CDCP vs employer benefits comes down to one rule: the federal Canadian Dental Care Plan (CDCP) is only for people with no access to dental insurance. If your business offers dental in any form, the employees it covers generally can't use the CDCP, even if they waive your plan. So dropping dental is a trade-off, not a free saving. Below you'll find the rule from the employer's side, a plan-design table and a decision checklist.
CDCP vs employer benefits: should you still offer dental?
If you offer dental in any form, including employee-paid dental or a health spending account that covers dental, your staff generally can't use the CDCP. That holds even if they waive your plan or never claim. The CDCP is only for people with no dental access anywhere who also meet its income, tax-filing and residency tests.
That doesn't mean you must offer dental, or that you should drop it. It means weighing who could qualify, who couldn't and what each choice costs. The rules below come from canada.ca and the Canada Revenue Agency (CRA), as of October 2026.
How access to dental insurance through an employer affects CDCP eligibility
Canada.ca sets out who qualifies for the CDCP. To be eligible, a person must:
- Have no access to private dental insurance or coverage, including a health spending account that covers dental costs.
- Have adjusted family net income under $90,000.
- Have filed their tax return.
- Be a resident of Canada for tax purposes.
The access test is the part you control. Canada.ca lists coverage through work or a pension plan as an exclusion, even if the person never used it, decided not to enrol or must pay a premium for it. Access through a family member's plan can rule them out too.
Can employees opt out of dental for the CDCP?
Generally, no. The test is access, not enrolment. The only exception canada.ca lists is for retirees who opted out of pension plan dental coverage before December 11, 2023, and can't opt back in. It doesn't help active employees.
How the government learns what you offer
You report dental access in box 45 of each employee's T4 slip, under the CRA's T4 slip guidance. The code shows what you offered as of December 31, whether or not the employee enrolled.
| Box 45 code | What it means |
|---|---|
| 1 | No access to any dental insurance or dental coverage through you |
| 2 | Employee only |
| 3 | Employee, spouse or common-law partner, and dependent children |
| 4 | Employee and spouse or common-law partner |
| 5 | Employee and dependent children |
For 2023 and 2024, the CRA let employers leave the box blank when code 1 applied, but that relief no longer applies from 2025. Canada.ca's guidance for employers says a blank or incorrect code can lead to a penalty of $100 per slip.
Who on your team might qualify for the CDCP?
You can't know for sure. The income test uses adjusted family net income, which counts a spouse's or partner's income too, and you only see your own payroll.
- Could qualify without your dental: staff with family net income under $90,000 and no dental through a family member. Staff your plan already excludes, reported as code 1, are in the same position today.
- No CDCP fallback: staff with family net income of $90,000 or more, staff with dental through a family member's plan, and anyone who hasn't filed a tax return.
The CDCP isn't always free at the dentist, either. According to canada.ca's coverage page, families under $70,000 pay no co-payment. Families from $70,000 to $79,999 pay 40% of the CDCP fee, and families from $80,000 to $89,999 pay 60%. A provider may also charge more than the CDCP pays, and the member pays that difference.
Plan designs and their effect on CDCP eligibility
Here's how common designs for group benefits for small business line up against the canada.ca access rule. "Likely code" is the box 45 code for an employee in that situation on December 31.
| Plan design | Counts as dental access? | Likely box 45 code | Effect on the employee's CDCP eligibility | Basis in canada.ca guidance |
|---|---|---|---|---|
| Insured dental, employer pays all or part | Yes | 2 to 5 | Not eligible, even if they waive or never claim | Access through work counts, used or not |
| Voluntary dental, employee pays 100% at your group rate | Yes | 2 to 5 | Not eligible | CRA: report a negotiated group rate even if you pay nothing |
| Health spending account that can pay dental costs | Yes | 2 to 5 | Not eligible | Access includes HSAs that cover dental costs |
| Health spending account that excludes dental | No | 1 | Possible, if they meet the other tests | An HSA without dental isn't dental access |
| Health and drug plan with no dental | No | 1 | Possible, if they meet the other tests | Code 1 means no dental coverage of any kind through you |
| Dental for some employee classes only | Yes, for covered classes | 2 to 5, or 1, by class | Not eligible in covered classes; possible in others | Reported employee by employee |
| No benefits | No | 1 | Possible, if they meet the other tests | No access through you |
Based on canada.ca and CRA guidance as of October 2026. "Possible" still depends on family income, tax filing, residency and dental access through a family member. Check canada.ca before you change your plan.
Should my business drop dental coverage? Costs and risks
Start with the real saving: ask your insurer or advisor how much of your premium dental makes up. For context, here's what Instasure's estimate model shows for three plan designs.
| Plan design (Instasure model) | Per employee, per month | Typical for 5 employees, per month | Range for 5 employees |
|---|---|---|---|
| Health spending account only | $110 | $550 | $440 to $680 |
| Core health and dental (drugs, dental, paramedical, life and AD&D) | $210 | $1,050 | $840 to $1,300 |
| Comprehensive with long-term disability (richer dental and vision) | $290 | $1,450 | $1,160 to $1,800 |
Instasure estimate for an example profile (5 employees in Ontario), as of October 2026. These are modelled figures, not quotes or averages. The model doesn't price dental on its own, so the gap between rows isn't the cost of dental.
Then weigh the risks of removing it:
- Some staff lose dental entirely. Families with net income of $90,000 or more get no CDCP fallback.
- Co-payments and extra charges. Families from $70,000 to $89,999 pay 40% or 60% of the CDCP fee, plus any amount a provider bills above it.
- Dental only. The CDCP doesn't replace drug, vision or paramedical coverage.
- Eligibility can change. Canada.ca says coverage ends if a member is later found ineligible.
- Hiring and retention. Staff may see a lost benefit as a pay cut.
- Contracts. If benefits are in employment contracts or a collective agreement, get legal advice first.
Alternatives: HSA-only dental, voluntary dental and tiered plans
Keeping dental as is and dropping it aren't the only choices.
Health spending account and CDCP eligibility
A health spending account (HSA) gives each employee a set yearly budget for eligible expenses. If it can pay dental costs, canada.ca counts it as access. If dental is excluded, you'd report code 1. A dental-free HSA still helps with costs such as drugs or vision care and leaves the CDCP open to staff who qualify.
Voluntary dental
Employee-paid dental at your group rate still counts as access, according to the CRA. It closes the CDCP to everyone you offer it to, including staff who don't buy it.
Tiered or class-based plans
You can offer different benefits to different classes, such as full-time and part-time staff. Staff in a class without dental get code 1. Define classes by job criteria such as hours or role, and have your advisor confirm the insurer accepts the split.
You can also keep dental and trim how it pays, through coinsurance or annual maximums. Staff keep a plan but stay ineligible for the CDCP.
Communicating changes to employees
- Explain the access rule. If you offer dental, opting out of it doesn't open the CDCP.
- Don't promise eligibility. Only the government decides. Point staff to canada.ca's eligibility page.
- Explain the timing. Each T4 code reflects your plan on December 31.
- Be ready for paperwork. A CDCP member chosen for a member eligibility review may be asked for proof, such as a letter confirming you don't offer dental coverage.
- Talk about the whole package. Say what stays, what changes and why.
Group benefits for small business in Ontario, BC and Alberta
The CDCP access rule and box 45 reporting are federal, so employee benefits for small business face the same test in every province. What changes is the advisor, who must be licensed in your province. Our model's example estimates above are the same in each of these provinces.
- Ontario: compare plan designs on our group benefits Ontario page.
- British Columbia: see our group benefits BC page.
- Alberta: see our group benefits Alberta page.
- Quebec: our group benefits Quebec page is information only; advisor service isn't available there yet.
Decision checklist for employers
Settle the CDCP vs employer benefits question with these steps before your renewal date:
- Get the numbers. Ask what dental costs within your premium.
- Map coverage elsewhere. Staff who waived for a spouse's plan wouldn't gain the CDCP if you dropped dental.
- Think about pay. Higher-paid staff are less likely to qualify for the CDCP.
- Weigh hiring and retention. Think about the people you most want to keep.
- Price the middle options. Compare a dental-free HSA, a class-based plan and a trimmed dental benefit.
- Check your obligations. Review employment contracts and any collective agreement.
- Plan your reporting. Match each box 45 code to your plan on December 31.
- Communicate early. Point staff to canada.ca and promise no one eligibility.
- Get a plan review. Ask a licensed benefits advisor to model each option.
Michael's take
As a planner, I see benefits as part of total pay, not a line to trim at renewal. The CDCP helps families who qualify, but eligibility depends on household income you can't see and that can change. My rule of thumb is not to build a team's dental coverage around a test only some of them will pass.
If cost is the pressure, I'd look at plan design before removing dental: the coinsurance, the annual maximum, a class split or a health spending account. Then talk to your people before you decide. A premium saving can cost far more if it pushes a key employee to leave.
Next steps
Get an instant group benefits estimate for your team size and plan design. Then request a plan review with a licensed benefits advisor on our group benefits page; they can show what dental costs in your plan and model the alternatives.
If some staff will rely on the CDCP or buy their own cover, our guide to private dental insurance vs the CDCP explains their side, and our health and dental insurance page covers individual plans.