A one-size-fits-all benefits plan doesn’t meet the needs of today’s diverse workforce. That’s why many employers offer flexible benefits programs with health spending accounts (HSAs) to give employees more choice.

Just like the name suggests, flex benefits plans allow more flexibility than standard benefits packages. You can pick and choose what you want. 

Sure, flex plans can be more complex to understand than traditional benefits. But because you get to customize a program, your benefits can be more valuable to you. Read on to find out how flex benefits work – and how to make the most of them.

What are flex benefits?

There are three main types of flexible benefits plans:

Plan type How it works
Modular plans

These allow you to spend flex dollars (or “credits”) assigned by your employer on one of several 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 (i.e. topping up group RRSP contributions.)
Core-plus plans

These provide a compulsory level of coverage for key benefits such as: 

You can purchase additional coverage at a subsidized cost.

Cafeteria plans

These have the most flexibility and only very large employers offer them, generally.

Your employer assigns you flex credits to use for buying the coverage you need from a broad menu. And you can allocate any unused credits to your HSA or take them in taxable cash.

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How does a Health Spending Account (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,* in addition to a traditional benefits program or as part of a flexible benefits plan.

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

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

*(Except to members living in Quebec).

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How can you maximize your HSA credits?

Do you have a medical claim that isn’t fully covered by your medical or dental plan? If you have HSA credits, you can use them to pay for the rest of your claim! 

For example, my benefits plan covers massage therapy for up to 80%. That means I pay the remaining 20% for a massage appointment out of pocket. But with my HSA credits, I'm able to submit the remaining 20% and receive reimbursement. So, my much-needed massage is $0. Then, I repeat throughout the year until my credits run out. 

To make the most of your HSA credits, it’s a good idea to submit your claims in this order: 

  1. Start by submitting claims to your extended health or dental plan through your employer. 
  2. Then, coordinate or submit to your spouse’s plan (if applicable). 
  3. Finally, submit any unpaid and eligible amounts of the claim to your HSA.

What expenses does an HSA cover?

You can be reimbursed for medical, hospital or dental costs 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.

Does an HSA pay for dependents’ expenses too?

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. It 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 information or from your employer.

Do you need health insurance coverage beyond your flex benefits?

Your employer may offer options to purchase more coverage (e.g., life insurance) at group rates through payroll deduction.

If your benefits coverage isn’t enough, you may want to consider additional coverage through one of these 4 options:

What? How?
1. Apply for personal health insurance online.  Get a free insurance quote. 
2. Apply for life insurance online with Sun Life Go Insurance Get a free life insurance quote.
3. Apply for Sun Life Choices insurance within 60 days of leaving a workplace insurance plan with any Canadian insurance company. 

Not a Sun Life member? Get a free health insurance quote


Are you a Sun Life plan member? Apply for Health Coverage Choice

4. Talk to a Sun Life advisor to understand your health insurance and life insurance options.  Find an advisor

This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.