Health & Dental Insurance Online

Now you can buy individual and family health and dental insurance directly online:

For Manulife FlexCare and FollowMe plans click HERE 

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For Sun Life PHI personal health plans click HERE

Poll

What type of coverage do you most need help with?
Life / Mortgage Insurance
23%
Disability Insurance
16%
Employee Health & Dental Benefits
25%
Critical Illness Insurance
19%
Personal Health Trust/PHSP
18%
Total votes: 266

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Sole-proprietors, your PHSP Year End is December 31, 2010; year end is the time to send in your 2010 claims.

The best time to make a claim is before the end of your Plan Year. This will ensure you maximize the value of your health and dental plan. Making a claim is fast and easy. If you need a claim form, feel free to call our office at

To get started, simply gather your medical receipts and start filling out your claim form!

Corporate PHSP holders, you have until your corporate year end to submit claims.

In celebration of small business week 2011, a great new article is up on the CBC's website about Private Health Services Plans, and excellent vehicle for business owners to deduct their medical and dental expenses:  http://www.cbc.ca/news/business/smallbusiness/story/2011/09/16/f-smallbiz-phsp.html.

I had the pleasure of being interviewed by CBC for the article, please let me know what you think!

Rachel

In the most recent federal budget, there was a small item that related to Health Trusts and Private Health Services Plans (PHSPs): No more cosmetic items or procedures can be claimed under these plans.

This includes: injectables like Botox and Restylane, cosmetic dermatology and dentistry, or plastic surgery such as rhinoplasty or breast augmentations.

Exceptions to this rule include items that are medically necessary. I would include a note from the prescribing phsyician explaining any questionable items with such a claim.

If in doubt about your claim, please feel free to call our office at 604.872.2866.

Here is the wording from the budget (taken from page 341 of the Canada's Economic Action Plan “Budget 2010”):

Medical Expense Tax Credit — Purely Cosmetic Procedures

The Medical Expense Tax Credit provides tax recognition for above-average medical and disability-related expenses incurred by individuals. For 2010, the Medical Expense Tax Credit reduces the federal tax of a claimant by 15 per cent of eligible unreimbursed medical expenses in excess of the lesser of $2,024 and three per cent of net income.

An expense is generally eligible to be claimed under the Medical Expense Tax Credit if it is directly related to a disability or a medical condition. An expense is not generally intended to be eligible if it is ordinarily incurred by persons without a disability or a medical condition or has a substantial element of personal consumption and choice.

To ensure consistency with the intent of the Medical Expense Tax Credit, Budget 2010 proposes that expenses incurred for purely cosmetic procedures (including related services and other expenses such as travel) be ineligible to be claimed under the Medical Expense Tax Credit. This generally includes surgical and non-surgical procedures purely aimed at enhancing one's appearance such as liposuction, hair replacement procedures, botulinum toxin injections, and teeth whitening.

A cosmetic procedure, including those identified above, will continue to qualify for the Medical Expense Tax Credit if it is required for medical or reconstructive purposes, such as surgery to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.

The proposed changes will make the tax treatment of purely cosmetic procedures consistent with that in other jurisdictions, such as the United States, the United Kingdom and Qu├ębec.

This measure will apply to expenses incurred after March 4, 2010.

After starting a successful business, every entrepreneur begins to wonder about whether they can now afford health and dental coverage. They may have given up employer benefits in order to pursue their dreams, but now they have a big dental appointment looming and they want them back.

There are several solutions designed specifically for the self-employed that are cost effective, tax deductible and straightforward to set up, including: individual health and dental plans, private health services plans (PHSP), and small business group insurance plans.

Individual Health Plans are purchased from an insurer to cover supplementary health and dental expenses such as prescriptions, cleanings, and specialists such as chiropractors and registered massage therapists.

The health and dental coverages are bundled into modular basic, mid-range or enhanced plan designs. Additional coverages can be purchased for items such vision care or travel insurance. Basic plans can usually be obtained without medical evidence, but be forewarned, the top tier coverage bundles generally require a medical questionnaire, and approval is not guaranteed.

These plans are great for sole-proprietors or businesses with one or two employees. There are also products specifically designed for people who have just left an employer plan, so make sure this option is explored within 60 days of leaving an employer group plan if applicable.

Premium costs are based on several factors such as the plan design, applicant’s age, and how many people will be covered under the policy. For those under age 45, expect to spend between $50 and $100 per month per person. The premiums may be eligible for deduction as a business expense.

A Private Health Services Plan (PHSP) is a plan set up between an employer and a trust company for the tax-free reimbursement of medical and dental expenses. It is not an insured plan, but allows an employer to provide benefits in a tax-effective manner under Section 248(1) of the Income Tax Act.

This is fast becoming one of the most popular methods for entrepreneurs to manage health costs. Any expenses that qualify for the Medical Tax Credit will qualify under a PHSP. This includes a wide variety of items that range from laser eye surgery, to medical equipment and orthodontics (Note: cosmetic medical or dental procedures are excluded from coverage).

 A PHSP can be set up for sole-proprietors or an incorporated company. Under current CRA guidelines, sole-proprietors have restrictions on the amount of claims that can be submitted through the plan each year. To set up a PHSP, expect to spend between $200 and $400 initially.  

Administration fees of 10% are charged on paid claims, and are the only ongoing cost, which makes them a great option for the budget conscious. All of the set-up and administrative fees, along with the paid claims, are deductible as business expenses.

Employee Benefit Plans allow small employers the opportunity to offer staff coverage at group rates. One of the biggest perks of group coverage is that the benefits are provided to employees without the need to disclose medical evidence or medical history.

Increasingly, benefits are being implemented to retain valued staff and lure key people away from larger businesses. Insurers have improved their offerings to allow small employers to provide customized plan designs.

Some of the most popular benefits include: life and disability insurance, health, dental and vision care, and employee wellness programs. Flexible health spending accounts, which operate like a bank account for health and dental costs, and critical illness insurance, which pays a tax-free lump sum benefit in the event of a covered condition such as cancer or heart attack, have recently become available for small employers.

A group plan is available for companies with two or more employees; however, feasibility increases when there are at least five. There is ongoing administration required in the form of updating the insurer of new hires, terminations, and changes in earnings, in addition to educating employees about the coverage. All eligible employees are expected to participate, and cannot pick and choose their coverage.

Costs for group benefits can range significantly and will be heavily dependent on the coverage design, employee demographics and employer’s industry. It definitely pays to have your advisor shop for the best rates from a variety of insurers. Each year, the plan will renew and the insurer will have an opportunity to adjust your rates based on plan utilization. This can mean that heavily used plans will result in rate increases for the group, so looking into a pooled plan arrangement may be beneficial.

Group plan premiums are deductible as business expenses, and the benefits can often be provided to employees on a tax-free basis.

Entrepreneurs who are interested in learning more about their health and dental coverage options should talk to an advisor who specializes in working with small business owners.
 

One of the most common questions surrounding setting up a Private Health Services Plan (PHSP) is: what type of income qualifies a person for a PHSP?

Employment income is a requirement. There must be an employer-employee relationship where an employee receives employment income from the business. Most simply, this means having T4'd income each year.

Link: What is a PHSP?

Shareholder Income

Another popular question surrounds the paying of dividends from a corporation. Dividend income accrues to shareholders not employees. Unfortunately, if a shareholder receives only dividend income and no T4 income, they do not qualify for PHSP coverage.

Company Directors

Every incorporated company has at least one director, and that director may or may not be a shareholder. A director's responsibility is to direct the operations of the company and for doing so may be considered an employee, and therefore be eligible for coverage under a PHSP. 

For example:

  1. The director and their accountant agree that a director can be considered an employee even though they receive only dividends. In this instance coverage could be put into place.
  2. The director and their accountant agree that the director should take a portion of compensation in employment income. In this instance, the amount of employment income should be in line with the expected medical expenses to be put through the PHSP. In this instance coverage could be put into place.

If you have questions about setting up a Private Health Services Plan to cover employees' health and dental expenses, please call our office at 604.872.2866.

Benefits Plans

True Benefits can help you find the best employee benefits plan.

We have access to over 25 insurers.

Clients Say:

"Rachel is professional, courteous and very knowledgeable while providing outstanding customer service. She is well prepared, delivers personal service, and understands our desire to provide the best possible benefit plan to our employees in the most cost effective manner."

Anne, HR Manager

"I appreciate having a person who is both local and accessible, and was impressed with the initial presentation outlining the options available to us. It is extremely helpful to have Rachel advocating on our behalf."

Sarah, Business Owner

"True Benefits has totally met our needs. Rachel gives personalized attention, and is very thorough. She has suggested many good ideas that we have used to benefit our employees."

Vicki, Controller

"I have referred many clients to Rachel in the past, and without exception, they have all commented to me on her professionalism, vast industry knowledge, great service, and fast response time."

 
Rowan

Thank you for everything that you have done for our family. We are grateful for all your hard work. We look forward to working with you again in the future.

Laurin

"True Benefits has an understanding and awareness of the importance of an effective benefits program. They're proactive in looking for cost effective improvements to plan design and cost containment strategies. My expectations were exceeded - Rachel delivered as promised in a timely manner."

Norrey, CFO

"Thank you Rachel. Great service as always. You anticipated our needs."

Pam, HR Director

I used True Benefits to sort through a tricky health insurance issue related to immigration status and an expired work permit.  Rachel recommended a cost effective solution and quickly verified the policy was the best choice for my situation.  My new health coverage was effective within 2 hours of my initial call to Rachel!  I highly recommend working with Rachel at True Benefits for cost effective solutions and friendly and efficient service.

Mike

Your attention to detail and willingness to never to never take "no" for an answer on my behalf left me in awe of your business ethics.

I will continue to use your services, based on your work ethic and my ability to trust that the policy you are suggesting is perfect for me.

Claire