What is a Health Spending Account (HSA)

Health Spending Account is a Special Account (similar to a Savings Account) set up by the employer and managed by an Administrator to reimburse eligible health and dental related expenses not covered under the provincial health plan or your employee benefit plan(s). Expenses are eligible for reimbursement if they qualify as a medical expense tax credit under ITA 519R2 (Medical Expense and Disability Tax Credits).

While existing Benefit Plans offer protection against the high cost of healthcare, there are still a number of ordinary healthcare expenses which may not be normally covered by the conventional Benefit Plan. When added up, this can contribute to a very significant amount. Health Spending Account is a supplement or an alternative solution to traditional health insurance.

A Health Spending Account is designed to comply with the requirements of Income Tax Act 339 (Private Health Services Plan) or Income Tax Act 85 R2(Health and Welfare Trust).

Contributions made by Employers are 100% tax deductible. On the part of the Employees, dollars spent using HSA are considered non-taxable income (excluding Provincial Income Tax for Quebec Residents).

An Administration Fee (percentage of deposit made) is paid by the Employer to the Administrator. Transaction Fee will be charged from the Account for claim transactions and applicable taxes vary per province.

1. Instead of restricting the reimbursable medical and dental services, HSA empowers the member to decide on the best personal healthcare appropriate for himself and his family. Any services defined in Income Tax Act 519R2 (Medical Expense and Disability Tax Credits) are considered eligible and are only limited by the availability of funds.
   
   
2. Any member of the family may be designated as a legitimate dependent without worrying about paying additional fees for premiums.
   
   
3. Unused funds can still be used in succeeding year.
   
   
4. Claims history becomes a valuable tool in adjusting the funding formula without the unnecessary fear of being penalized through unreasonable surge in premiums associated with traditional insurance plans.
   
   
5. Contributions are tax deductible for the year when they were contributed.

Only ESORSE can provide you with the all of the following benefits:

1. Real-time Adjudication. Members no longer need to pay up front for drugs and dental services that have already been paid for by their Employers. By presenting the cards to affiliated dentists and Pharmacies nationwide, members are now liberated from laborious task of filling out a claim form, submitting it and waiting for a reimbursement cheque.

2. Submit Reimbursement on-line. Reasonably simple form on the web eliminates the need for complicated data entry, time-consuming posting system and paper-based attachments. As the claims are electronically submitted, the system adjudicates in real-time, allowing the members to instantaneously determine their eligible treatments and allowable expenses.

3. Authorize Providers to electronically reimburse claims. Members can authorize Providers to electronically file the claims, on their behalf. This will eliminate the need to shell out cash in advance. Instead, members will only pay for copay or any ineligible expenses  which are not covered by their Plan Design.

4. 48-hr reimbursement guarantee. Waiting time is over! All claims will be processed and paid within 48 hours. By providing Bank Information and a voided cheque, payment can be deposited directly to the members’ bank accounts.

5. Enjoy all the privileges 2 days after successful registration. Health Benefit Cards will be delivered, together with User IDs and Password for the Secured Website, 2 days after successful registration. Deposited funds are made available and can be immediately used for eligible health-related expenses.

6. Earn Interest on Unspent HSA Funds. Aside from  substantial tax savings, Members will also earn monthly interest based on bank's annual savings rate. Earned interests are considered taxable benefits to employees.

Eligible medical expenses are defined as those expenses paid for care as described in IT 519 (Medical Expense and Disability Tax Credits) of the CCRA. Furthermore, over-the-counter drugs are eligible medical expenses as long as they are prescribed by a licensed medical practitioner and dispensed by a Pharmacist.

This is a partial list of eligible medical expenses. You are encouraged to view the CCRA website (IT 519R2) for a complete list of eligible medical expenses.  For a downloadable version, please click here.

For Frequently Asked Questions on Health Spending Accounts, click
here.