What is a Health Spending Account?
Health Spending Accounts are group benefits that provide reimbursement for a range of healthcare-related expenses, over and above basic group benefits plan. HSAs are administered and facilitated as per the guidelines of Canada Revenue Agency.
How does a Health Spending Account works?
Health Spending Accounts (HSA) is just like special bank accounts. A certain amount is placed and allocated in each employee’s HSA. The employee can use the health savings account credit to settle and pay for medical and dental expenses that are not included in a regular group insurance plan.
The HSA program can be combined with the basic group plan or it can be offered to employees as a standalone health insurance program.
What are its advantages?
Advantages for the employer. Offering HSA to employees can be a very effective tool for managing costs. With Health Spending Accounts employers know in advance how much the entire benefit program will cost them because they get to decide the amount of credit to be allocated to every employee each year. Moreover, HSAs are tax deductible.
Advantages for the employee. Employees can use their HSAs to pay for any eligible health care expenses. They can use it according to their health care needs.
Who can have Health Spending Accounts?
The employees and their dependents as stated in the Income Tax Act of Canada.
What are the eligible medical expenses covered by HSAs?
Any service or item allowed under the Income Tax Act of Canada is considered as an eligible medical expense. Health Spending Accounts can be used to settle unpaid balances or costs not covered by other benefit plans such as government plans and group benefit plans.
These items and services include vision care (contact lenses, glasses, laser eye surgeries), prescription drugs (erectile dysfunction, fertility drugs), paramedical professionals or practitioners (optometrists, acupuncturists, psychologists).
What is the regular HSA amount?
HSA amounts are regularly credited to your account either monthly or annually as directed by your plan. To know about the exact credit amount, you will have to speak to your plan administrator.