Health Care Spending Accounts (HCSA)
Health Care Spending Accounts can be a component of a flexible benefit plan, used to provide additional flexibility to a traditional group insurance environment, or as a stand-alone benefit. HCSA provides a way to deliver benefits using pre-tax dollars. Premiums are a tax-deductible business expense and the benefits received are tax-free. This provides a significant advantage, to address medical and dental expenses with corporate dollars in the most tax-effective way possible.
At the beginning of the year the employer provides a set amount (number of credits) to a fund account for each employee. Employees use the amount (or credits) at their discretion, to pay for health and/or dental expenses not covered by their provincial or group insurance plan. The balance of their HCSA is reduced with each paid claim.
Any medical expense that qualifies under the Income Tax Act can be reimbursed from this account.
To the Employer, the advantages are:
- Effective control of plan costs as the funds allocated and administration charges are defined each year
- Higher awareness by employees of medical costs
- Added value and flexibility to a group plan
To the Employee, the advantages are:
- An increase in the range of benefits available
- The ability to choose which medical and/or dental expenses are reimbursed
- A more active role in planning and controlling their own health care expenses
To receive Healthcare Spending Account information tailored to fit your objectives, your budget, and your employee's needs, select the Request Info feature in side bar.