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Flex Plans
In practice, a plan sponsor makes a decision to allocate a certain benefit annually (e.g., $1,000) to each employee's account. This amount could vary for different classes of employees. Nonetheless, each employee has a fixed amount of money that he or she is free to apply against personal choice health-related expenditures.
Typically, such HEALTH SPENDING ACCOUNTS are a means to access approximately 35 health-care services not available in a standard benefit plan, allowing the account holder to purchase those services not provided in the insured defined benefit or no longer part of a provincial government plan.
Service options on the flex side can range from cosmetic surgery, special vision care, MRI scans and orthodontics to wheelchair or wellness programs and even fertility treatments. The array of services, while impressive, must meet Revenue Canada's Guidelines for Health Spending Accounts (refer to Canada Revenue Agency (CRA) IT- 529 for details). Most providers make available an ATM-like bank card to further facilitate consumer choice and ease of payment for some of the HEALTH SPENDING ACCOUNT services.
Paper claims procedures are necessary for other eligible HEALTH SPENDING ACCOUNT services but administrative service agencies are employing new technologies to make this as seamless as possible.
Employers' deposits to individual HEALTH SPENDING ACCOUNTS are 100 per cent deductible. The employer will often want flexibility as to when deposits are made so they can be made monthly, quarterly, on a semi-annual basis or yearly. At the time of plan installation, the employer must determine whether the plan design will permit carry forwards so that the employee can use her unspent discretionary fund to top up the next calendar year's opening balance in her account. Where the HEALTH SPENDING ACCOUNT is set up for employee forfeiture (use it or lose it), the administrator will refund the unspent HEALTH SPENDING ACCOUNT dollars and monthly adjudication or administration fees. In most cases, the HEALTH SPENDING ACCOUNT deposits are not considered a taxable benefit to the employee, however, some provinces insist on co-ordination of benefits or some form of last-payer rules. Some HEALTH SPENDING ACCOUNTS have another kind of rollover feature whereby unclaimed expenses can be carried forward. However, CRA rules prohibit any single HEALTH SPENDING ACCOUNT plan of having both rollover features.
Employee benefit flex plans suit the desires of today's independently minded employees and their families while providing practical benefits to employers - a win-win situation for everyone. Flex Plans come in many various forms and are extremely flexible but it should be noted that these compliment a good health plan. It is important to protect from the big hit and cover off the incidental expenses utilizing such tools as a Health Spending Account. For more information and or advice please call Wise Financial Group Inc. toll free 1-877-779-4731 or email info@companybenefits.ca.