Private Health Services Plans are described in Canada Revenue Agency (CRA) Income Tax Bulletin IT-339R2[1] "Meaning of PHSP" for Health and Dental Care Expenses described in Income Tax Bulletin IT-519R2[2] "Medical Expenses".
In some Health Spending Accounts, the company makes advance payments (incl.
Health Spending Accounts are not available to unincorporated business owners without arms-length employees, as the Canada Revenue Agency would view such payments as a taxable transfer of funds, even if a third party is used as an intermediate step in the transfer of funds.
Health Spending Accounts provide substantial reductions in actuarial, administration, adjudication and marketing expenses compared to insured PHSP, by maximizing employee benefits and reducing employer cost.
Trustees, third party administrators and insurers provide versions of the HSA to Canadian employers.