Healthcare Spending Accounts (HCSA) – A Cost Effective and Customized Benefit Plan
Healthcare Spending Accounts (HCSA or HSA) are a growing option in Canadian workplaces. Each member of your staff will have unique health care and dental needs. Even the best-designed employee benefit plan will have some gaps for an individual worker’s needs.
The goal of Healthcare Spending Accounts is simple; provide a predetermined allotment of funds and let the individual employee decide how best to spend this bucket of money on their own needs or those of their family. As long as the items being claimed are CRA eligible then they can be claimed through an HSA and if company paid not be a taxable benefit to the employee.
An HSA is a great way to blend your benefits package to fit more diverse needs of different staff members. Insure the big ticket items like drugs and travel and top up coverage like paramedical and ortho for employees needing the extra. In addition, many employers like the fact that any unspent money will simply return back to the company, as opposed to going to an insurance company.
HSA’s can also provide an employer with some cost savings. Fees are only charged on a usage basis and having cost certainty by reducing abused or highly claimed benefits can reduce their base costs. While doing this, employee satisfaction with their benefits plan actually increases due to the additional flexibility.
Every Healthcare Spending Account is unique. As an employer, you decide if an HCSA will be the entire plan, or it can be part of a hybrid plan. You will then determine the amount of money provided for each segment of your employees. Once caps are established the employer will transfer money into each employer’s Healthcare Spending Account. The employee and their family will have access to these funds throughout the month for their health and dental needs, spending money where they need to. They can have quick access to their money, as opposed to traditional method of waiting for an insurance to transfer funds into a bank account.
It’s common for many employers to base HCSA on elements such as employee performance, years of service, or you can have a determined allotment for each department in your company.
There are many different healthcare expenses covered by an HCSA, any expense outlined by the Canadian Revenue Agency will be acceptable. The list of covered items is very long and is usually much more diverse than the coverage provided by a traditional employee group benefit plan. Some of an HCSA’s most attractive coverages include laser eye surgery, orthodontic care, dental implants and even special needs educational programs.
At Tanner Financial we help businesses built great benefit plans that are designed for their unique needs. Healthcare Spending Accounts are an excellent tool for building a cost-effective and likable company benefit. Want to learn more about how an HCSA can help your business? Contact one of our experienced benefit plan advisors today to get started.