A Health Spending Account is a Special Account (similar to a Savings Account) set up by the employer and managed by an Administrator to reimburse eligible health and dental related expenses not covered under the provincial health plan or your employee benefit plan(s). Expenses are eligible for reimbursement if they qualify as a medical expense tax credit as per Section 118.2(2) of the Federal Income Tax Act and Income Tax Folio S1-F1-C1 Medical Expense Tax Credit.
While existing Benefit Plans offer protection against the high cost of healthcare, there are still a number of ordinary healthcare expenses which may not be normally covered by the conventional Benefit Plan. When added up, this can contribute to a very significant amount. A Health Spending Account is a supplement or an alternative solution to traditional health insurance.
Contributions made by Employers are 100% tax deductible. On the part of the Employees, dollars spent using HSA are considered non-taxable income (excluding Provincial Income Tax for Quebec Residents).
- Instead of restricting the reimbursable medical and dental services, HSA empowers the member to decide on the best personal healthcare appropriate for himself and his family. Any services defined in Section 118.2(2) of the Federal Income Tax Act and Income Tax Folio S1-F1-C1 Medical Expense Tax Credit. are considered eligible and are only limited by the availability of funds.
- An unusual feature is that in addition to expenses for your spouse and dependent children, expenses for blood relatives dependent on you for financial support, may also be claimed under the HSA (e.g. mother, father, sibling).
- Unused funds at the end of the initial plan year are not lost, but carry forward to the next plan year and are used first to cover new claims in that year. Any funds remaining from year one at the end of year two are forfeited back to the contributing employer at the start of plan year three per CRA rules regarding HSA's.
- Contributions are tax deductible for the year when they were contributed.
Only ESORSE can provide you with the all of the following benefits:
- Real-time Adjudication. Members no longer need to pay up front for drugs and dental services that have already been paid for by their Employers. By presenting the cards to affiliated dentists and Pharmacies nationwide, members are now liberated from laborious task of filling out a claim form, submitting it and waiting for a reimbursement cheque.
- Submit Claim on-line. Simple form on the web eliminates the need for complicated data entry, time-consuming posting system and paper-based attachments. As the claims are electronically submitted, the system adjudicates in real-time, allowing the members to instantaneously determine their eligible treatments and allowable expenses.
- Authorize Providers to electronically reimburse claims. Members can authorize Providers to electronically file the claims, on their behalf. This will eliminate the need to shell out cash in advance. Instead, members will only pay for copay or any ineligible expenses which are not covered by their Plan Design.
- 48-hr reimbursement guarantee. Waiting time is over! All claims will be processed and paid within 48 hours. By providing Bank Information and a voided cheque, payment can be deposited directly to the members’ bank accounts.
- Enjoy all the privileges 2 days after successful registration. Health Benefit Cards will be delivered, together with User IDs and Password for the Secured Website, 2 days after successful registration. Deposited funds are made available and can be immediately used for eligible health-related expenses.
Eligible Expenses Based on Income Tax Folio: S1-F1-C1, Medical Expense Tax Credit, Income Tax Folio: S1-F1-C3, Form T2201, Disability Tax Credit Certificate; Guide RC4064, Medical and Disability-related Information.
Furthermore, over-the-counter drugs are eligible medical expenses as long as they are prescribed by a licensed medical practitioner and dispensed by a Pharmacist.
This is a partial list of eligible medical expenses. You are encouraged to view our links to relevant CRA information here.