Health Spending Accounts and Modernizing Benefits
What is a Health Spending Account?
A Health Spending Account (HSA) or Health Care Spending Account (HCSA) is a flexible, tax-efficient way for employers to support their employees’ health and dental needs. Offered as an additional feature to your Flex Plan with CEB Solutions or included if enrolled in Flex Plan 4 or 5, an HCSA provides a set amount of credits that employees can use to cover eligible medical expenses not fully paid by their standard benefits or provincial healthcare.
What if I'm not in Flex Plan 4 or 5?
Flex Plans 4 and 5 include an HSA. The maximum benefit for Flex 4 is $600/individual and $1200/family per Plan Year. The maximum benefit for Flex 5 is$1000/individual and $2000/family per Plan Year. Employers may increase the level of this funding if desired.
Participating education organizations in the Christian Education Health Plan may elect to provide an HCSA for their eligible employees. An elected HCSA is a non-taxable benefit funded by your employer. It acts like a personal health wallet, allowing you to pay for out-of-pocket medical and dental expenses. These accounts are typically useful for topping up coverage, paying deductibles or premiums, or covering services not included in your group benefits or provincial health plan. For example, if there is a balance left over after Manulife pays a health or dental claim, you may use your HCSA funds to pay the difference.
Plan members may also use their HCSA to cover expenses that exceed the maximum coverage provided by their benefits.
Healthcare Spending Accounts are designed to complement existing coverage; coordinating your benefits, overlapping coverage where needed, and utilizing an HCSA to ‘fill the gaps’
What Can I Use an HCSA For?
- Medical equipment and supplies
- Travel insurance expenses
- Dental care benefit increases
- Dental treatments
- Attendant care or care in a facility
- Prescription drugs
- Dependent health expenses
- Fertility-related procedures and treatments
- Mental health services
- Paramedical services (e.g, physiotherapy, massage therapy, etc.)
- Personalized therapy plans
- Laser eye surgery
- Etc.
To qualify, expenses must be:
- Medically necessary
- Not covered by provincial healthcare
- Not reimbursed by another plan
- Legal and compliant with CRA guidelines/Manulife definitions
You cannot claim:
- Rent (except the part of rent for services that help a person with daily tasks, such as laundry and housekeeping)
- Food
- Cleaning supplies
What is the Coverage Period for an HCSA?
An HCSA is funded at the start of each new Plan year (September 1). Expenses incurred from
September 1 – August 31 can be submitted to Manulife for reimbursement from your HCSA.
How HCSAs Coordinate with Other Coverage
HCSAs are designed to fill the gaps between provincial healthcare, employer-sponsored benefits, and spousal/partner plans. After submitting claims to your primary and secondary insurance, any remaining balance can be reimbursed through your HCSA.
Employer Considerations for Adding HCSAs
- Employers can include HCSAs in Flex Plans or offer them as an add-on. Here’s how it works with CEB Solutions:
- Flex Plan 4: Up to $600/single, $1200/family per Plan Year
- Flex Plan 5: Up to $1000/single, $2000/family per Plan Year.
- Employers may increase themes amount based on budget and staff needs
- Add an HCSA to Flex Plans 1, 2, and 3 based on budget and staff needs
- Contributions are fully tax-deductible, meaning the amount allocated to employees' HCSAs can be deducted from the company's taxable income.
Employee Considerations
- Your employer decides how much to deposit in your HCSA each year, unless you are enrolled in Flex 4 or 5.
- You as a Plan Member continue to submit health and dental claims under the HCSA until the balance is zero or no longer available for use (e.g due to termination of employment or retirement).
- The benefit percentage is 100% because the HCSA acts as a credit account
HCSAs are considered a ‘self-insured’ health plan and are an attractive and cost-effective way to provide additional benefits and care for your staff.
What Happens to Unused Credits?
If your HCSA has a remaining balance, you may use this in the next Plan year. This is called Credit
Carryover and it allows you to keep unused money for an extra year. Claims submitted in year 2 are
paid with the previous year’s funds first (if available).
If you are terminating employment, you have 90 days from your termination date to submit claims for reimbursement.
Maximizing Benefits
Why Add an HCSA?
HCSAs offer employees tax-free funds, personalized coverage, and flexibility for health spending and benefit usage. Employers can used HCSAs to enhance benefits without increasing premiums and employees become smarter healthcare consumers with more control over their spending.
*A Health Care Spending Account is elected by your employer unless you are enrolled in Flex 4 or 5. This elected amount must be the same for each class of employee.
