is the definition of a Private Health Services Plan (PHSP)?
The Canadian Income Tax Act allows businesses to reimburse
an employee for reasonable health care expenses which
are tax-deductible expense to the business and are
non-taxable benefits to the employee.
This is significant in that the employee does not pay
after-tax dollars for health care expenses. The employer
pays for the employee's health care expenses and deducts
this expense as an operating cost of the business AND
the employee receives this benefit without any tax burden.
expenses are deductible?
CCRA (Canada Customs Revenue Agency) allows
all expenses which normally qualify as health care
expenses under the proper provisions of the Income
Tax Act of Canada.
see our full list of eligible expenses
there any GST costs?
GST is payable
on the MedicalTAX inc. setup fee and administration fee
only. GST does not apply to the health
I have health
care expenses prior
to registering with MedicalTAX inc. can they be included?
care expenses incurred
prior to registering with MedicalTAX inc. are not deductible.
care expenses incurred
after the registration date with MedicalTAX inc. are deductible
for tax purposes by the employer and are a non-taxable
benefit to the employee.
if I have current health issues or am in poor health?
insurance based programs, with MedicalTAX inc. there are
no health qualifications. An employee can qualify for
MedicalTAX inc.'s Private Health Services Plan despite
the quality of his or her health and/or ongoing medical
individuals eligible for a tax credit for health
care expenses on
their personal tax return?
care expenses over
a certain threshold entitle you to a tax credit. The threshold
is determined by your net income. If your net income exceeds
$58,500, the first $1,755 is non-deductible in determining
your tax credit. Qualifying expenses will give rise to
a 16% federal tax credit.
John's net income is $50,000
Family expenditures on qualifying health
care expenses are
amount to $1,500 (50,000 x 3%)
Federal tax credit equals $80 (16% of $500)
MedicalTAX inc. Private Health Services Plan Example:
John's net income stays at $50,000
John receives from his employer $2,000 tax free dollars
John's employer has expenses for $2,160 (GST $11.20)
MedicalTAX inc. receives an administration fee of $160
an employee's dependents included?
spouse (or partner of 12 months or greater) and
dependent children will be included. A dependent child
of 18 years of age and less than 25 years of age must
be in full time attendance at a post-secondary institution
or on holiday from a qualifying school.
if the employee or her dependents have a current medical
Private Health Services Plan can be used as a complete
comprehensive medical plan or can be used as a top-up
plan to cover expenses that are not covered under a standard
health care plan.
are the annual and monthly premiums?
Private Health Services Plan has absolutely NO
annual or monthly premiums.
The employer pays an 8% administration fee upon usage
MedicalTAX inc. has received my claim, how soon can I
expect to receive my tax-free benefit payment?
is to have a reimbursement cheque sent to the employee
no later than 10 business days from the time MedicalTAX
inc. receives the claim and deposits the employer's cheque.
does a Private Health Services Plan compare to an Industry
insurance plan requires monthly premiums and a substantial
administrative cost to determine if coverage is going
to be done and what percentage of coverage the company
is prepared to cover, based on its rules.
Health Services Plan (set-up and administration) does
not have any premiums and is a pay-as-you-use system with
an 8% administration fee due to minimal overhead and administration.
We believe this is a far more cost-effective solution;
to pay a minor administrative fee rather than the ongoing
premiums that pay for ongoing commissions and substantial
a PHSP make economic sense?
The employer saves $$ if he was covering
health care costs and expenses 100% of the costs paid.
The employee gets one of the very few tax
free benefits allotted to him under the tax act.
Revenue Canada (CCRA) contributes to the health care
coverage for those that need and incur health care costs
under MedicalTAX inc.'s PHSP program. There are very
few opportunities to have a win/win situation
like this one in the tax act