PRIVATE HEALTH SERVICE PLANS
PRIVATE HEALTH SERVICE PLANS
Frequently Asked Questions
DO I NEED AN OUTSIDE PARTY TO ADMINISTER A PHSP?
No, CRA specifically states that for corporations, PHSPs may be operated without the involvement of a third-party administrator.
WHO IS ELIGIBLE TO PARTICIPATE IN THE PHSP?
Anyone who is an employee of the company. The Employer determines the level of participation (sets up Employee categories for participation and establishes respective annual amounts available for coverage).
WHAT IS THE MAXIMUM ANNUAL BENEFIT AMOUNT THAT CAN BE PROVIDED THROUGH A PHSP?
Reasonability is going to play a role in setting up the annual limit for coverage, so an employer must keep in mind the relative differences between various participating employee classes and their corresponding amounts. Each company will be slightly different, so it’s best to contact Qube Benefit Consulting to discuss particulars.
CAN THE ANNUAL LIMIT BE CHANGED?
Yes, the annual limit may be changed at any time in the future but will require official documentation of this amendment. Changes should not be made arbitrarily.
ARE AN EMPLOYEE’S FAMILY MEMBERS COVERED THROUGH THE PHSP?
Yes, all members of the eligible employee’s household are included for coverage.
WHAT KIND OF EXPENSES ARE COVERED UNDER A PHSP?
Anything that CRA deems eligible as a medical expense will be eligible through the PHSP Dental, Optical, Pharmaceutical, Paramedical (for example, physiotherapy, chiropractor,acupuncture). Cosmetic procedures (like teeth whitening, for example) would not be eligible.
CAN I HAVE INSURED COVERAGE THROUGH INSURANCE AND HAVE A PHSP?
Absolutely. You can pay premiums to an Insured Plan like Blue Cross for example, and use your PHSP as a ‘piggy bank’ to make up for any out-of- pocket medical expenses incurred. Furthermore, premiums to a medical insured plan are eligible for reimbursement through the PHSP as a medical expense.
SO, ONCE I SET UP A PHSP FOR MY COMPANY, WHAT HAPPENS WHEN AN EMPLOYEE GOES TO THE DRUG STORE AND PURCHASES PRESCRIPTION MEDS?
The employee will pay for their prescription, and then come back with an official receipt. Your company’s in-house administrator will ensure that the claim is eligible and then reimburse the employee for their prescription, tax-free. The company can claim a corporate deduction for this reimbursement amount as an operating expense.