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Business Owners - Do You Have a Cost-Effective Benefit Plan in Place?

Professionals meeting at a boardroom table.

If you operate as an Incorporated Company, Partnership or Sole Proprietorship, CRA provides you the opportunity to implement and participate in a Private Health Services Plan (PHSP) to reduce the sting of your medical and dental expenses.

What is a PHSP?

A PHSP is a Canada Revenue Agency (CRA) approved plan that allows health, medical and dental expenses of employees to become a deductible business expense for the employer. This plan provides affordable coverage for both the self-employed and small-medium business owners. Larger corporations also benefit from this low-cost plan, and their employees are provided with an exhaustive list of eligible expenses.

CRA requires that a Third-Party Trustee and Administrator administer a PHSP to ensure accuracy and compliance with eligible expenditures. Costs for administering a plan typically range from 10-12% of the amount of expenses incurred.  These administrative fees, however, are deductible from business income.

The good thing about a PHSP is that it can be used in conjunction with a group insurance plan, to either cover the non-reimbursable portion of an expense or to cover those expenses specifically excluded from a group plan. Receiving a straight tax deduction is much better than a tax credit.

There is no waiting period for a PHSP. Also, in most cases, you’re able to go back as far as 365 days and claim reimbursement for health and/or dental expenses that you’ve already incurred – something that is not available through a group insurance plan.

If you are a business owner, consider the following highlights of this plan:

  • Industry-leading flexibility & scope of coverage
  • Savings well over 30%
  • Charges for approved claims only, reducing risk and liability
  • No medical questionnaire
  • No monthly premium – pay as you go option
  • Low cost
  • Non-taxable benefit
  • Deductible business expense
  • Cost control features & options
  • Convenient on-line system for claims processing

Have more questions pertaining to your specific business arrangement? We are here to help you create a long-term plan that helps ensure your best success.

Posted By: Halton Wealth Management

Posted on August 01, 2018.
Posted in Blog

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