Why would I want a Private Health Services Plan?
As a Business Owner, you would set up a Private Health Services Plan primarily to cover health expenses for your most valuable employee - you (and your family)! You or your spouse must be a bona fide employee of your business. Incorporated business owners enjoy the greatest tax advantage from having a PHSP but unincorporated proprietorships can also benefit from having one.
As an Employer, you will want to extend your PHSP to reward and retain valued employees in the form of a Health Spending Account. In fact, your plan must be offered to all employees. The total annual cost, including our admin fee and GST, is a 100% deductible business expense. And you control that annual cost by specifying the annual benefit amount per employee in advance by establishing various classes of coverage.
As an Employee, you are allotted a maximum dollar amount in your Health Spending Account by your employer to use as you please every year to cover health expenses in place of (or in addition to) any traditional premium-based health insurance you or your spouse may have. When you pay personally for a health service, make sure you get a detailed receipt - not just a credit card slip. Within 5 days of us receiving your claim a reimbursement payment will be on its way to you, repaying you 100% of your personal health expense. And this benefit from your employer is 100% tax-free!
Note: All covered employees must be listed on Appendix A: Eligible Employees.