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Health Benefit Plan (HBP)

Health Benefit Plan (HBP)

Tax Deductible health coverage designed for Business Owners or Incorporated Professionals, Dependents, and Employees

What is a Health Benefit Plan (HBP)?

For many small to mid-sized business owners, traditional health and dental benefit programs provided by insurers are too costly, and benefits often go unused. A Health Benefit Plan (HBP) offers incorporated professionals and business owners a reliable and economical way to provide expanded medical and dental coverage for themselves, their families, and certain employees.

An HBP is a self-administered benefit plan that can be tailored to the needs of the business and utilizes pre-tax dollars to pay for medical and dental expenses.

Are you a good candidate for a Health Benefit Plan?

  • Incorporated professionals who are looking for comprehensive health benefits without the expensive premiums.
  • Business owners who wish to increase benefits for valued employees as well as attract future employees to join the corporation.
  • Business owners who wish to replace traditional group insurance or cost plus arrangements with a flexible, self-administered plan tailored to the needs of the business.

Advantages of a Health Benefit Plan

  • Employees enjoy a tax-free benefit
  • Out-of-pocket medical costs are turned into tax deductible business expenses
  • No administration costs – the plan is internally administered
  • Flexible in plan design and coverage
  • Avoid traditional ongoing HSA cost-plus fees every time you make a claim
  • Can help businesses increase benefit offerings to remain competitive and attract employees
  • Can include employee’s spousal and dependent benefits

What’s Covered?

  • Dental, medical and vision expenses
  • Out of country expenses
  • Eligible medical expenses outlined by CRA including:

Acupuncture, ambulance, blood tests, braces, chiropractor, contact lenses, crowns, crutches, dental treatments, dentures, dermatologist, drugs, eyeglasses, hearing aid & batteries, hospital bills, insulin treatments, naturopath, nursing, neurologist, obstetrician, ophthalmologist, optician, oral surgery, organ transplant, orthodontics, orthopedic shoes, orthopedist, osteopath, oxygen, pediatrician, physician, physiotherapist, psychiatrist, psychologist, psychotherapy, radium therapy, massage therapy, sterilization, health care related transportation, vaccines, vasectomy, viagra, wheelchair, x-rays …and more.

How does the HBP work?

The covered plan member pays for the medical expenses in full, upfront, and submits the claim and receipts.

The corporation receives the claim form and issues a cheque for the approved expense to the HBP account.

The HBP account receives the corporation’s cheque and issues a cheque for the expense from the HBP account to the plan member (up to the maximum allowed by the Health Benefit Plan)

Setup Process

  • Step 1
    Complete a HBP Authorization Form

    Complete and submit the HBP Authorization Form to GBL and we will prepare the Health Benefit Plan documents.

  • Step 2
    Documents are Shipped

    The Health Benefit Plan documentation will be delivered to the location listed on the HBP authorization form.

  • Step 3
    Execution

    The client should sign the Health Benefit Plan documentation and establish the account at the bank of his or her choice.

  • Step 4
    Notification

    The client advises their employees of the benefits program and employees begin taking advantage of the plan.

Considerations

  • Reimbursement of medical claims under a Health Benefit Plan is an employee benefit, versus a shareholder benefit. All participants must be in receipt of T4 salary.
  • An employer’s contributions to the fund cannot exceed the amounts required in order to provide the benefits outlined in the agreement.
  • The Health Benefit Plan requires similar treatment for all members within a classification. For example, if your client’s company wishes to make the Health Benefit Plan available to managers, then all managers must be included.
  • Contributions may be subject to retail sales tax and/or provincial premium tax depending on the client’s province of business, including Ontario, Quebec, and Newfoundland & Labrador.
  • A reasonable benefit must be offered to at least one class of arm’s length employees when applicable.
  • Members should be provided with letters confirming that their benefits and their eligibility for Plan benefits are as a result of their employment with the company.
  • Health spending limits are for the current year and cannot be carried forward in the next calendar year.
  • Due to privacy laws there is a need for the client to designate an outside person who can administer the Health Benefit Plan. Otherwise, it is acceptable for them to appoint a person within the company who is not responsible for hiring or firing employees.

Frequently Asked Questions

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