If you are an incorporated business owner or professional you should open a healthcare spending account even you have a group benefit plan.

A healthcare spending account can pay for all the items a traditional plan does not cover, even the co-payment you had to pay out of pocket.

Many plans don’t cover the full cost of eye glasses or major dental work like crowns, bridges or wisdom teeth removal. Any health, dental or medical expense that is on the CRA website can be run through a healthcare spending account.

“I think a healthcare spending account is a great way to get money out of my corporation tax-free.” William Khalilieh – CPA and Business Tax Advisor

With a healthcare spending account you can have your company pay all these expenses and deduct the cost as a business expense. What is also great is that the benefit is tax-free, you your dependents or other employees do not pay any tax on the benefits paid by the company – it’s a win-win!

A healthcare spending account can be set up even if the owner is the only employee. We do recommend that the owner receive a T4 income in order to establish an employer/employee relationship. 

If you have employees a Health Spending Account is a great alternative to insured group benefit plans.  Many business owners are reluctant to offer their employees an insured plan because the plans tend to get more expensive over time. With a health spending account an employer offers each employee a notional fixed amount. Once the benefit limit is reached that’s it, the employee will have to pay personally for any additional expenses. 

Healthcare spending accounts are a great way to provide benefits to employees and stay on budget.