A Cost-Effective and Flexible Choice for Group Benefits

by | May 5, 2022 | Uncategorized

Healthcare Spending Accounts (HCSA) are a popular choice for Ottawa businesses and might be an excellent solution for your company if you want to develop an employee benefits program for your staff but avoid the annual cost rise.

What Exactly Is Healthcare Spending Accounts Work?

  • With an HCSA, an amount of pre-determined money is paid to employees in each benefit year to cover their dental and medical expenses.
  • Depending on the plan you select, it could be as big as or as little of your group’s benefits.
  • The plan covers Ottawa Revenue Agency-approved health and dental costs, which will reimburse 100% of the total dollar amount within the HCSA.
  • It’s a “defined contributions plan” in which the cost of that plan gets determined.
  • HCSA plans get created for small groups of just one business owner.

The Advantages of HCSAs:

  • Manage your expenses.
  • You decide how you will get compensated as a member of your team. It’s a tax-deductible expense for the business.
  • The benefits that employees receive are tax-free.
  • The plan permits complete flexibility in the claim process for employees and no internal maximums or deductibles. HCSA is a great way to reward seniors and encourage more significant sales revenue or retain key employees.

What Are the Expenses That Qualify for Coverage?

Anything that qualifies for a Medical Tax Credit exemption can get covered under HCSA coverage. It is a more expansive definition than the one of a traditional employee benefits plan. Examples:

  • Prescription drugs, medical services
  • Eyeglasses, laser surgery, or laser eye surgery
  • Medical devices
  • Major dental including dental implants
  • Orthodontics for adults and children

What Happens to Unspent Funds?

Many employers prefer carrying the remainder forward, which means that excess funds roll over into the following year. But, if you have unused funds from the year one period at the close of the second year, then the carry-forward balance is returned to the business.

It is a benefit against traditional plans for insurance where the funds not used up get deposited in the insurer’s pockets.

An HCSA gives you complete control of your costs and allows your employees to be flexible.

Please reach out to Ottawa Life Insurance to learn more about setting up an HCSA for your business mail at info@ottawa-lifeinsurance.ca or call at (613) 454-1424