Exploring Healthcare Spending Accounts (HSA’s)

A Healthcare Spending Account (HSA) is an employee benefit that differs from the traditional fully insured plans that many of us are accustomed to. Generally speaking, the company (aka plan sponsor) would select an amount of coverage that would be offered to all employees, or all employees within a specific class (ie. Management, executives etc). The funds from the HSA can typically be used by the eligible employees for any type of medical or dental expense. In that sense, this type of plan provides complete flexibility and customization for the plan members. If an employee wishes to spend their full account value on laser eye surgery, for example, they can do that. The eligible expenses are determined by the Canada Revenue Agency and a list can be found on the CRA website. Most healthcare and dental related expenses are eligible, while cosmetic procedures are generally excluded. 

There are 2 common ways to set up a healthcare spending account:

  1. Stand Alone Plan – a HSA can be implemented as an alternative, or a replacement to a traditional, fully insured plan. In its simplest form, these accounts do not provide true insurance. Once the maximum annual limit is reached, no coverage would be available until the account is reset at start of the next plan year. This can present itself as a problem for large catastrophic medical expenses such as prescription drugs, or lengthy hospital stays for a covered plan member or dependent. However, many HSAs will also allow you to include fully insured benefits, including stop loss insurance (which can protect against large unforeseen medical expenses), as well as life insurance and long term disability coverage. 
  2. Supplementary Plan – HSAs can also be added on top of your existing employee benefits plan to enhance or customize coverage offered for all staff, or a specific group of employees. In doing so, employees can direct their HSA funds towards items that are either not covered, or not fully covered under your traditional benefits plan.  

As the leading providers of the Chambers of Commerce Group Insurance Plan, Norbram is pleased to announce that the Chambers Plan will be introducing their own HSA in the summer of 2017. HSA maximums will range between $100 and $5000 per person per year. Further customization will be possible with the availability of 3 carry over options. 1) No Carry Over 2) Funds Carry Over,or 3) Claims Carry Over. 

For more details about HSAs, or the new Chambers Plan options, please contact one of our brokers today.

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