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Insuring your health

March 24, 2015

Here’s some clarity on workplace benefits

From vision and dental care to other eligible medical expenses, if you have a flexible benefits plan at work, here’s what you need to know.

It’s difficult for a one-size-fits-all benefits plan to meet the needs of today’s diverse, multigenerational workforce. That’s why many employers are introducing flexible benefits programs that feature health spending accounts (HSAs) to give employees more choice.

What are flex plans?

There are three main types of flexible benefits plans:

  1. Modular plans. These allow you to spend flex dollars (called “credits”) assigned by your employer on one of several (usually three) plan designs and price tags. You can allocate any unused credits to an HSA or take them in taxable cash, which you can use for other purposes, such as topping up group RRSP contributions.
  2. Core-plus plans. These provide a compulsory level of coverage for key benefits such as life, disability and supplemental health insurance. You can purchase additional coverage at a subsidized cost.
  3. Cafeteria plans. These have the most flexibility and are generally offered only by very large employers. Your employer assigns you a number of flex credits to use for buying the coverage you require from a broad menu, and you may allocate any unused credits to your HSA or take them in taxable cash.

How does an HSA work?

An HSA reimburses you for eligible health care expenses, up to the maximum credits available in your HSA. Employers can offer HSAs on a stand-alone basis (except to members living in Quebec), in addition to a traditional benefits program or as part of a flexible benefits plan.

To maximize the HSA credits available to you, it is recommended that you submit your claim first to the administrator of your own workplace medical/dental plan and then (if applicable) to your spouse’s plan. Finally, you can submit any unpaid portion of the claim (if eligible) to your HSA for payment.

Your employer can generally design an HSA in one of two ways:

  • HSA credit balances remaining at the end of the plan year can roll over for one 12-month period, or
  • Eligible expenses can be reimbursed in the plan year in which you incurred them or up to 12 months after the end of that plan year.

What expenses does an HSA cover?

An expense is eligible for reimbursement under an HSA if it is a medical, hospital or dental cost not covered by provincial health insurance or under any other employer-sponsored health plan. This includes a vast array of items, such as:

  • Premiums you paid for private health services plans, such as health and dental benefits
  • Services of professionals such as chiropractors, optometrists or dentists
  • The cost of facilities and services such as drug or alcohol addiction clinics
  • Nursing home care
  • Medical devices such as walkers and hospital beds for home use
  • Blood-sugar measuring devices for diabetics
  • Costs in excess of plan limits for items such as eyeglasses or braces

An HSA can reimburse you for your dependants’ expenses as well as your own. The definition of dependant can be broader than the traditional spouse and dependent children, and can include other people financially dependent on you, such as elderly parents and siblings. Find out more about eligible expenses and dependants in your plan booklet.

Your employer may be among the many that prefer the traditional plan design, but may offer you limited options to purchase more coverage (e.g., optional life insurance) at group rates via payroll deduction.

Flex plans can be more complex to understand than traditional benefits plans, but because you get to customize a program you can really use, your benefits can become more valuable to you.

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