).
This portion of the regulations would appear to have an effect on those resorts and others that ordinarily provide residential accommodations, including utilities, to their employees. A calculation of the value of these accommodations must now be assessed and added to the employees’ wages for purposes of calculating the employees’ and employers’ obligation to the NHIB. This would also appear to affect on-site guest construction workers, who are provided some form of housing, as well as police and others who are also provided accommodations.
In the case of persons receiving barter income, the CEO of the NHIB has the right to determine the values received and charge the person benefiting accordingly. For example, if a roofer provides roofing labour and material to an electrical contractor, who reciprocates by doing a similar amount of electrical work, they must both pay the NHIB 5 percent of the value of the work they provided to each other.
In the case of husband and wife working as employees and/or self employed, they will be treated as two separate individuals and both will be assessed on the basis of 5 percent of their gross wages and benefits.
In the past, the plan was advertised as leaving pensioners exempt; however, the regulations now assess a 2.5 percent tax on all pensions paid in excess of $500 per month. It appears this contribution will be deducted by the pension plan and will only applies to pensions paid by the National Insurance Board.
Many persons also receive disability benefits from the NIB but these benefits are not addressed in the regulations.
There is no reference to income of any kind earned outside of the Turks and Caicos Islands by TCI residents. For example, a non-TCI national working or living legally in the TCI would not be charged on any income he or she was earning from a business enterprise they had an ownership interest in outside the TCI. An example of this is a TCI business owner who receives his income from a separate, non-TCI corporation. They would not have to pay into the NHIB but, if living here in their own residence, would qualify for benefits.
Persons holding two jobs will pay at both jobs. Persons holding employment and who are also self-employed must pay on both sources of income.
All employers are now required to keep formal and extensive employment records, which will be a new experience and requirement for small businesses in the TCI that in many cases operated informally on a cash basis and with minimal or no records. These new records must be made available on demand to the NHIB.
Anyone living abroad and returning home cannot receive benefits until after they register and pay $1,500 into the plan at the rate of $250 per month for six months. It is unclear how they access care if, for example, they fall ill during the fifth month they will have to wait 30 days for care from the NHIB plan.
A self employed person who elects not to declare his or her income may pay on the basis of $250 per month.
Self employed persons earning under $1,000 per month may pay at the rate of $50 per month. This must be determined by the CEO of the NHIB. This regulation is confusing, as it appears persons living off their savings might earn a small amount of interest, which could be much less than $1,000 per month. An example might be someone earning $20 interest income per month, who will be obliged to pay the $50 per month or $600 annually -- much more than the income itself.
Another fairly common example would be people with a business licence to sell sundries from their home. They might earn, for example, only net $200 per month and, at $50, they would be paying at the rate of 25 percent or 5 times the normal self employed rate. There are many examples of these small businesses throughout the islands. It appears this will discourage these individuals and they will close down or go underground.
Persons in a similar category earning less than $3,000 per month may pay at the rate of $150 per month.
All self-employed persons must submit records of earning in a format approved by the CEO of the NHIB.
In related news, TCI Net News has learned that, on Friday, December 11, persons attempting to access the NHIB personnel at their North Caicos location found no one was present from the board and it was unknown when they could be expected. Forms for filing contributions have not been made available to the district commissioners on the out islands; therefore, contributions could not be submitted. There have also been reports that when the NHIB scheduled appearances to field questions on the out islands prior to the November 1 filing deadline, they left the islands hours early.
A list of benefits, registration cards or information on how residents are to determine the interface between the National Ministry of Health Clinics and the Interhealth Canada providers has yet to be provided.
Under “Miscellaneous” at the end of the regulations, it is stated: “A beneficiary who defaults in the payment of contributions to the plan shall be suspended from the plan.”
It appears that after a person pays into this plan for months and perhaps years but, due to financial hardship is unable to make contributions for any period of time for which he or she is obliged, they could be summarily disqualified and forfeit all their contributions. This will be a new experience, as health care to this date has been funded by the normal tax revenue of the country. It may also require a legal test, as all persons residing in the islands make contributions to the general revenue when they purchase any product or service. In that the government is obliged to fund most of the plan and facilities from the overall tax base, all persons are contributors.
These regulations, while sometimes confusing, do not have any provision for the on-island population paying into the plan months in advance. The NHIB has imposed a requirement for all employed persons to pay at the full rates at least five or more months in advance of receiving benefits, which are only estimated to become available in April 2010. The official National Health Insurance (Contributions) Regulations of 2009 make no reference to this requirement or any penalties arising from nonpayment.
However, John Smith, chairman of the NHIB, has indicated these advance payments and stiff penalties are part of the law. | | | | Reads : 477 |
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