Canada has earned the reputation for among the best health care systems in the world and rightfully so.

However, many people make the mistake of assuming we have free health care. Although health care in Canada is publicly funded, there are many out-of-pocket medical expenses we incur on a daily basis.

As such, health and dental coverage for employers and employees alike are an important element of any business. This is especially true when considering how to best establish small family business health benefits.

Thankfully there is a flexible, cost-effective solution; one that is sometimes overlooked by business owners.

A Health Spending Account (or HSA) is a tax-efficient way to pay for health and dental expenses. It can fit into a company's existing insurance plan to pay for things not covered (or partially covered), or it can be a stand-alone solution by providing business owners (and their employees) a reimbursement plan for most health and dental expenses. Either way, the tax advantages of using a Health Spending Account are unparalleled and should be part of your health and dental budgeting strategy.

Using Pre-Tax dollars to pay for Healthcare

The Canadian Government considers Healthcare expenses to be tax-free if managed within a Health Spending Account.

A Health Spending Account creates an environment for companies to pay for healthcare expenses directly using pre-tax dollars. When comparing the difference between adding money to your T4 income in order to pay for healthcare expenses versus your business being able to pay directly for them, the savings are significant.

Flexible Limits

Using an HSA, buiness owners decide if they want to extend different limits for different classifications of employees.

With a Health Spending Account, the owner has control over how to manage the HSA limits offered to their employees. Different HSA limits may be created for "single" versus "family" and "executive" versus "manager" versus "full-time". Or everyone can simply receive the same amount; it is a decision of the business owner.

An HSA Has You, Your Family & Employees Covered

A Health Spending Account offers a a very wide range of allowable expenses.

Having an HSA doesn't mean much if owners and employees can't claim what they need; however, just the opposite is the case. An HSA covers a much wider range of expenses as compared to traditional insurance plans, and each person can claim as much towards any expense they want (up to their respective yearly limit), including:

  • Dental (Basic & Major)
  • Orthodontics
  • Prescription Drugs
  • Paramedical Services
  • Vision Care
  • Physiotherapy
  • Chiropractor

In fact, even more types of expenses, in addition to those listed above, are eligible under an HSA.

Interested in learning more? If you own a family business or are an incorporated professional, please take a look at Olympia's Beginner's Guide to Health Spending Accounts.

Download Beginner's HSA Guide for an incorporated individual

Or do you own a small business with employees? Download Olympia's Beginner's Guide to Group Health Spending Accounts.

Download Beginner's HSA Guide for a small business with employees


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