PHSP Costs and Plan

The Cost

The costs are as manageable as the plan. One-time set-up fee plus applicable taxes. The additional cost is 10% administration fee on all claims submitted plus applicable taxes (only on the administration fee) depending on which province you live in. After set-up, most clients estimate what they will spend, fund the plan monthly or pay when a claim is submitted. And it’s easy to increase or decrease the contribution at any time to plan for lower or larger anticipated expenditures.

A PHSP is another expense added to the business ledger which means less taxes paid to CRA. Claims submitted within the fiscal year becomes a 100% tax-deduction for the business. Better yet, any funds not used remain in the Trust Account for future needs. There is no interest gained on the roll over of funds, however it is not lost like paying insurance premiums.

The Reality

Massive cuts to medical services by the Government are staggering. Here are just a few examples:
  • Eye examinations – no longer covered.
  • PSA blood tests for men – no longer covered.
  • Mammograms – covered only on a bi-yearly basis.
  • Physiotherapy, acupuncture, chiropractic and naturopath supplements – not allowed.

And if history holds, more cuts are likely on the horizon.

Clients toiling with these changes typically fall into one of two groups:

Group One – has a group benefits plan but is continually faced with cost increases and reduction of eligible benefits.

Group Two – doesn't have enough employees to obtain quality group coverage, yet they spend significant amounts of their after-tax money on health care related benefits without the ability to deduct these expenses.

The Plan

Simply put, a Private Health Services Plan (PHSP) is a legal document attached to a Trust Bank Account. The business benefits by receiving a 100% tax-deduction for claims submitted during the fiscal year and reimbursements is a non-taxable benefit to participants of the plan.

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