Private Health Services Plan (PHSP) in Canada
A Private Health Services Plan (PHSP) is a health and welfare trust that allows small and medium sized businesses like sole proprietors, contractors, tradesmen, self-employed, professional corporations, and also for traditional incorporated businesses to get health benefits for themselves as well as their employees while enjoying a substantial tax savings. This is a low cost alternative to insured plans.
PHSP is a CRA approved plan and makes use of Section 248(1) of the Income Tax Act. The main reason of PHSP is to help employers to provide a non-taxable benefit to employees while deducting these expenditures.
What’s in PHSP for you?
For small business owner, the company pays the health and dental expenses with pre-tax dollars, making a legitimate deduction. On the personal front, PHSP reimburses 100% health and dental costs on a tax-free basis.
How Does PHSP work?
You pay your health or dental expenses as you normally would. Your Business (the plan administrator) then makes payment to cover the expenses and also 10% as administrator fee (both of which are tax deductible). The employee is then provided a tax-free reimbursement of the expenses incurred.
CustomCare’s PHSP in 3 easy steps:
Private Health Services Plan (PHSP) Features:
No Medicals Required!
No Monthly Premium!
No Annual Fee!
Non Taxable to the Employee!
Tax Deductible to your Company!
What is covered in PHSP?
Private Health Services Plan offers:
100% of Prescriptions
100% Vision Care
100% Alternative medical services
And Many More
How are PHSPs Regulated?
PHSPs are regulated by Canada Revenue Agency (CRA) and were introduced in 1989 in their interpretation bulletin entitled IT-339R2. Today, Private Health Services Plan is one of the most popular forms of health spending accounts in Canada.
After the setting up of PHSP, personal healthcare, dental and vision costs paid with after-tax dollars are deposited to the trust. The reimbursement given is a non-taxable medical benefit. The contributions submitted to the trust is a fully tax deductible expense to the company.
In addition to being flexible, PHSP is an incredible alternative to group insurance. Business owners and executives find PHSP rewarding as their current benefits and covering medical costs are enhanced that were not the case with traditional insurance plans.
Comprehensive benefits of a PHSP provide an excellent retention incentive over Insured Plans. One can budget and forecast with accuracy as the costs do not change until it is increased or decreased.
Your existing Group insurance can either be replaced in portions or get supplemented by having a PHSP. Moreover, PHSP provides better cost and tax efficiency compared to other plans. Employer gets the control to set up different classes for employees without the presence of other benefits.
Life Guard Insurance offers one of the lowest costs PHSP in Canada. Why not enroll for a PHSP from Life Guard Insurance today?
For immediate customer service, please contact CustomCare directly.
Life Guard Insurance and CustomCare – your Private Health Services Plan (PHSP) team in Canada.