In 1986, the Canada Revenue Agency introduced an interpretation bulletin entitled IT-85R2 - Health & Welfare Trusts for Employees.
Three years later in 1989, after pressure from non-incorporated entities, Canada Revenue Agency released another bulletin, IT-339R2 (Meaning of Private Health Services Plan), providing details on the concept of a Private Health Services Plan or PHSP for non-incorporated businesses in Canada.
The Canada Revenue Agency, in the annual Guides it publishes for those reporting self-employment income from a business or a profession,[2] or from farming,[3] provides instructions for deducting Private Health Services Plan premiums.
Canada Revenue Agency released another bulletin in 1998 indicating that the funds could revert to the employer but ONLY in the case of a notional credit program tied to a flex benefits or cafeteria style plan.
Several HSA Providers also offer Health Spending Accounts as stand-alone benefit solutions with carry-forward of deposited funds or incurred expenses - but not both - for a period of 12 months.
Examples of expenses that are non-eligible include the following: • liposuction; • hair replacement procedures; • botulinum injections; and • teeth whitening.
An expense, including those identified above, will continue to qualify if it is necessary for medical or reconstructive purposes, such as surgery to address a deformity related to a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.
If the distance traveled is in excess of 80 km, the eligible costs would include meals and accommodation, in addition to transportation expenses.
The employee can submit medical claims for him/herself and any of his/her dependents that are defined as: For years, PHSPs have been a part of Canadian group health and dental plans.
There are numerous specialized providers of Health Spending Accounts (Self-insured PHSPs) in the form of pre-paid or notional credit programs.