June 2014 Newsletter
Flex your benefits (HSA + WSA)
Flexibility isn’t just for your yoga instructor anymore – group benefits need to be flexible as well. Health and Wellness services are more diverse than ever and as they expand and change, you need a benefits solution that can keep up. A Benefits + Pension Survey of mostly Alberta organizations discovered that 63% of respondents indicate their benefits program includes elements of flexibility beyond a few optional benefits. And for good reason – these additional elements ensure that your employees are covered for a wider variety of claims, many of which traditional plans will not. This will not only guarantee that your employees are satisfied with their plan, but it may even attract new ones.
There are two main types of accounts:
Health Spending Accounts (HSA)
HSAs are self-insured Private Health Services benefits arranged by employers for employees. They can supplement an existing Health and Dental Group Benefits Plan or act on a stand alone basis.
The rules governing HSAs are set up by Revenue Canada and a listing of eligible expenses is described in their site at: http://www.cra-arc.gc.ca/tx/ndvdls/
The annual dollar allocation is specified upfront. Revenue Canada allows either the unused portion of the allocation to carry over for one year OR claims to carry over for one year.
HSAs can be set up by class of employees such as Executives or Management or Salaried Employees and each class can have their own annual dollar allocation.
HSAs are available through insurance carriers, Trustees and Third Party Administrators.
There is an administration fee added to the claim amount and GST is charged on the administration fee. These expenses are a 100% business deduction to the employer and tax free income to the employee.
Wellness (Lifestyle) Spending Accounts (WSA)
Wellness Accounts support the health of employees by providing reimbursement for wellness related activities such as:
Fitness Related Services: fitness memberships (gym, personal trainer, yoga classes, etc.), recreational memberships (golf, curling, skiing, etc.) and fitness equipment
Health Related Services: alternative health practitioners (Shiatsu therapy, reflexologist, etc.), wellness services (weight management, stress management, etc.) and maternity services
Green Living: transit passes, solar panels, high efficiency furnaces, etc.
Education and Personal Development: tuition fees, class fees, driver training, hobby and general interest classes, etc.
Work Life Balance: child care, day care and elder care
The WSA can be designed by the employer to suit the specific needs of their employees. WSAs are available through insurance carriers, Trustees and Third Party Administrators.
There is an administration fee added to the claim amount and GST is charged on the administration fee. These expenses are a 100% business deduction to the employer, but taxable income to the employee.