OK, maybe not a gift… more like an opportunity!
Health Spending Accounts were first introduced in 1986 by CRA, for both corporations and the self-employed. Most business owners haven’t heard about them and even if they have, don’t understand their potential. CRA isn’t exactly advertising to tell you ways to have greater write-offs, are they?
Health Spending Accounts or HSA’s work like a corporate bank account that you use for your medical expenses and your tax advantage is better than using the medical expense credit on your personal taxes. There are several great things about setting up and using an HSA. Some of the highlights include: a broader range of medical and dental expenses than in a standard benefit plan, the definition of dependent used for an HSA is the CRA definition that includes parents, siblings and extended family which is much more realistic than the insurer definition, the maximums need only be reasonable for your circumstances if you are incorporated (if you are self employed there are prescribed maximums). Employees enrolled in an HSA enjoy maximum flexibility in the items they can expense and can therefore make their benefit plan fit their own families’ Healthcare priorities.
Some circumstances where a HSA shines:
A business owner who supports an elderly parent and can expense the cost for nursing assistance plus in their parents’ home or the cost of institutional care.
Overage children still living at home can be included in the HSA as dependents without the requirement to be enrolled in school.
Special needs children can require extensive and continuous testing, tutoring, supplements and dietary needs which can all be expensed through an HSA.
Your group benefit plan doesn’t cover or offer the maximums needed for the alternative treatments, supplements and testing that you value for maintaining or regaining your health.
The dental work your dentist is recommending is not covered under your benefit plan or has too low a maximum (typically for root canal, scaling, crowns, veneers, implants, bridges and braces).
Attractive as both a supplement to a benefit plan or as a replacement for a plan, HSA’s provide many advantages and opportunities for the savvy business owner to maximize their expensibles!
Diana Tuszynski, President
The Benefits Edge Insurance Services Limited