Although most Canadians receive their health benefits from the government’s public plan, many people rely on supplemental benefits to get all of the vital services that they need. Many group benefits for small business employees help to cover non-essential, elective, or non-hospital care, such as plans for vision and dental. However, there is another way that Canadians are seeking the care they need, and it is through the health care spending accounts that their employers administer.
Health spending accounts, or HSAs for short, are a newer type of benefit that are tax-advantaged and approved by the Canada Revenue Agency. Why do so many employers like to offer health care spending accounts to their employees? Here are just a few of the benefits that employers and employees enjoy with these accounts:
1. Tax Advantages: Health spending accounts accounts use 100% pre-taxed dollars, so they help to lower employees’ tax bills. This is also an advantage for small business employers who have to pay taxes per employee. These untaxed dollars can be used for any medical service that employees require, which helps them save money on their health care costs.
2. Freedom of Choice: It’s a known fact that most traditional health plans don’t cover all services for Canadians. These flexible health spending accounts, however, can be used to cover the co-pays and fees for just about any medical service — even those outside of a physician’s office. Many employees like this freedom to choose which kinds of services they can receive. Additionally, employers don’t have to worry about choosing a plan that covers as many services as possible, which could wind up costing them and their workers more in premiums.
3. Low Costs: HSAs are fairly low cost to administer. For most businesses, they only cost $199 to set up. Because employees aren’t paying premiums every paycheck, they can choose the amount they contribute in order to fit their budget and medical needs. Those cost savings make HSAs a favorite among employers and employees.
Have more questions about setting up health care spending accounts for your employees? Leave a comment below, and get in touch with a small business health benefits provider as soon as possible.