– by Carol Cooper, CFP, CHS, CLU, CPCA –
Having flexible and affordable health and dental benefits can be a challenge for business owners. Traditional insured plans can be an option but aren’t a good fit for all. As more and more services are being de-listed from our provincial medical plan, the cost burden is shifting to the individual. Canada Revenue Agency regulations have changed over the years. An enormously beneficial but sometimes overlooked option for employee benefits can be found right in the tax act. Federal legislation allows business owners to tax-deduct 100% of all health and dental expenses using a Private Health Services Plan (PHSP).
A PHSP allows you to tax-deduct health and dental expenses incurred by you or your family, or your employees and their family members. Greater tax savings are realized using a PHSP versus claiming through the three percent medical tax credit. It works much the same way as an RRSP, the difference being rather than saving for retirement you are saving for healthcare expenditures. This plan can save business owners up to 40 percent on taxes for those expenses.
You may own a PHSP if you are a corporate business owner, partnership or sole proprietor. The plan can be tailored to a group of employees, such as management, administrative etc. in order to be affordable for your business. A PHSP plan allows maximum flexibility and accessibility for self-employed business owners.
What medical and dental can be claimed as a business expense?
• Chiropractor, Massage Therapy, Physiotherapy
• X-rays, MRIs, CAT Scans
• Prescription drugs
• Orthopaedic shoes and orthotics
• In-Vitro Fertilization and fertility treatments
• Basic preventative dental
• Crowns, Bridges and Dentures, and Root Canals
• Orthodontics
• Eye exams, optical wear, Laser Eye Surgery … and much more
How does it work? You prepay into the plan’s trustee account by making deposits monthly, quarterly or annually. You pay only for the expenses you incur, plus the adjudication fee of your PHSP provider. You will receive quarterly statements which indicate every dollar deposited. Every dollar deposited is fully tax deductible. The plan can be combined with other insurance services to meet your individual needs.
Peggy Cady, Past President of the Society of Graphic Designers of Canada, said “Cooper Financial has helped the Society of Graphic Designers of Canada provide extra value to members and affiliates. The PHSP program allows GDC business owners all across Canada to easily take advantage of this great tax benefit. I’ve found the plan easy to use and very beneficial to my own business.”
Learn more about PHSPs at www.cooperfinancial.ca or call 250.475.0557.
