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.
Any Canadian business that is operating on a “for profit basis” is eligible. This includes sole proprietorships, partnerships and incorporated companies.
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.
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.
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.
Private Health Service Plans operate on three levels:
- PHSPs can top-up a spouces plan.
- 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.
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.
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.
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.
- Answer all questions on the claim form completely and accurately; missing information causes delays in processing and payment
- Complete all personal information – name, company name, plan number
- Make sure to contact us with any change in address
- 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
- 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
- Ensure you sign your claim form
- Be sure to submit your claim within 30 days of the termination of your coverage
- 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.