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Is a Health Care Spending Account (HSA) right for you?
Watch our September 2022 Money Minute, a new Vlog from Connect Wealth. In this video, Andrew Gordon, Connect Wealth and Andrew Brandsma, National Health Claim, discuss our September blog post and the benefits of setting up a Health Care Spending Account for your business.
When I left the Credit Union to start my own business, it meant that I also left my Group Benefits behind. No more “free” dental visits, no more prescription sunglasses, and, most importantly, no more paramedical care coverage (e.g., massage, physio, chiro, etc.). There were numerous options to regain this coverage, but at the time, the cost of available plans outweighed the payout.
What an HSA can do for you
Then came along the world of Health Care Spending (HSA) accounts. These tidy little accounts allow business owners to save money instead of paying money. In other words, as you pay for medical expenses through your business, you only pay as they come as opposed to paying a monthly premium. These expenses then become a deduction to the business which allows the owner to pull money out of their business tax free, which is something that all business owners love to do.
What can you claim?
What can be claimed is a common question that is asked because benefits are typically limited to when, how often, and how much you can claim. The good news here is the list of eligible expenses goes on and on, from root canals to Naturopath to IVF and more. The list is quite extensive as we’ve only touched the tip of the iceberg at this point. In addition, medical expense claims are not exclusive to Canada. For instance, if you choose to make a claim for medical expenses incurred outside of Canada from the list of eligible expenses, they too will be covered by your HSA. Note that the list of eligible expenses fall under the medical expense tax credit guidelines set by CRA.
Who can make a claim?
As a business owner of the plan, you will obviously be eligible to make claims on behalf of yourself. If you choose to set this up on behalf of your company, you may add employees to this plan, and/or family members. The plan is customized to you as a business owner and can be set up where you, your family, and others (e.g., employees) may participate in the plan. Within each plan, it can be customized on a per class basis meaning that you can set classes as a business owner for your employees and provide limits on how much they can claim on an annual basis.
If this is something that you would like to explore with us, please don’t hesitate to reach out to our team and we will help you build the right plan for your business.
Connect Wealth is an independent financial planning firm that offers holistic advice to clients based on their current goals and future aspirations. We use well-established workflows and cutting-edge technology to maximize planning efficiencies while simplifying the process for clients. Learn how you can maximize your financial opportunities at www.connectwealth.com