What is a Private Health Service Plan?

A Private Health Service Plan is a Canada Revenue Agency approved vehicle which allows eligible Canadian businesses to fully deduct costs relating to health, dental and medical expenses.

Who is eligible for a PHSP?

Any Canadian business that is operating on a “for profit basis” is eligible. This includes sole proprietorships, partnerships and incorporated companies.

What kinds of costs are eligible for coverage by a PHSP?

There is a defined list of eligible items that is supported by federal guidelines. The list is comprehensive and inclusive of most personal expenses relating to health, medical and dental procedures, equipment and services.

Why use a PHSP?

The personal deduction only allows for expenses that exceed 3% of your reported income. These excess expenses are eligible for an “input” credit against your provincial taxes. Private Health Service Plans allow for the deduction of “first” dollar expenses and are deducted from gross revenues, much like an RRSP contribution.

How much money can one save using a PHSP?

Savings are dependent on an individual’s income level and the resulting marginal tax rate. Without a PHSP or benefits plan, one is limited to a tax credit according to one’s individual tax bracket.

I already have insurance for dental and extended medical, why do I need a PHSP?

Private Health Service Plans operate on three levels:

  1. PHSPs can top-up a spouces plan.
  2. PHSPs can cover the portion of expenses not covered by a personal group program. This means deductible amounts, co-insurance payments and ineligible expenses, like laser eye surgery.
What does a PHSP cost?

PHSP enrolment involves a one-time start-up fee of $200 plus HST. There are no charges against your contributions/premiums, however a fully tax-deductible 10% fee is charged to adjudicate each individual claim. Example: a claim for eyeglasses in the sum of $300 will incur an adjudication of $30 against the account.

Why does a PHSP involve set-up?

Canada Revenue Agency guidelines are specific to the structure and operation of PHSP programs. This service adheres to federal rules and regulations and is delivered through an arm’s length, third-party administrator in the business of offering such services. Pacific First has been offering administrative and insurance products to Canadians since 1978.

How much can be contributed into a PHSP per year?

This total will depend on whether the business is incorporated or a sole proprietorship.

Sole proprietors can contribute $1,500 personally, $1,500 spousal, and $750 per dependent child (limits for dependent children over 18 are increased to $1,500).

Corporations have no annual limits imposed; however, guidelines ask that where there are employees within the structure equivalent must be extended to these individuals.

How do I obtain a claims form?

Claims forms are available on the foms section of this website. Alternately, you may contact our office and we can mail, fax or e-mail a form to you. You may also contact your employer’s human resources department.

What can I do to ensure my claims are paid quickly?
  1. Answer all questions on the claim form completely and accurately; missing information causes delays in processing and payment
  2. Complete all personal information – name, company name, plan number
  3. Make sure to contact us with any change in address
  4. Include all original receipts unless we are topping up for another carrier. In that case, include copies of your receipts and the original report from your alternate carrier
  5. Ensure your receipts include:
    • patient’s name
    • date of service
    • nature of service (ex. massage therapy, physiotherapy)
    • name of provider, including their credentials and/or registration number
    • cash register tapes are not acceptable
  6. Ensure you sign your claim form
  7. Be sure to submit your claim within 30 days of the termination of your coverage
  8. For tracking purposes, please keep copies of your claims and take note of the day they were submitted

For any additional questions regarding coverage or claims, please feel free to contact us at your earliest convenience.

How will my privacy be protected?

Pacific First uses encrypted software and adheres to Canadian Privacy Legislation to provide clients a maximum level of security. Please see our Privacy Policy and Terms of Use sections for more information.

Start typing and press Enter to search