CRA (Canada Revenue Agency) has provided guidelines that facilitate businesses (incorporated or unincorporated) the ability to pay ‘arms length’ employees health and dental expenses in a tax-effective and cost-efficient manner.
This is not the same as traditional group or individual health/dental insurance programs and there are no ongoing premium payments.
Writing off health and dental expenses can create a savings of over 30% on medical/dental expenses. This is a very effective way to cut taxes and reduce medical costs throughout the year.
Your employees are your most valuable assets. Encouraging wellness in the workplace has been proven to improve performance at all levels – reducing absenteeism, increasing productivity is a win-win strategy.
In fact, encouraging optimal health in the workplace even trickles out to the families of your staff members, promoting healthier communities.
Providing people a way to make medical and dental expenses affordable, shows them that you care, which can also lead to less employee turnover.
If you own a business (incorporated or not), pay income tax and have medical bills, you qualify. Dependants are also eligible but there are a few restrictions.
How does it work?
What is covered with an HSA?
One of the best things about this plan is that there are very few restrictions. Do you rely on physiotherapy? That’s covered with the HSA. How about vision wear, laser eye surgery or maybe you need a registered massage therapist regularly … it’s all covered.
An HSA allows you to claim orthodontics, one example being your child’s braces, another being corrective dentistry.
Here’s one you may not have considered – have you ever wanted, or needed, an MRI? Yup, that’s covered too.
Chiropractic, prescription drugs, Naturopaths, Orthotics, Medical Marijuana… the list is long and varied.
How much can I deduct in a year?
CRA has a criteria for “reasonable” limits and they are also determined by employee classification. One example might be an executive receives $10,000 of coverage, while senior management may only get $5,000, and a full time employee would receive $1500.
If this sounds like a feasible solution for your small business, it’s time to chat with Lisa Jaffary. Lisa is Insure Wealth Groups HSA expert and she can guide you along the application process all the way to understanding how the portal app works.