Who is it for?
PHSPs will provide a tax saving to the self-employed individuals, small business owners and professionals with at least one employee. Those with no employees may qualify at reduced claim levels.
Any of the above who has a marginal tax rate of more than 17.7% in Ontario will receive a tax saving benefit from using the PHSP to claim medical expenses.
What does it do?
A PHSP may be used to claim expenses that would be deductible under the income tax act. Dental, Drugs, Eye exams, Laser Surgery, Orthodontics...the list goes on. Some insurance premiums qualify.
How does it work?
You only pay as you use it.
What does it Cost?
Setting up a plan requires a one time administration fee. After that, the only additional costs are the claim amount plus 10% administration plus taxes. There are no ongoing costs. It is a pay as you use plan. Employers may wish to set up reserves with the Trust company administering the plan
Is it better than buying an insurance plan?
A PHSP is designed to provide a method to deduct costs that have been incurred and is not an insurance contract. In many situations a PHSP will provide a complimentary benefit or an addition to an insurance plan.
