There’s a lot of information available online about HSAs in Canada. The downside is, not all of it is true. Here are five common misconceptions about Health Spending Accounts (HSAs) in Canada, along with the facts you need to know.
Misconception 1: HSAs Are Only for Large Companies
Reality: HSAs are not limited to large corporations.
Anyone, be it a large enterprise, small or medium businesses, entrepreneurs, or even self-employed, can set up an HSA. It offers a flexible and tax-efficient way for employers of all sizes to provide health benefits to their employees.
Misconception 2: HSAs Cover Only Medical Expenses
Reality: HSAs do cover a wide range of medical expenses, they also cover other health-related costs.
Your HSA can cover your employee’s dental care, vision care, prescription medications, and even some wellness expenses like massage therapy and acupuncture. The range of eligible medical expenses is broader than you think.
Misconception 3: HSAs Are Complicated to Use
Reality: HSAs are designed to be user-friendly.
As straightforward as filing an insurance claim, HSA providers offer digital platforms that simplify the process. Once an account is set up, employees can easily submit claims for eligible expenses online.
Misconception 4: HSA Funds Expire at Year-End
Reality: HSA funds in Canada do not necessarily expire at the end of the year.
Your other health benefit plans may expire at year-end, but not your HSA. Depending on the plan, unused funds can often roll over to the next year. It allows your employees to accumulate savings for future health expenses.
Misconception 5: HSAs Are Taxable Benefits
Reality: HSAs are a tax-effective way to provide health benefits.
For employers, contributions to an HSA are tax-deductible as a business expense. The reimbursements for eligible medical expenses are generally non-taxable for employees, making it a win-win for both parties.
Understanding these common misconceptions about HSAs in Canada can help you make more informed decisions. You can provide health benefits to your employees and they can take full advantage of what HSAs offer.
Disclaimer: The information provided in this blog or any linked material is not intended and should not be considered a substitute for medical advice, diagnosis, or treatment. For holistic health advice and consultation, visit My Well Self
