A Flexible Spending Account is a great addition to your group benefits plan. It gives you choice and flexibility in a benefits package that is customizable to meet your health and wellness needs.
How it works:
Employers establish a set credit amount. Employees then make a choice every year as to where to allocate credits between two accounts: a Health Spending Account and/or a Personal Spending Account.
Health Spending Account (HSA)
An HSA is a natural extension of the health and disability solutions you are already offering employees through the core benefits plan.
Employees can use allocated credits to pay for a wide variety of health and dental expenses. Expenses are deemed eligible in accordance with the Canada Revenue Agency and federal Income Tax Act guidelines. This means that no income tax is deducted from employees’ credits before they are deposited into the account.
Personal Spending Account (PSA)
A PSA offers more opportunities for health and wellness outside of the regular benefits plan.
It covers a wide range of eligible expenses supporting the mental, physical, and financial well-being of employees and their families. Items offered in a PSA are generally considered a taxable benefit to employees. Reports are provided at year end to use for payroll-related taxes and deductions, as well as related tax reporting to employees.