A Private Health Services Plan (PHSP) is set up between a business or self-employed person and a trust company for the tax-free reimbursement of medical and dental expenses. Instead of paying with personal after-tax dollars, business owners and their families can now cover their medical costs as a deductible business expense.
This is quickly becoming one of the most popular methods for entrepreneurs to manage health claims. Any expenses that qualify for the CRA’s Medical Tax Credit will qualify under a PHSP. This includes a wide variety of items including laser eye surgery, medical equipment, prescription drugs, specialists such as registered massage therapists, and dental work including everything from check-ups to orthodontics.
To set up a PHSP, expect to spend between $200 and $400 initially. After that, the only ongoing cost is an administration fee of 10% on paid claims. All of the set-up and administrative fees, along with the paid claims, are deductible as business expenses.
This article is provided by Rachel von Sturmer of True Benefits Financial. www.truebenefits.ca; rachel@truebenefits.ca; Tel: 604-872-2866.
