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Private Health Service Plan (PHSP)

A Private Health Service Plan (PHSP) is defined by Section 248 (1) of the Income Tax Act (ITA) and by Interpretation Bulletin No. IT-39R2. The Act allows a Private Health Service Plan to take a number of different forms, but the plan must include a contract of insurance as part of its definition.

A Private Health Service Plan is one of the most effective tax tools a self employed incorporated business person with a reasonable income can have. The tax savings is approximately 30% and if set up properly complimenting a quality health plan the results can be excellent. For advice please contact Wise Financial Group Inc. toll free 1-877-779-4731 or email info@companybenefits.ca. Below is in depth information.

»Services Offered

Some financial institutions have developed programs for which they will administer a Private Health Services Plan that a corporation has for its employees. Specifically, they are offering the following:

  1. 1. Financial institutions contracts with an employer for the purpose of indemnification of an employee’s health services as defined by the specific terms of the contract.
  2. 2. Eligible health services are defined by Paragraph 1 18.2 (2) of the Income Tax Act and limited to items elected by the employer.
  3. 3. Employers will be given the option of funding its obligations under the plan in advance, or funding the plan at the time that the employee submits health care receipts.
  4. 4. Financial institutions will reimburse employees for eligible receipts that have been submitted under the plan.
  5. 5. The financial institution provides a statement of expense to the employer for all claims.
  6. 6. The financial institution charges an administration fee to the employer for this service.

»List of Eligible Expenditures

Premiums For Health Care Plans

Premiums paid to any non-government medical or hospital care plan. eg. Blue Cross, etc.

Professional Services

Any services performed by a qualified medical practitioner including but not limited to the following:

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  • Acupuncturist
  • All Optical Services
  • Chiropodist
  • Chiropractor
  • Christian Science Practitioner
  • Dental Mechanic
  • Dentist
  • Dermatologist
  • Gynecologist
  • Massage Therapy
  • Naturopath
  • Neurologist
  • Obstetrician
  • Oculist
  • Ophthalmologist
  • Optician
  • Optometrist
  • Orthodontist
  • Orthopedist
  • Osteopath
  • Pediatrician
  • Physician
  • Physiotherapist
  • Plastic Surgeon
  • Podiatrist
  • Practical Nurse (for medical services)
  • Psychiatrist
  • Psychoanalyst
  • Psychologist (if licensed)
  • Registered Nurse
  • Speech Therapist (if treated for Pathological or audio logical)
  • Surgeon
  • Therapist

Note: A qualified medical practitioner means a person who is authorized to practice in accordance to the laws of the province and certified according to the practitioner’s governing body.

All Dental Services

  • Dental X-rays
  • Denture Repair & Replacement Examinations
  • Extracting Teeth
  • Filling Teeth
  • Gum Treatment
  • Oral Surgery (e.g. root canal)
  • Straightening Teeth (e.g. braces)

Laboratory Examinations and Tests

  • Blood Tests
  • Cardiographs
  • Metabolism Tests
  • Spinal Fluid Tests
  • Stool Examination
  • Urine Analyses
  • X-ray Examination

Prescribed Medical Treatments

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  • Blood Transfusion
  • Bone Marrow or Organ Transplant
  • Insulin Treatments
  • Diathermy
  • Electric Shock Treatments
  • Healing Services
  • Hydrotherapy
  • Injections
  • Nursing (by Registered Nurse)
  • Pre-Natal, Post Natal Treatments
  • Psychotherapy
  • Radium Therapy
  • Speech Pathology or Audiology
  • Ultra-violet Ray Treatments
  • Whirlpool Baths
  • X-ray Treatments

Hospital Services

  • Anesthetist
  • Hospital Bills
  • Oxygen Masks, Tent
  • Use of Operating Room Vaccines
  • X-ray Technician

Medicines

  • Any non-prescription medicines (over the counter), prescribed by a qualified medical practitioner and recorded by a licensed pharmacist
  • All Prescription Drugs
  • Insulin or Substitutes Liver Extract – injectable for pernicious anemia Oxygen Tapes or Tablets – for sugar content tests by diabetics, if prescribed Vitamin B12 – for pernicious anemia

Materials And Apparatus Which Are Prescribed By A Recognized Medical Practioner

  • An external breast prosthesis
  • Any device designed to assist walking where the individual has a mobility impairment
  • Contact lenses
  • Devices designed to assist a person to use bathtubs, showers or toilets
  • Devices designed to enable individuals with a mobility impairments to operate a vehicle
  • Devices used by individuals suffering from a chromic respiratory ailment or a severe chronic immune system disregulation
  • Electronic or computerized environmental control systems for individuals with severe and prolonged mobility restrictions
  • Electronic speech synthesizers for must individuals
  • Equipment that enable deaf or mute persons to make and receive telephone calls including visual ringing indicators, acoustic coupler, teletypewriter, which makes telephone communication possible with other persons.
  • Extremity pumps or elastic support hose to reduce lymph edema swelling
  • Eye Glasses Heart monitors or pace makers
  • Hospital bed, if required in home Inductive coupling osteogenesis stimulator Infusion pumps for diabetes including peripherals
  • Monitors attached to babies identified as being prone to sudden infant death syndrome
  • Optical scanners or similar devices for a blind individual to enable him to read print Orthopedic shoes or boots Oxygen tent
  • Power-operated guided chair installation for stairways.
  • Power-operated lifts and transportation equipment designed to allow access to buildings, vehicles or to allow wheelchair access to a vehicle Synthetic speech systems, Braille printers and large print-onscreen devices that enable blind persons to utilize computers
  • Syringes Television closed captioned decoders Wigs if required as a result of disease, accident or medical treatment

Other Materials And Apparatus Which Don't Require A Prescription

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  • Any apparatus or material, paid to a doctor, dentist, nurse or hospital
  • Any device to aid the hearing of a deaf person including bone conduction telephone receivers, extra-loud audible signals and devices to permit volume adjustment of telephone equipment above normal levels
  • Artificial eye
  • Artificial kidney machine, including installation, operating costs
  • Artificial limb
  • Blood sugar level measuring devices for diabetics
  • Brace for a limb Catheters, catheter trays, tubing, diapers, disposable briefs required by incontinent persons
  • Colostomy pads
  • Crutches
  • Hernia truss
  • Ileostomy pads
  • Iron lung
  • Laryngeal speaking aid
  • Rocking bed for polio victim
  • Spinal Brace
  • Wheelchair

Other Expenditures

  • Ambulance charges
  • Home Maker Service and Home Care (attendant must be a non-relative)
  • Prescription birth control pills
  • Reasonable costs for adapting a residence to accommodate a disabled person (e.g. wheelchair ramp, lifts, bath facilities.)
  • Rehabilitative therapy, lip reading and sign language training
  • Specially trained animals to assist blind, deaf, or severely impaired persons, including the cost of its care and maintenance
  • Transportation costs – to hospital, clinic or doctor’s office to obtain services not otherwise available
  • Transportation, meals and accommodation. (Reasonable expenses for meals, accommodation and travel costs for a patient and an accompanying attendant may be deductible if: 1. equivalent medical services are not available locally; 2. the route traveled is reasonably direct; 3. medical treatment is reasonable and distance travel is at least 80 kilometers.)

»Expenditures Not Covered Under This Plan

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  • Acupuncture treatments if they are not performed by a licensed physician
  • Air conditioners, humidifiers, dehumidifiers or air cleaners
  • Antiseptic diaper service
  • Health programs offered by resort hotels, health clubs
  • Illegal operations, treatment or drugs Maternity clothes
  • Medical expenses for which you are reimbursed or are entitled to be reimbursed from other plans
  • (Non-prescription) birth control devices
  • Payments to a municipality where the municipality employed a doctor to provide medical services to the residents of the municipality.
  • Scales for weighing food
  • Special foods or beverages are not a deductible expense for tax purposes. However, if said food or beverages are taken to alleviate or treat an illness and not nutritional, they may be allowed. Such claims must be accompanied by a letter from a medical doctor.
  • Toothpaste
  • Wigs – unless made to order for individuals who have suffered abnormal hair loss owing to disease, medical treatment or accident

IMPORTANT – Provincial Health care Premiums ARE NOT eligible expenditures.

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