Risk & Business Magazine Gillons Insurance Summer 2019 Magazine - Page 27

HEALTH AND DENTAL EXPENSES Stop Paying For Your Health And Dental Expenses Out Of Pocket I f you or anyone you know has left an established business to start their own company, likely one of the largest issues is the loss of their health and dental benefits. Employee group plans that cover health and dental are extremely valued by employees. A study has shown that a majority of employees would rather retain their benefit program than receive an equitable raise in pay. This should not be a surprise to most. The peace of mind that the plan provides certainly gives a sense of security. That being said, there are definitely simple options to obtain coverage for your health and dental expenses for the new business owner and his/her employees. Many employers and employees are unnecessarily paying for these expenses out of pocket with after tax money because they are not able or willing to establish a group benefit program of their own. Health Spending Accounts are a great alternative to this without getting into a full employee benefit program. The product allows you to pay for 100 percent of eligible health and dental costs through the company using pre-tax dollars. Let’s use an example. Joe is the owner of a contracting business in Ontario and makes $80,000 per year. His daughter needs $7,000 dental braces and he has no coverage. As an employee of the corporation, Joe would have to pay himself approximately $10,000 to net $7,000 in after income tax money. Alternatively, if Joe used a Health Spending Account his business can fund the $7,000 (plus 10 percent administration fee and premium tax) pre-tax and he would save approximately $1,495. Further, this cost would qualify for a 100 percent tax deduction for his business. The Health Spending Account can be used for a wide variety of costs such as prescription drugs, dental, vision, massage therapy, physiotherapy, chiropractic, diabetic supplies and much more. It can also be used to top-up other group benefit programs. Costs of group plans are always a concern. A great advantage to the Health Spending Account is the owner sets the cap or maximum for each participant so it is very budget friendly. Once the cap it reached, the claimer cannot access any more funds. Further, you only pay for what you use. You will want to ensure that you qualify to operate a Health Spending Account by speaking with a qualified advisor and your accountant to ensure you are following the Canada Revenue Agency guidelines. If you are paying out of pocket right now for your health and dental expenses, you need to explore a Health Spending Account. It will provide great flexibility while empowering the end user to spend their health care dollars on what matters to them the most. + Chad Canfield is the Director of Financial services and leads the Life & Health sector for Gillons Insurance Brokers. Chad is a Chartered Insurance Professional and has a business degree from Mount Allison University. BY: CHAD CANFIELD DIRECTOR OF FINANCIAL SERVICES GILLONS INSURANCE BROKERS LTD. 27