A good way to offer coverage over and above that of the traditional extended health and dental benefits is with a Private Health Spending Plan (PHSP), also known as a Health Spending Account (HSA).  It is a CRA approved plan that allows incorporated companies to pay for health and dental expenses with pre-tax dollars. There is no medical underwriting, no age restriction, and no insurance premiums to pay.  The benefits are tax-free to the employees. Employers can use a PHSP to top-up your current insured benefits by providing all employees, or employees in a specific class, with the spending allowance as a tax-free perk or reward for service and loyalty.   You design the plan in accordance with the company’s budget, the company’s philosophy, the company’s need to compete for and retain qualified employees.   This is an opportunity to offer a type of “flex” enhanced benefit to employees without ever having to increase your costs. How it works… A health spending account functions much like a bank account. The plan sponsor allocates a pre-determined amount of benefit credits (ie. $500) to each plan member. In turn, the member can then use these credits to pay medical and dental expenses that are not covered by provincial or employee extended health care plans. The money held in and spent from this account is entirely tax free to the member, with the only exception being in the province of Quebec. Benefits

• Health expenses are paid in pre-tax dollars
• HSAs are a tax-deductable expense for employers
• When combined with reduced coverage for other benefits in the extended health care plan, money is saved for the employer and the employee is given more flexibility
• Helps educate employees about the value of the benefits being provided by the employer
• Allows employees to have greater flexibility and choice

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