How does A Private Health Services Plan (PHSP) work?

PHSP was introduced as a cost efficient and tax effective means of providing health and dental benefits for small and medium sized businesses.

You pay your health and dental expenses as you normally would. Your business then pays Cost Efficient Benefit Plan (the plan administrator) a payment to cover the expenses, plus a 5% administration fee (both of which are tax deductible).

Cost Efficient Benefit Plan then provides you (the employee) with a tax-free reimbursement of the expense incurred and a statement to the employer.

The PHSP is an inexpensive way for incorporated employers and sole proprietors to provide tax free health and dental services for themselves and their dependents, their employees and their dependents. These services, available through Cost Efficient Benefit Plan, are 100% tax deductible to the corporation or the sole proprietor.

Cost Efficient Benefit Plan can help you tailor the right plan for you and your employees.

Alternative benefit plans normally do not provide the coverage desired or are simply not cost efficient. PHSP fills the gap. You never pay for coverage you do not use or need.

Here is an example of how the PHSP works:

You submit your heath or dental receipts, e.g. $1,000.00 to Cost Efficient Benefit Plan including a payment from the company of $1,000.00 plus 5% administration fee and 5% GST (on the administration fee only). This comes to $1,052.50.

Cost Efficient Benefit Plan then reimburses you (the employee) with a tax-free payment equal to the expense incurred and provides a receipt for your business.


SMALL BUSINESS APPLICATION

PHSP

IDEAL FOR SMALL AND MEDIUM SIZED BUSINESSES

Whether you spend a little or a lot on your health and dental care, your company must still pay a monthly premium on traditional health care plans.


CORPORATION ORIENTED

PHSP

DESIGNED FOR INCORPORATED EMPLOYERS

If you own a Corporation with a number of employees, Cost Plus can be added as a health spending account to your existing group plan to lower your monthly premiums on your group plan.


SOLE PROPRIETORSHIP INCLUDED

PHSP

INCLUDES SOLE PROPRIETORS

A Sole Proprietor is a type of business entity that is owned by one individual, where there is no legal distinction between the owner and the business. Typically there are no employees other than family members.

In this type of business the owner receives all of the profits and is responsible for all of the debts. The year-end profits of the business are combined with all other income that an individual might have and taxes are paid at the current personal tax rate.

To qualify to use the Private Health Services Plan, the business must generate the majority (i.e. more than 50%) of the individual's income.


Limitations apply for sole proprietors. Canada Revenue Agency's guidelines for Sole Proprietors click here.