Health Spending Accounts
The Health Spending Account provides tax free reimbursement to your employees for medical expenses they have incurred over and above what their group benefits policy covers. Benefits under the Health Spending Account are defined by the business owner and can be changed at any time. This benefit is a deductible expense for the business under employee benefits. This program is also called a Private Health Service Plan (PHSP) and is defined in Section 118 of the Income Tax Act and detailed in Interpretation Bulletin IT-519.
Health Spending Accounts may be used for:
- Prescriptions drugs
- Vision care expenses
- Medical practitioner fees
- Dental Care services
- Diagnostic service expenses
- Ambulance charges
- Hospital charges
- Nursing home charges
- Hearing care expenses
- Speaking care expenses
- Medical supplies
- Support devices
- Medical equipment
- Prescribed devices and equipment
Some Health Spending Accounts / PHSPs have a wellness account attached to them. This allows the employer to reimburse employees for certain expenses that contribute to an employee’s overall health and lifestyle. This is a taxable benefit to the employee but is a deductible expense for the business. Providing your employees with the option to be proactive about their health and wellness will help ensure happy and productive employees.
For more information on the Private Health Spending Account Act or to request a quote on any of the above, please contact us for your personalized solution today.