06 Oct What is a Health Spending Account, and who can set one up?
Individual health plans and group benefit plans rarely cover 100% of every cost incurred by plan members throughout the year. Business owners and self-employed individuals have turned to setting up a health spending account (HSAs) to cover expenses that would normally be paid out of pocket.
Incorporated business owners: For large and small business (as small as one person), HSAs are an extremely tax-effective way for business owners to pay for their own CRA-approved health and dental expenses.
Self-employed individuals: Self-employed individuals can also benefit from an HSA, although limits are lower and plans must include an insurance component.
Employers: Employers who feel comfortable with changes in monthly cash flow may also wish to use an HSA to top-up or enhance their employee benefits program. This includes:
- Employers who can’t obtain group coverage due to industry
- Employers who want to offer employees flexibility to pay for expenses that are infrequently use or are too costly to insure such as orthodontics or vision
- Employers who want to define and budget for the amount of benefits coverage they want to offer staff each year.
If you qualify, why wouldn’t you have it?
Contact us for more information if you’re interested in how a health spending account could work for you. There is no set up fee, no annual fee, and if you never use it, it costs you nothing. Plus, your eligible medical, dental, and vision expenses become a 100% deduction for your company; you and your employees receive a tax-free reimbursement.