There are many health, dental, vision and drugs coverage strategies for Canadian companies. The PreTax Health Spending Account has a place in them all, whether you’re a single owner-employee or 1000+ employees.
If Your company does not have a medical or group benefit plan
PreTax Health can be used as a stand-alone plan, or it can be used in conjunction with a traditional insured program or group benefits.
As a stand-alone plan, you can classify each employee, and assign each classification an annual reimbursement limit. Different classifications (i.e. executives, part-time staff, etc.) may have different reimbursement limits. Employees will be reimbursed for all eligible claims until they reach their assigned limit. If there are unused balances, there is an option available to carry these amounts forward for one calendar year.
If You already have individual health care coverage (eg. Blue Cross)
PreTax Health enables reimbursement of health and dental expenses (or portions of unpaid claims) not covered by Blue Cross (or similar insurance coverage). For example, your Blue Cross-type plan may reimburse your dental expenses at 60% up to an annual total of $600. With PreTax Health, any dental expenses above the $600 annual limit, as well as the remaining 40% not reimbursed, could now be claimed for reimbursement from your company. You can now effectively cover up to 100% of your family’s medical and dental expenses through your corporation. You’ll also gain access to a much wider range of health care services, including: vision care, laser eye surgery, massage, orthodontics, etc.
If You are covered under your spouse’s benefit plan
When your incorporated business implements the PreTax Health Spending Account, it will cover expenses either partially paid by your spouse’s benefit plan or disallowed due to plan design. In addition, you may cover your spouse and dependent children so that any of their expenses, which may have been partially covered or disallowed due to plan design, are now 100% reimbursed. In this situation, you, your spouse, and your dependents would first process any claims through your spouse’s plan. Once the Explanation of Benefits Statement arrives from your spouse’s group insurance company, claim the unpaid and left-over expense from your company through PreTax Health.
If You are the sole employee of your corporation
An incorporated business with one employee (eg the owner) can be set up with the PreTax Health Spending Account. In this instance, an executive class is formed and the “employee” and their dependents (immediate family) can claim all eligible health or dental expenses through PreTax Health, up to the annual maximum. The annual maximum claim limit is recommended to be a reasonable amount proportional to your annual income.
If You have many employees in your corporation
For companies with many employees, the PreTax Health Spending Account is an innovative solution to the challenge of providing cost-effective benefits to employees. The PreTax Health Spending Account can be structured to provide varying reimbursement limits to different classifications of employees (i.e. executives, full-time staff, etc.). These limits can be tailored to coordinate with your company’s overall compensation philosophy.
if You would like to enhance your company’s existing benefit plan
If your company has a traditional benefits program already in place, you can use the PreTax Health Spending Account to cover items not included in your insured program, such as orthodontics, laser-eye surgery, or massage therapy. Any items that qualify as medical expenses in the Income Tax Act will qualify for reimbursement under this Plan. The PreTax Health Spending Account can even be used to cover items that are only partially covered by an insured program (because of co-insurance amounts or deductibles) to receive full reimbursement of these expenses. Employees can even coordinate PreTax Health with coverage provided under a spouse’s benefit plan.