The Health and Welfare Plan provides expanded medical and dental coverage to professionals, business owners, their families and certain employees.
When looking at a means for providing health and dental benefits for you, your family and employees, there is a major concern regarding the feasibility of costs and amounts of coverage. Group insurance can be expensive and not very comprehensive, leaving the employer with the issue of how to provide funding for these costs in a cost-effective manner.
One option open for incorporated professionals is to self-insure medical and dental expenses through a health and welfare plan (HAWP). These plans are administered by the corporation. Medical and dental expenses are paid by the employee and the receipt is remitted to the corporation. This results in a tax deductible expense to the corporation and is received as a tax-free benefit to the employee.
- How It Works
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These types of plans are ideal for corporations providing benefits to a small number of employees or when used to augment an existing benefits plan. They can also be used to fund some forms of insurance such as select critical illness and long-term care.
Advantages of the Health & Welfare Plan
- Contributions made to the HAWP are tax deductible to the company
- Out-of-pocket medical costs are turned into tax-deductible corporate expenses
- Reduced administration cost as the Plan is internally administered
- Flexibility in providing additional coverage for employees
- What Expenses Are Covered?
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Each year the Canada Revenue Agency (CRA) publishes an extensive list of procedures and treatments which are eligible for coverage by a HAWP. Many of the items covered are listed below.
- Acupuncture
- Ambulance
- Artificial Limbs
- Blood Tests
- Braces
- Chiropractor
- Contact Lenses
- Crowns
- Crutches
- Dental Treatments
- Dentures
- Dermatologist
- Drugs
- Eyeglasses
- Nursing
- Neurologist
- Obstetrician
- O.R. Costs
- Ophthalmologist
- Optician
- Organ Transplant
- Orthodontics
- Orthopedic Shoes
- Orthopedist
- Osteopath
- Oxygen
- Pediatrician
- Guide Dog
- Psychoanalyst
- Psychologist
- Psychotherapy
- Radium Therapy
- Massage Therapy
- Health Care Related Transportation
- Vaccines
- Vasectomy
- Viagra
- Vitamin B12
- Wheelchair
- X-Rays
- Hearing Aid & Batteries
- Critical Illness and Long Term Care Insurance
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For many businesses, the use of a Health and Welfare Plan (HAWP) can be instrumental in providing health benefits and planning for contingencies. The use of a HAWP to make the pure insurance portion of the Critical Illness (CI) premium deductible allows a company to provide these benefits on a more cost effective basis.
Contributions to a health & welfare trust, may be subject to Retail Sales and/or Premium Tax depending on your Province. Please contact your GBL representative for more information.
To learn more about this product, contact GBL or register as an advisor.
