Are you a small business owner who is troubled by the fact that the health premiums keep going up and the health benefits keep going down? Registered Health Spending Accounts solve this problem for small businesses in Canada by offering an alternative to traditional health insurance.
A health spending account (HSA) is the best option for small business owners to pay employees' medical expenses on a tax-free basis. Business owners who provide HSAs to employees can benefit in three ways.
- Reduce taxable income by deducting eligible medical expenses from gross income
- Cut down on costs by avoiding high health insurance premiums
- Eliminate deductible and co-payments
This makes the HSA one of the most cost-effective ways to provide health benefits to employees. But what medical expenses are eligible? You should continue reading this article to find out.
The costs of most medications that are prescribed by a licenced doctor are deductible. These include tablets, insulin, and medication patches. In addition, the cost of syringes and needles if prescribed by the doctor is deductible.
2. Full-Time Attendant Care
Attendant care costs are also a deductible expense. The remuneration paid to a full-time attendant to care for a patient with severe physical and mental impairment can be deducted. Also, the money paid for full-time care in a nursing clinic is an eligible medical expense under an HSA.
3. In-patient or Outpatient Treatment
The cost of inpatient treatment is also deductible. Any payments for care at a licensed private hospital or clinic is deductible. However, a qualified healthcare practitioner must certify that the stay at the hospital was necessary for treatment of a condition. In addition, any costs for inpatient treatment prescribed by a licensed practitioner is deductible.
4. Medical Supplies
The cost of medical devices such as prosthetics, artificial eyes, crutches, hearing aids, chest respirators, and others are also deductible expenses under an HSA. Any equipment purchases for managing or treating a disorder can be deducted.
5. Diagnostic Costs
Businesses can also deduct medical costs for diagnosis of an employee. These costs include X-rays, radiological lab tests, MRIs, and others. Any test that is carried out for preventing diseases or maintaining health that is prescribed by a registered practitioner can be deducted under the HSA.
Business owners who select an HSA don't have to pay standard premiums associated with traditional health insurance. They can write off medical expenses that can result in great cost savings. This is an effective option for consultants, contractors, and other small business owners to cut down on taxes.