A tax-effective tool, Health Spending Accounts (HSAs) in Canada allows employers to provide flexible health benefits to their employees that are usually not covered by traditional health insurance.
FAQs About Health Spending Accounts (HSAs)
- How do HSAs work in Canada?
A flexible health insurance plan, HSAs in Canada allows Canadian businesses to provide tax-free reimbursements to their employees. As an employer, you allocate a certain amount for each employee’s HSA which can be claimed by the employee to cover their healthcare cost.
The claims are processed through your selected HSA provider in compliance with the guidelines set by the Canadian Revenue Agency (CRA). The reimbursement is tax-free for your employee and a deductible expense for you.
2. What eligible medical expenses are covered under an HSA?
The eligible medical expenses covered under an HSA are more than your typical health insurance plan. It covers:
- Medical services - chiropractic care, physiotherapy, massage, etc.
- Travel-related expenses - ambulance, out-of-town treatments
- Diagnostic tests - MRI, CT Scan
- Prescription drugs
- Medical devices
- Dental care
- Vision care
3. How do HSAs integrate with an existing insurance plan?
HSAs also cover those expenses that are not covered by insurance plans. Your employees can claim the remaining balance from the HSA after insurance payouts.
4. How can I benefit from an HSA?
HSAs in Canada can be customized to fit businesses across all industries and sizes. You can greatly benefit from an HSA if you are an/a :
- Incorporated professional - Convert personal medical expenses to tax-deductible business expenses
- Small and medium businesses (SMBs) - A cost-effective way to offer health benefits to employees.
- Employee - Tax-free reimbursement for eligible medical expenses
5. How can an employee claim for their eligible medical expense?
Eligible medical expenses can be easily claimed by an employee online. Claims for previous months are allowed until the designated deadline. For unused funds, you can carry forward or forfeit at year-end depending on your HSA plan.
HSA has become a powerful tool for Canadian employers to provide affordable and flexible healthcare benefits to their employees. It also proves to be a highly cost-effective and attractive solution for startups and SMBs.
Get HSA tailored to your requirements.
Disclaimer: The information provided in this blog or in 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
