Health Spending Accounts

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How It Works

Subsection 248(1) of the Income Tax Act allows incorporated businesses to include all of their Private Health Services Plan outlays as a deductible business expense. This allows for the employer to provide Health & Dental benefits for its employee’s completely tax free as an “employee benefit”.

There are no recurring monthly charges to set up and operate an Innovative Benefits Health & Dental Plan, simply a small administration fee is calculated as a percentage of claims and paid to Innovative Benefits whenever a claim is processed. This eliminates waste as you only pay for what is used within your plan.

The Process:

Click here for a Cost Plus Illustration

• The business owner, employee or family member incurs a health and/or dental expense.
• The receipt(s) and claim form are submitted (emailed faxed or mailed) to Innovative Benefits for adjudication & processing.
• Innovative Benefits will invoice the business for the amount of the claim plus the administration fee. If funds are held in trust for a Health Spending Account this step is not applicable.
• We then process the claim and send a cheque payable to the plan member/claimant as a tax free reimbursement of their health and/or dental expense per your plan design.

With no monthly premiums, no deductible, and fast, easy, tax-free reimbursement, an Innovative Benefits Health & Dental Plan is a simple and effective alternative for today’s small and medium sized businesses.

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Our Fees

• One time only set up fee of $150 + GST regardless of the number of employee’s to be enrolled. This is deductible for the business
• Set up fees will be waived if moving from another provider.
• Claim admin fees start at 8% depending on the type of plan + GST (on the admin fee only).

*NOTE: Our fees have been thoughtfully established to be highly competitive in the market place. We take pride in offering a comprehensive, consultative service focused on compliance and customer value.

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Eligibility

To be eligible for Corporate Cost Plus

• Your business should be incorporated as one of the following:
• ABC manufacturing ltd or limited.
• ABC construction inc or incorporated.
• ABC engineering corp or corporation.
• Professional corporations are applicable if you are a licensed medical practitioner, health practitioner or dental practitioner, also many Professional Accountants (CPA) & Lawyer’s in Public Practice are eligible.
• 12345 Alberta Ltd and perhaps with an operating name. ie - o/a ABC plumbing services.
• Your business generates active business income.
• You perform services for the business to generate business income.
• You are paid employment income.
• If you do not receive earned income (i.e., only dividends), technically you are not an employee; you may still be able to participate in a PHSP so long as you are actively engaged in the activities of the business and that your T5 dividend is considered active income vs passive income.
• If you only receive dividend income, please consult Innovative Benefits at 780-448-0783 to determine eligibility. You can still establish a Health Spending Account PHSP to provide tax-free benefits for your employees.
• For executive plans, all executives must be included and there must be an insured or traditional Group Benefit plan in place for the other full-time employees of the business.

Like a traditional employee benefit plan, all eligible employees must be included or offered participation.

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Plan Options

We offer 3 customizable plans to ensure there is a program suitable for every type of business entity and corporate structure with employees, regardless of the size of the business or if there is an existing benefit plan. See below to help determine which plan or plans are best for you and/or your employee's.

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HSA Individual Tool

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HSA Employer Tool

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Resources

Click here for:

• List of Eligible Expenditures
• Enrollment form
• Claim form (secure-online) or Claim form (download)
• Claim instructions