Health Spending Account
What is a Health Spending Account (HSA)?
A Health Spending Account (HSA) or Health Care Spending Account (HCSA) is an account that can be used to pay for medical and dental expenses that are not eligible under your current employee health benefits program. It can also be used when employees exceed the annual limits of your existing program.
What kind of expenses can be reimbursed through an HSA?
You can use the money in your HSA to pay for medical and dental expenses considered eligible under the Income Tax Act that are not reimbursed under your Extended Health and Dental Care plans nor by any government plan, nor by your spouse’s plan. An HSA covers a much broader range of expenses than a standard Extended Health and Dental Care plan. The following are examples of eligible expenses:
- Deductibles Portion of expenses not covered by group plans
- Paramedical practitioners
- Nursing home care/Home care
- Payments to a licensed, private hospital
- Many dental expenses
- Walkers and wheelchairs
- Laser eye surgery
How much can be reimbursed to employees through an HSA?
The employer elects to allocate a set amount to an employee’s “account” on either an annual or monthly basis. The employer only pays for claims actually reimbursed through the HSA, not the amount employees are allocated.
Which employees can use an HSA?
Any employees covered for Extended Health and/or Dental benefits through BCCA Employee Benefit Trust are eligible for an HSA. Employers may designate only a certain class of employees (such as Management) eligible for an HSA, which is acceptable as long as there is an equitable and clear definition of the eligible class. An HSA may not be available only to shareholder-employees. Employers with less than 5 employees do not qualify for an HSA.
How do employees submit claims?
A modified version of the existing Extended Health Care claims form will be made available for employees. Employees list their expenses as they normally would and indicate whether they would like amounts not reimbursed through the regular Extended Health Care benefit to be paid through the HSA. Receipts are attached and sent to the insurance carrier as usual.
Give us a call if you have further questions at 1-800-665-1077.