CGL Financial

Health Spending Accounts

 Health Spending Accounts ... the best kept secret in the Act! 

Each day, more and more Canadians are becoming annoyed and frustrated when their health and dental needs are not covered by their provincial or private insurance plan.

One Size Doesn't Fit All

Traditional insurance plans are designed as "One-Size-Fits-All" - but as an individual you don't have the same healthcare needs as everyone else. Most plans cover you for dozens of services you don't require and leave you short or exposed on the ones you really need or want! "Why pay for someone else's glasses when you require extensive dental treatments?"

There must be a better way!

Now...there is! It is a little known fact that, in 1998, Finance Minister Paul Martin introduced the Health Trust. Designed specifically for the self-employed or owners of small businesses, the Health Trust is like a bank account for your healthcare spending. The Benecaid Plan, adhering to the rules of a Health Trust, offers every Canadian the Power of Choice. There are no maximums, deductibles, restrictions or exclusions. Traditional services, such as basic dental and vision care are available, but now you can extend that coverage to include Laser Tooth Whitening, or Laser Eye Surgery and much more!

Tax Deductible

If you are self-employed or own a small business, money deposited into a Benecaid Health Trust is recognized by Revenue Canada as a full business deduction. As well, the funds that are available are 100% tax free to the individual or his/her dependants.

In Sickness and in Health...

If you are fortunate enough to stay healthy throughout a Benecaid Plan Year and spend very little, your Health Trust deposits are not forfeited and lost. Instead, your unspent trust funds are carried forward for spending the following year.

Affordable Protection

For just pennies per day, you can also purchase sickness insurance that protects your Benecaid Plan against expensive and unexpected health and drug costs. This provides you with peace of mind, knowing that your Benecaid Health Trust deposits are protected from being depleted in the event of a major illness. In addition, if you or your family travel for work or vacation, you will save hundreds of dollars each year with Benecaid's Travel Protection Plan - our out of country travel insurance.


Each Benecaid customer will receive a Benecaid Health & Drug Card - providing convenient access to thousands of pharmacies and Healthcare Professionals across Canada and the United States.

What is a Health Spending Account?

A Health Spending Account (HSA) is a bank account set up by your company whose deposits are spent exclusively on healthcare expenses.

  • Converts healthcare expenses into 100% business deductions.
  • You determine the contribution amount.
  • You determine how to spend your benefit dollars.

An HSA is a uniquely designed bank account, established to pay for your family's healthcare costs. All deposits are recognized by Revenue Canada (CCRA) as 100% tax deductible for the year in which they are contributed - even if the money is not spent that year. If you are already spending the money, why not make it tax deductible?

Just like an RRSP, deposits made into a Health Spending Account (HSA) are tax deductible - lowering your taxable income. With the RRSP, however, the taxes are merely deferred to a future date. The HSA allows you to make a tax deductible deposit one day, and withdraw the money to pay for healthcare - tax free - the very next day!

Establishing a Health Spending Account

What if I don’t spend all the money in the HAS?

Unspent contributions from the first year are not lost — they carry forward for spending the second year. In some cases, you could build up thousands of unspent HSA dollars for your future healthcare needs.

What healthcare costs does an HSA cover?

All traditional healthcare costs, like dental, prescription drugs and vision care are eligible, but the HSA extends to cover the rest of your costs: family orthodontic, cosmetic and restorative dental, laser eye surgery, cosmetic surgery and even long term care costs for elderly dependents.

How much does it cost?

There may be a small “one time” initial setup fee to establish the HSA. Typically this fee ranges between $100.00 and $250.00 depending upon the size of the company and number of employees to be included. This fee is charged to cover initial setup and enrollment costs during the establishment of the plan. This setup fee is 100% tax deductible to the company.

You are given the freedom of choice as to how much you want to contribute to your HSA for yourself and\or other employees you wish to include in your plan. The administrator of the plan then charges an administration fee of 10% on the contributions made.

How often do contributions need to be made to the Health Savings Account?

In accordance with the rules of a "Health Trust", payments can be made on a monthly, quarterly, semi-annual or annual basis - whatever suits you best.

What if I have unexpected healthcare costs that exceed my annual contributions?

While the HSA is an effective health benefit plan for anticipated and budgeted healthcare spending, there may be instances where a major accident or illness could generate expenses that exceed the available funds. For this reason, optional Health & Drug insurance to meet the additional healthcare needs of the account holder can be made available.

How safe is my money?

As an example, Benecaid Health Benefits Solutions Inc. a Canadian financial services company that has assembled a team of accountants, lawyers and small business owners to design the Benecaid Plan in compliance with Revenue Canada's (CCRA) Income Tax Act has retained CIBC Mellon Global Securities Services Company to hold all assets. For additional protection, the funds are monitored by two independent trustees. Benecaid acts as the "Plan Administrator", guaranteeing your individual or group plan is seamless and headache free!

Doesn’t the Government cover me?

Although Canada has one of the world's best health care systems, it still only covers the most basic needs such as hospital or doctor visits. All dental, vision, paramedical and prescription drug requirements are not normally part of government plans, leaving you exposed and forced to pay out of pocket.

How is Benecaid different from other forms of Health Insurance?

With Traditional Healthcare Plans you pay a monthly premium (families usually pay $200-300 per month/ $2400-3600 per year) to be covered for something you may or may not use. If you stay healthy - you lose the value. If you get sick and claim more than 60% of what you paid in premiums - your premium will likely increase the following year - you just can't win.

The Benecaid Plan acts like a bank account for your healthcare. If you put a dollar in - you have a dollar to spend. Any unused funds at the end of one year automatically carry over for spending the next year - you just can't lose.

How does the Health Spending Account work?

Monthly contributions to the Health Spending Account (HSA) are held in trust until payment for healthcare treatments are required. You determine the amount to be contributed. Should you have funds still unspent at year end, it automatically carries forward for spending in the next year.

How do I access the Funds in my HSA?

Each person is issued a Benecaid HSA Card, recognized and accepted by Healthcare Professionals across Canada. If the professional is a member of Benecaid's HCP Network you can use this card in the same way you would a debit card or otherwise you can your still submit receipts to Benecaid for a full reimbursement.

What should I expect in annual increases?

With the Benecaid Plan - none.

The September 2002 of Consumer Reports Magazine indicates that, under a traditional insurance plan, you should expect annual price increases on average in excess of 25%. The beauty of Benecaid is that you set how much you want to spend each and every year. In future years only you can increase or decrease your spending by as much or as little as you like.

Are my dependents eligible?

The Government under the Income Tax Act recognizes a "dependant" of an individual for a particular taxation year only if all the following conditions are met:

  • The person is the child, grandchild, parent, grandparent, brother sister, uncle, aunt, niece or nephew of the individual or the individual's spouse.
  • The person is dependant on the individual for support at some time in the year.
  • The person is a resident of Canada at some time in the year. This residence requirement does not apply if the person is the child or grandchild of the individual or the individual's spouse.

Are there any restrictions or conditions?

Unlike traditional plans, there are no complicated rules regarding services, coverage or limitations. With a Health Spending Account there are no medical predeterminations or waiting periods - once enrolled you can spend your money wherever and whenever you like. We can even arrange your enrollment within one day.

What happens if an employee leaves the company?

All previously contributed dollars which have accumulated in that employees' HSA are still available for them to spend for an entire year - even if they start a new job. Benecaid makes it easy for employers to add or remove employees just by filing out a simple form.

What are the benefits for a small business owner?

  • No Company is too small to enjoy the benefits of The Benecaid Plan
  • No restrictions due to size or industry
  • Employers have complete control over contribution amounts
  • Each employee designs their own individual plan
  • No financial penalty for 100% utilization
  • The most innovative tool today for attracting, retaining, and motivating key employees

How do I keep track of my receipts?

Benecaid does that for you. We send detailed quarterly statements to both the company and all registered employees. At year end you will have four statements to take to your accountant for Income Tax filing purposes.

What is Covered by the Benecaid Plan

Your Health Trust can be used on ANY certified medical expense*.

Artificial Limbs
Athletic Therapy
Attendant Care
Birth Control Pills
Botox Treatments
Chinese Medicine
Contact Lenses
Cosmetic Surgery
Crowns & Bridgework
Dental Implants
Dental Treatments
Dental Whitening
Drugs (prescription)
Fertility Treatments
Hair Replacement
Laser Eye Surgery
Laser Hair Removal
Naturopathic Products
Nursing Homes/Senior Care
Optical Centres
Optician - Optometrist
Orthopaedic Shoes
Oxygen & Equipment
Registered Massage Therapy
Skin Care (Medical)
Therapy Equipment
Vein Removal

*Certified medical expenses are an expenses listed as acceptable in the Canadian Income Tax Act by the Canadian Customs and Revenue Agency. If you are unsure about whether a expense is allowable, please contact Benecaid and we will be happy to assist you.