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.
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