What is a Health and Welfare Trust?
Under a health and welfare trust arrangement, an employer (and sometimes the employees) funds a trust account to provide employees with specified health and welfare benefits. These can include health, dental, disability and income protection benefits. The rules of the trust are set out in a trust agreement. The Canada Revenue Agency (CRA) has conditions that the trust arrangement must meet in order to be considered a health and welfare trust for tax purposes. The PEBT meets these conditions. The trust account is managed by a group of trustees. The trustees are usually appointed and frequently represent both the employer and the employee groups.
