While Canadians do use a public health care system to get most of their health care, they also rely on the benefits that their employers will often provide for them. These group benefits for small businesses and large business alike offer a specific set of health services at a particular rate, and sadly, they may only cover so much for the people who depend on them.
However, there are other options for employers who want to provide benefits to employees but reduce the cost per employee and increase the quality and choice with that care. One such solution that employers can use is to choose a health spending account plan for their employees.
What is a health spending account?
Health spending accounts are individualized accounts that employees can place money into in order to pay for out of pocket costs later on. For the most part, the funds in an HSA can be applied to just about any service, whether it’s covered by a traditional group benefits plan or not. The money that goes into the account is taken from employee paycheques before taxes are taken out, which makes it extra affordable for employees and their families.
How are HSA plans administered?
As far as health insurance for small business owners goes, HSAs are some of the simplest plans to administer. They cost about $200 to set up, and the benefits providers will give business owners everything they need. When employees need access to funds, they pay out of pocket and are reimbursed later when they submit proof of their costs.
What are the advantages of these plans over other group benefits for small business?
HSA plans differ from traditional small business health benefits because they’re good for just about any service. They can cover anything from lap band surgery costs to mental health spending to other elective or necessary procedures. Additionally, they have major tax advantages for Canadians. Because the funds in HSAs are pre-taxed dollars, these plans can help lower Canadians’ tax bills. Employers also see significantly reduced costs in terms of cost per employee for health care.
Have more questions about HSA plans for small or medium sized businesses? Get in touch with a benefits provider to ask questions. You can also leave a comment below.