What is a Health Spending Account?
In Canada, A Health Spending Account is a tax free benefit that a corporation (as an employer) provides to employees and their dependents. Company owners are included if they are also employees of the company.
A Health Spending Account can be used on its own, or in conjunction with an existing health insurance plan (to cover ‘out of pocket’ health expenses and to provide access to a broader set of health care services that are not covered by traditional plans).
Some providers use the term PHSP (Private Health Services Plan) when referring to a Health Spending Account; PHSP is in fact an umbrella term, and a Health Spending Account is only one type of PHSP.