There are numerous reasons why a business may consider a program like Flexsave™ in lieu of or in addition to traditional health/dental alternatives.

1. Currently paying Health/Dental Expenses personally

Many self-employed individuals/businesses do not currently have any program in place for employee health & dental expenses. Flexsave™ can provide a mechanism to have these healthcare expenses paid from a far more tax-efficient place without the company having to qualify or put in place a traditional employee benefit plan.

For example, a dental expense in British Columbia of $1,000 could be paid through Flexsave™ at $1112 pre-tax dollars(deductible to the business) as opposed to an employee having to earn $1675 (assuming a 40% tax-bracket) to net $1,000 to pay the expense.

2. Have investigated Insurance but frustrated with expensive premiums

Many self-employed individuals/businesses have investigated health/dental coverage but did not pursue it for any of the following reasons:

• Company was too small to have real “purchasing power” with the insurance companies
• Company was too new or in an industry where insurers  are not interested in providing benefits
• The majority of their workforce had coverage through spousal plans
• Their workforce wanted control over where they could use funds without being restricted by co-insurance or low maximums in each category (ie. dental, vision care, chiropractic etc)

The Flexsave™ program can address many of these issues as it does not restrict where the allotted dollars per employee are utilized and can even be used to run through the deductibles, co-insurance and amounts beyond the maximums in a spouse’s plan.

3. Want to reduce/eliminate potential increases in Health/Dental Insurance Premiums

Since Flexsave™ is not insurance in the traditional sense, some employers are drawn to the concept of “fixing” their health/dental funding. Employers under a Flexsave™ program know that they will not receive rate increases annually based on their employee usage.

Often these employers will use the Flexsave™ program on its own or perhaps as a means of complementing their plan (dental, health) that may be seeing heavy usage and rate pressure. The Flexsave™ program can also be used to run through amounts that were not covered under another plan, such as the deductibles, coinsurance amounts, and amounts beyond the maximums.

4. Using the Medical Expense Tax Credit through personal income taxes

Any individual may deduct medical expenses through their income tax that is determined by a CRA (Canada Revenue Agency) formula*. This formula creates a threshold in which any amount exceeding that can be eligible for deduction. Currently the threshold formula is calculated by taking the lesser or 3% of an individual’s net income or $2011 (for 2009). The allowable portion is then multiplied by the lowest tax rate percentage for the year.


* for more information, please refer to IT-519R2 of the CRA

5. Cost Savings Comparisons

Flexsave vs Medical Expense Tax Credit

Traditional Employee Benefits vs a Private Health Services Plan