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.
