Healthcare Spending Account
A Healthcare Spending Account (HSA) enables an employer to give their employees benefit dollars to cover these expenses.
Employers give their employees a certain amount of benefit dollars each year, which employees can spend on various health and wellness costs. Employees choose how much of their benefit dollars they want to allocate for each category, such as medical expenses and then are free to spend the dollars in the way that best suits their own situation.
The Canada Revenue Agency (CRA) provides a list of eligible benefits that can be purchased through a Healthcare Spending Account. They can include such out-of-pocket medical expenses as prescription drugs, dental work, vision and glasses, paramedicals such as chiropractor and registered massage therapy or hospital bills.
According to the CRA, eligible expenses are considered tax-deductible for the company. Any amounts reimbursed are not added to an employee’s taxable income.
Pricing: Employers only pay for the actual, qualified expenses, up to the allowable maximum, plus a 7.5% administration fee and applicable taxes.
For a sample list of eligible expenses, please click here.