A PHSP is a Canada Revenue Agency (CRA) approved plan that allows the medical expenses of employees to become a deductible business expense for the employer. This nationwide plan provides affordable medical coverage for the self-employed, and small business owners. Large corporations benefit from a low cost plans and employees are provided with an comprehensive list of eligible expenses. While incorporated businesses have no applicable limits, unincorporated business must adhere to the maximum limits set out in the Income Tax Act, Section 118.2(1).
Low Cost Non-Taxable Benefit
The PHSP is a low cost plan with no deductible, no monthly premiums, and no renewal charges. It allows the company to provide employees with a non-taxable medical benefit while allowing the company to fully tax deductible expense.
Deductible Business Expense
A PHSP is an effective way for a business to convert all health, medical and dental expense into a fully tax deductible business expense. This can result in significant savings for both a small business owner and the large corporation.
Combine with Other Health Plans
A PHSP can stand on its own, or can be used as an add-on to an existing plan. Employers determine coverage limits for each class of employee, and can individualize the plan as seen necessary. Expenses not covered by traditional insurance plans, can become eligible expenses using the PHSP.
The PHSP is your medical coverage; therefore it is your choice. Allowable expenses are listed in the Income Tax Act, Section 118.2(2) and include braces, Chinese medicine, crowns, insulin treatments, massage therapy, orthopedic shoes and much more.