Maximizing Your Health Care Spending Account
A Health Care Spending Account (HCSA) allows employees to cover health-related expenses that exceed their standard insurance coverage. These accounts allow employees to supplement their benefits and address any gaps.
HCSAs are funded with a fixed dollar amount for the year, enabling employees to submit claims for reimbursement until the balance is depleted or expires. These accounts are unique to each organization and membership, and not all employers include them in their plans.
What is a Health Care Spending Account?
An HCSA is an optional health and dental benefit feature that can be part of a traditional or flexible benefits plan. Employers decide the annual amount to deposit into an employee’s HCSA, and claims are processed according to the plan rules until the balance runs out or expires.
Benefits for Plan Sponsors:
- Added Flexibility: Offering employees additional benefits.
- Predictable Costs: Employees can’t claim more than their allocated amount.
- Cost Management: Helps manage overall benefit costs.
What Will a Health Care Spending Account Cover?
Eligible medical expenses, as defined by the Canada Revenue Agency, are typically covered under an HCSA. Employees can use their HCSA to supplement what their standard benefits cover or pay for expenses not included in their provincial or standard benefits plan. Examples include:
- Outstanding balances after insurance pays for a health or dental claim, such as deductibles and coinsurance amounts.
- Expenses above plan maximums under health or dental plans.
- Standard health or dental benefits for employees who have opted out due to spousal coverage.
- Other insurable health-related expenses that qualify for a medical expense tax credit, such as medical doctor fees to complete forms, prescribed medical equipment, or service animals.
- Medical expenses not covered under provincial or standard insurance plans, such as certain diagnostic tests or assistive devices.
Four Ways to Maximize Your Health Care Spending Account
- Awareness
Ensure employees are aware of the HCSA benefits. Educate them on what an HCSA is and how it supplements their standard insurance coverage.
- Understanding Coverage
Provide employees with a list of eligible medical expenses as defined by the Canada Revenue Agency, so they know what can be reimbursed.
- Submission Deadlines
Inform employees about credit or claim carryover periods and submission deadlines to use reimbursements.
- Balance Checking
Ensure employees know their allotted amount and how to check their balance.
Discover the full potential of your Health Care Spending Account by ensuring your employees are informed and utilize their benefits effectively. Contact our experts today for more details on how to integrate HCSAs into your benefits plan.