What Is A Health Care Spending Account?
With a Health Spending Account (HSA), your employees have the choice to use their health benefits coverage for any medical services they want. So rather than worrying about whether or not their group health insurance plan covers a certain type of health expense (such as prescription drugs or new glasses), your employees can rest assured that their healthcare needs will be taken care of, no matter what circumstance they might find themselves in.
How do Health Spending Accounts Work?
An employer HSA is accessible to all registered employees along with their dependents. The employer sets a maximum allowance for expenditures for each employee, and the employee can choose to use their allotted amount for any expense they want, as long as that expense qualifies as a healthcare-related expense under the Income Tax Act of Canada.
Generally, eligible expenses include things like:
- basic healthcare
- vision care
- dental care
- orthodontic care
- paramedical services (such as psychological services or acupuncture) and,
- prescription drugs.
Why Offer An HSA?
Employers can offer HSA benefits either as part of a group health insurance plan, or as a stand-alone plan. Many employers choose to supplement their existing group health benefits package with a HSA. This allows their employees to top up their existing coverage with funds that can be used for certain medical expenses that might not otherwise be covered. Other employers prefer to use their HSA as the sole vehicle for their employees’ health insurance coverage. Depending on the organization’s needs, this method can sometimes provide reduced costs for the employer, as well as increased flexibility for employees.
HSAs can also be pre-paid by the employer, or work on a pay-as-you-go basis.
HSAs can be customized with a Wellness Plan for employees. This allows them to use their plan allocations for additional services like gym memberships, technology or anything else that the employer approves.
Want to know more about how to set up a HSA for your business? Want to know which insurance provider to partner with to provide the best HSA services for your employees?
Get more information on a health spending account: