Term: Health Spending Account (HSA)

A self-insured private health services plan (PHSP) benefit that permits an employer to allocate funds exclusively for the purpose of health and/or dental care payments by employees residing in Canada. In some cases the employer makes advance payments including the cost of administration and taxes on behalf of employees. With other plans, payments are made on a “pay as you go” basis. The employee receives reimbursement from the account for eligible claims. Claims, administration fees and taxes are a 100% business deduction for the employer. An HSA can be used to supplement an insured private health services plan (PHSP) or to implement a standalone plan. Standalone plans are limited to the money you are willing to contribute towards them in terms of what you can claim.

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