How HSA works

Who is eligible for HSA

The cost

The benefits of HSA's

Calgary Health Spending Accounts are also referred to as Self-Insured Private Health Services Plans (PHSP) and are arranged by employers. HSA's are multipurpose and can be used by employees to supplement insured plan services or be used in place of traditional group benefit plans.

Small business owners fund HSA up to a maximum annual allocation so that employees can pay their medical bills for services and expenses not covered by provincial medicare programs. Expenses can be claimed for things like prescription drugs, eyeglasses, or physiotherapy.  All employees have the same annual allocation but they may use the benefit in different ways. One employee may use their HSA to cover physiotherapy related to an old sports injury while another employee may use their benefit to cover the cost of a few pairs of prescription glasses. Everyone gets reimbursement for the services they need.

The Canada Revenue Agency has outlined who is eligible* for Calgary Health spending accounts and who is not. If a business is incorporated, the owner and employees are eligible for HSA. Shareholders can be eligible for HSA only if they are also an employee who is drawing a salary from the business. If a business is not incorporated, the owner and employees are eligible provided there is at least one employee who is not a stakeholder in the business.  Sole proprietors who do not have any employees are not eligible for HSA.

The cost of offering HSA is the sum total of the maximum annual benefit offered, the transaction fee, and the initial setup fee charged by the third-party administrator.

Calgary health spending accounts are beneficial for the employees and the company!  Many employees appreciate the flexibility of HSA since they can use the funds to meet their specific needs without worrying about deductibles or annual limits on particular services or expenses. The benefits for employers are twofold.  Firstly, businesses know exactly how much the maximum benefit costs will be, which is helpful for expenditure planning and budgeting.  Secondly, all the costs related to HSA can be deducted by the business. In many cases, the tax savings can actually be significant when compared to not offering a plan at all.

As with any major decision, business owners should seek educated advice that directly accounts for their unique needs and circumstances. We will help you to determine if an HSA is the best, most cost-effective option for you, your business, and your employees.