Coverage of a Health Spending Account
A health spending account provides each employee with a personal non-taxable benefit budget. You set the funding formula at the beginning of the year and never need to worry about inflation. The Income Tax Act and regulations govern what expenses are eligible for reimbursement. No one needs to worry about deductibles, coinsurance, limitations or exclusions. Employees are able to express their personal healthcare values which each purchase decision. If they spend more than their account balance then the unreimbursed portion of the claim is paid with contributions made later in the calendar year.
Your health spending account covers all medical expenses permitted by the Canada Revenue Agency.
- Expenses can be for:
- your spouse who resides with you, or
- your children and stepchildren who:
- are dependent on you for support at some time in the year, and
- reside in Canada at some time in the year, and
- are unmarried, and
- work less than 30 hours per week, and
- are either under the age of 18, or under the age of 25 and attending an college or university.
- Certain financial dependent disabled family members residing in Canada
- The most common claims are for dental, drugs, vision and professional services (massage therapy, chiropractic).
- Claims must be for products and service that are medically necessary to treat an illness or injury.
- Products and service may be purchased anywhere in the world.
- Expenses can be reimbursed during the year the products and services were purchased with funds in the health spending account.