Health Spending Account
A tax-efficient way for business owners to reimburse health and dental expenses through their corporation.
What Is a Health Spending Account (HSA)?
A Health Spending Account (HSA) — also called a Private Health Services Plan (PHSP) — is a CRA-approved arrangement that allows incorporated business owners to pay for personal health and dental expenses through their corporation, making them tax-deductible business expenses.
Instead of purchasing a traditional group health insurance plan, you set an annual dollar limit and reimburse eligible expenses as they arise.
How It Works
- You set an annual spending limit per employee (including yourself)
- Employees (or you as owner-employee) pay eligible health expenses out of pocket
- Receipts are submitted for reimbursement through the HSA administrator
- The corporation reimburses the expenses — which are deducted as a business expense
- The reimbursement is received by the employee tax-free
What Expenses Are Eligible?
Any expense eligible under CRA’s Medical Expense Tax Credit, including:
- Prescription drugs and medications
- Dental treatments
- Vision care (glasses, contacts, laser surgery)
- Paramedical services (physiotherapy, chiropractic, massage)
- Medical devices and equipment
- Psychological services
- Hospital expenses
Who Is It For?
- Incorporated business owners who want to run health costs through their corporation
- Small businesses who want flexibility over a fixed group plan premium
- Self-employed professionals (through a sole proprietor PHSP with restrictions)
Advantages Over Traditional Group Insurance
| Feature | Traditional Group Plan | Health Spending Account |
|---|---|---|
| Cost | Fixed monthly premium | Pay only what you use |
| Coverage | Defined by the plan | Any CRA-eligible expense |
| Flexibility | Limited by carrier | Set your own limit |
| Tax Treatment | Partially deductible | 100% deductible for corp |
The Business Owner’s “Tax Hack”
For Calgary sole proprietors and contractors, an HSA is one of the most powerful financial tools available. It allows you to pay for 100% of your family’s medical expenses through your business as a tax-deductible expense.
💡 The Business Owner's Secret
Turn personal medical bills into 100% tax-deductible business expenses. Here's how the math works for a typical $2,000 dental or vision bill.
Why it works
By using an HSA, you bypass the personal income tax you would normally pay before spending your money on healthcare. It effectively makes every medical visit “pre-tax.”
Maria can help you set up a Health Spending Account and explain how it integrates with other coverage options.
Why choose an independent broker in Calgary for Health Spending Account?
As an independent broker based in Calgary, Maria Chekmareva works for you—not the insurance companies. By comparing policies from over 15 top Canadian providers, we ensure you get the best Health Spending Account coverage tailored to your specific needs and budget, all at no extra cost to you.
Ready for a Health Spending Account Quote?
Maria offers free, no-obligation consultations to help you find the right coverage.