Discover the distinction between a Health Spending Account and a Wellness Account and how they can benefit you.
We often receive inquiries about Health Spending Accounts (HSAs) and what expenses are eligible for reimbursement. Understanding the ins and outs of HSAs can lead to significant savings for individuals and companies. So, let's delve into what you can claim under a Health Spending Account in Canada.
HSAs are typically used to cover expenses such as prescription medications, doctor visits, dental treatments, vision care, and medical supplies. They offer employees the freedom to use their HSA funds on a wide range of eligible healthcare expenses, giving them more control over their healthcare decisions. The Canada Revenue Agency (CRA) sets the guidelines for eligible health expenses. This includes categories such as health, dental, and vision. They decide what is eligible because a Health Spending Account is non-taxable, and therefore, they require some level of medical necessity to be present for the items. This means that for an expense to be eligible, it must be incurred primarily for the prevention or treatment of a medical condition. The CRA considers whether the product or service is essential for maintaining or improving an individual's health.
One of the key advantages of HSAs is their flexibility in reimbursement. You are reimbursed for the out-of-pocket amount when you incur a healthcare expense covered by your HSA. Do you already have a group healthcare plan? Great! Let's say you visit a chiropractor and the session costs $100. If your insurance covers 80%, you can submit the remaining $20 to your HSA for reimbursement, ensuring you're not bearing the full financial burden. Whether it’s your insurance plan or your partner’s benefit plan that you’re a dependent on, remember, insurance should always be your first line of coverage. If you have an HSA, it should be secondary to insurance.
The beauty of HSAs lies in their versatility, covering a wide range of healthcare needs beyond what traditional insurance plans typically offer. From routine dental check-ups and repairs to vision care including prescription eyeglasses, contact lenses, and even laser eye surgery, HSAs have you covered. Moreover, professional services like Registered Massage Therapists, Chiropractors, Acupuncturists, and mental health professionals are often eligible for reimbursement, empowering individuals to prioritize their well-being.
If you're considering implementing an HSA for your company or want to optimize your existing plan, don't hesitate to contact us. We're here to help you navigate the complexities of employee benefit plans and maximize tax efficiency.
Download the comprehensive list of HSA-eligible items below to get started on your path to financial wellness.