The Canada Health Act of 1984 outlined the major tenets of the nationalized healthcare system the country currently uses. As a Canadian citizen, you likely won’t have to pay much at all (if anything) for co-pays because your car has likely been covered by the national plan. Standard insurance also covers the cost of surgery and other important services like psychotherapy and dental procedures.
Though Canadians are well covered by the national plan — which is partly funded through private companies — there are still some holes in the system. In fact, a good portion of Canadians receive additional insurance benefits from their employers. That’s why it’s a good idea for small businesses to invest in the best plans that provide the most extensive benefits to employees.
How a health spending account works
Studies show that nearly half of Canadian businesses are worried about just how covered their employees actually are. Though many organizations opt for traditional group insurance, more and more have begun investing in health spending accounts, or HSAs, to fill in the gaps with their employees’ coverage. A HSA covers a wide range of medical expenses not usually taken care of by regular nationalized care.
Imagine a Canadian small business employee visits a physician and has to pay out of pocket for a particular expense like prescription drugs. The employee will keep this receipt and submit it to an administrator, who determines that it is, in fact, legitimate, and that the expense falls within the range of benefits provided by the employer. Then, this expense is taken care of by the HSA, just like that.
HSAs can be good for business
One of the most obvious benefits to employees is that more coverage helps them put their mind at ease so they can focus more on work. This leads to more productivity in the actual workplace, which is good for both the employee and the employer. But additionally, small business owners who are eligible can get these medical and dental expense deducted from their gross business income. That means they play fewer taxes, all because of better employee benefit services.
Though it might seem like health insurance for small businesses is hard work, it really boils down to finding the best benefits to employees. Though 30 percent of Canadian health care expenses come from either out-of-pocket payments, insurance or private sources, a HSA can help to fill in those gaps. Read more here.