This benefit will give employees a more flexible way to handle health care expenses. 

How does an HCSA work?

There are many different types of HCSA’s and it’s really up to you to decide which product offering suits your employees the best. The important thing to know is that HCSA’s are governed by Canada Revenue Agency taxation rules. Generally speaking, there would be an HCSA account set up for each of your employees on an annual basis and a set amount of funds (credits) would be allocated to each person. The HCSA acts similar to a gift card that one would receive for a large department store; this “gift card” also needs to have an expiry date according to CRA. HCSA’s are employer funded only and are typically a well-received benefit to add to your total compensation package.

How does an HCSA affect the core plan?

There is no direct affect to the core benefits plan when an HCSA is implemented as all expenses must first go through the core plan before they are eligible to be claimed on the HCSA. The HCSA is truly meant to be a backup account where employees can claim expenses either not covered under the core plan or expenses above and beyond what the core plan covers; therefore minimizing the employee’s out of pocket medical expenses. Even employee paid extended health & dental care premiums are eligible expenses for an HCSA.