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Experts Panel

Frequently Asked Questions

What Is An HSA?

A Health Spending Account is an alternative to traditional health insurance. Used by thousands of small business owners across Canada, an HSA is a special account established to exclusively pay for health care services for you and your family members.

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An HSA enables a small business to deduct 100% of their family health and dental expenses - without paying standard premiums typically associated with traditional health insurance plans.

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The ability to write-off health and dental expenses can create savings of more than 30% on medical and dental related expenses. For contractors, consultants, and other incorporated small business owners, this is an effective tool to cut your taxes and reduce your medical costs.

Do I Qualify?

You are an excellent candidate for an HSA if you own a business, have medical bills, and pay income tax.

How Will An HSA Save Me Money?

An HSA will save you money in three ways:

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  1. Tax savings from deducting 100% of your medical costs

  2. Reducing your costs by avoiding high premiums associated with traditional health insurance

  3. The elimination of expensive deductibles and co-payments.

Is An HSA Effective For An Owner/Operator/One Person Business?

Reasons a one person business uses an HSA

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This category of business includes incorporated consultants, contractors, and professional corporations. This segment of Canada's business community is overlooked by traditional health insurance carriers as it is difficult and expensive to insure. 

Interestingly, an HSA can be most effective for a one person business. The majority of GetHSA clients are owner/operator businesses. By using an HSA, you and your family would benefit from a 100% tax deduction for your family medical benefits.

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Here are some of the advantages an HSA provides for an owner/operator/one person business:

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  • Deduct 100% of your family's medical expenses

  • Reduce your personal taxes

  • Get comprehensive medical coverage for your expenses 

  • There are no premiums

  • Complement your spousal insurance

What Types Of Health And Dental Expenses Are Covered Under A Health Spending Account?

One of the great benefits of an HSA is the freedom it provides through the extensive range of eligible expenses.

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No restrictions on eligible expenses. You will love being able to claim 100% of your child's dental braces. These types of expenses, along with a thorough list of qualified medical practitioners, procedures, and medical devices help make a Health Spending Account an attractive choice for the small business owner.

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Unlike many traditional insurance plans, an HSA offers 100% coverage on a wide range of expenses...even the expensive ones. Does your son need physiotherapy?  Does your spouse need a new pair of glasses? Or maybe laser eye surgery?  Maybe you want to get an MRI? Rest assured, all of these are eligible expenses with a Health Spending Account.

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You can even claim your spouse's premiums if they are a member of a traditional insurance plan. That's right. Premiums contributed to a non-government insurance plan are an eligible expense with a Health Spending Account. How great is that?!  

Do you have unpaid portions that are not covered from your spouse's plan? Not a problem - the remaining amount of an expense is eligible with a Health Spending Account. Fantastic.

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Prescription drugs, massage therapy, and hearing aids are all eligible expenses too.  If you are traveling to the sun on your upcoming vacation...pick up a pair of prescriptions sunglasses so you can read on the beach (the sunglasses are eligible).  Sore feet from that long hike or fishing trip? Pay a visit to your friendly Podiatrist as all of their services are eligible expenses. 

Are My Dependents Covered?

Dependents are eligible with a few restrictions. 

How Does An HSA Compare To A Traditional Health Insurance Plan?

There are several advantage of a HSA compared to a traditional health insurance plan. Premiums, expense eligibility, coverage, ease of use, deductibles, and claims are some of the areas an HSA is considered more favorable. Understanding the difference between insurance and administration is critical when deciding on how to pay for your medical expenses.

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5 reasons an HSA is better than a traditional health insurance plan: 

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1. Premium Creep

Traditional Insurance Plan

  • Monthly premium for coverage, regardless of access or usage to the plan

  • Monthly premium rate often increased at the annual renewal of the policy (premium creep)

  • Age of the individual will affect the price of your plan

Health Spending Account

  • Avoid a premium creep due to usage or age factors

  • Most Health Spending Accounts have a fixed fee as opposed to a premium

  • Pay for the expenses you incur, eliminating a situation where you have paid into a program that you did not use. 

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2. Eligible Expenses and Pre-existing Conditions

Traditional Insurance Plan

  • Eligible medical expenses are restricted

  • Items that you wish to claim under this policy may be restricted by an annual or life-time maximum, or require special authorization in order to obtain eligibility.

  • At the time of enrollment, medical history will be requested and pre-existing conditions may be excluded or reduced from coverage.

Health Spending Account

  • Expenses are not restricted by type of expense, only on the dollar amount

  • You will have access to a wider range of eligible expenses

  • An HSA will not restrict or limit benefits due to a pre-existing medical condition

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3. Complexity

Traditional Insurance Plan

  • Under a fully insured program, you will receive a plan booklet outlining the items that are covered, and also the ones restricted or excluded by definition, co-insurance, deductibles, or fee guides. Figuring out your coverage and if it will be reimbursed partially or in full can get complicated.

Health Spending Account

  • An HSA is typically only restricted by dollar amount. You will have 100% coverage for all eligible expenses up to your spending account limit. Your account balance is updated by the administrator every time a claim is processed, eliminating the need to keep track of this information manually.

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4. Deductibles

Traditional Insurance Plan

  • Your benefits may be restricted by an annual single/family deductible

  • Benefits can be restricted by a co-insurance of 50%-80%

  • There is a limit for the number of visits and treatments.

Health Spending Account

  • No deductible

  • You are not restricted by co-insurance

  • No limits for the number of visits and treatments

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5. Claims

GetHSA has a digital claims platform which will process your claim within 24 hours versus many traditional insurance claims that can take more than 2 weeks to process.

Do I Qualify For An HSA Even Though I Have A Pre-Existing Condition?

Yes, you qualify. Pre-existing conditions do not affect your eligibility for an HSA.

How Does An HSA Claim Work?

  1. Pay for your medical expense (let’s say with your personal credit card). (Pay provider $1,000)

  2. Make an online claim (enter your expense details, submit the claim, make a payment from your corporation for the amount of your expense). (Pay the administrator $1,000 from your corporation)

  3. The administrator reimburses your personal banking account for the original expense ($1,000)

The payment from your corporation to the administrator is 100% tax deductible. The reimbursement you receive from the administrator is 100% tax free.

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