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A Private Health Services Plan or Health and Wellness Plan is your plan.
Without a plan, CRA guidelines do not allow Canadian businesses to deduct personal health services, such as extensive dental work, which are paid for outside an approved plan.
Traditional health plans are not flexible, do not allow transfering of costs, and have unflexible coverage limits. If you currently have a traditional plan, you know that traditional plans are subject to wait times for coverages on major medical or dental services, do not cover the full percentage cost of the expenditure, and have fixed upper limits on covered health costs.
Many companies today are taking advantage of setting up their own private health care plan: to gain better coverage and complete flexibility.
In 1988, Canada Revenue Agency (CRA) approved companies to set up their own private health plan provided that a qualified third party adjudicator is used to administer it. This private plan allows the corporation to tax deduct health care expenses. All approved payments are issued tax-free to employees. Directors and general owners set upper limits and coverages by different employee classes. A private plan can work with an existing traditional plan or replace it.
The reality is that traditional plans are paid for by "healthy" companies. As claims are placed, plan coverage rates rise. A company that places few claims simply do not receive the health benefits that they contribute to. Statistics demonstrate that in a typical plan, less than 60% is actually used by the company: the rest becomes profit to the traditional plan administrator. This is not an issue with a private health plan: if your employees do not use the set health coverage limit, you simply do not pay for the coverage. With your own plan, individual coverages are flexible: one employee may use their entire benefit for dental work, another for something entirely different. These features make both employees and employers happy!
Many people are becoming more health minded: eating well and exercising decreases the usage of traditional health plans. Consider tailoring your plan to promote well-being: include non traditional wellness incentive coverages such as health spa memberships. However you decide to tailor your plan..
We believe that a private health services plan is a benefit to all companies.
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