Specialty Benefits
What is a Health Spending Account?
A Health Spending Account (HSA) is a tax-efficient option for Canadian employers to provide medical, vision, and dental benefits to their employees. Approved by the Canada Revenue Agency (CRA), HSAs offer flexibility as an alternative or addition to standard group benefit plans.
Employees receive a set amount of funds annually to cover personal medical expenses, giving them control over their healthcare spending based on their needs. This benefits both employers, who can control costs, and employees, who have autonomy over their healthcare funds.
What is a Health Spending Account?
Why Should a Business Owner Consider Setting up a Health Spending Account?
What is Covered?
A Health Care Spending Account (HCSA) can be a valuable tool for employees to cover various health- related expenses. Here's a list of common items that can typically be reimbursed through a Health Care Spending Account:
- Prescription Drugs: Prescription medications prescribed by a licensed healthcare provider.
- Dental Services:
This includes routine check-ups, cleanings, fillings, extractions, orthodontics, and other dental procedures.
- Vision Care:
Expenses related to eye examinations, prescription eye glasses, contact lenses, and corrective eye surgery.
- Medical Services and Supplies:
Fees for chiropractors, physiotherapists, massage therapists, podiatrists, orthopedic shoes, and other medical supplies.
- Medical Equipment:
Expenses for mobility aids like wheelchairs, crutches, walkers and other durable medical equipment.
- Psychological Services:
Fees for psychologists or psychotherapists.
- Alternative Therapy:
Costs associated with acupuncture, naturopathy, homeopathy, and other alternative therapies.
- Medical Devices and Supplies:
Expenses for items like blood pressure monitors, diabetic supplies and other medical devices.
- Procedures and Treatments: Fertility related procedures, medical services provided outside of Canada, treatment for addiction, private healthcare.
It's essential to remember to keep detailed receipts for all eligible expenses, as they will be needed to submit claims for reimbursement from a Health Care Spending Account. Additionally, it's crucial to check with the specific plan details and regulations, as eligibility can vary based on the terms of the plan and any relevant provincial regulations.
What is a Wellness Spending Account?
A Wellness Spending Account is a taxable spending account provided by employers to promote healthier lifestyles and employee satisfaction. Wellness accounts are taxable, so they are extremely flexible. The only governing body over eligible expenses is the employer.
Typically, eligible wellness expenses are those that focus on nutrition, exercise, and mindfulness. You as the employer can choose to cover an extremely wide range of expenses.
Some examples include:
- Meditation Classes
- Gym Memberships or Fitness Classes
- Sports Equipment
- Wearable Fitness Tracker
- Personal Development Courses
- Over the Counter Supplements
- Recreational Activities
- Daycare
- Elder Care
What is a Flex Plan?
A Flexplan is a combination of HSA (non-taxable) and WSA (taxable) plans. It allows an employee to select from the list of available options (provided by the employer) that best suits that employee based on their stage of life. The employee can allocate their funds based on what suits their needs.
A Flexplan can include any or all of the following: HSA, WSA, RRSP, TFSA. You as the employer would choose which options you would want to provide to your employees. From there the employee would choose how to allocate their yearly amount between the accounts. Once the amount is allocated, the credits are locked in for the plan year and the allocation cannot be changed.
