Did you know that Health and Dental Premiums are eligible under Health Spending Accounts?
Employers use cost sharing or simply offer a Health Spending Account HSA to offer a more robust plan to employees and encourage plan consumerism.
When cost sharing is applied to a traditional insured benefits plan, we normally recommend that employees pay for benefits to optimize taxation:
Long Term Disability premiums so that any benefit received would be tax-free in the event of a claim.
Life, Critical Illness insurance premiums so that those premium amounts don't have to be added as taxable benefits.
But when employees pay a portion of health and dental premiums, those premiums can be claimed under a Health Spending Account.
When an employer offers an HSA only, employees can purchase an individual health and dental program and submit the cost of the premiums to the HSA for reimbursement.
Here are some quick tips to help employers and employees leverage this eligible claim:
Canada Revenue Agency allows health and dental premiums only - no Life, Long Term Disability, or other non health and dental premium costs.
The cost of a government health program is not eligible under the plan, however, the Alberta Blue Cross Non-Group plan is not considered a government pharmacare plan.
As an employer, it's best practice to break out deductions for health and dental premiums from the cost of other benefit premiums. Employees would have to provide this breakdown for the purposes of their HSA claim.
When employees buy an individual health and dental plan, they can use the insurer's annual statement -- or the monthly fee taken out of their account for claim submission.
Giving employees the opportunity to use their HSAs as flexibly as possible enhances the value of that benefit.
As an employer, this strategy could help expand your benefit offering where shared health and dental premiums could free up your benefits investment to offer a health spending account. Some employees would use this to cover additional health and dental benefit costs where others could use the HSA to cover the cost of their share of premiums.
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