If your client operates a business, is self employed or an independent contractor with arms-length employees*, they may be eligible. The business must be their main source of revenue and an individual is not able to create a company for the sole purpose of a Health and Welfare Trust or a PHSP. There are no minimum or maximum size requirements.
How does it work?
The employee incurs an eligible medical or dental expense and pays the practitioner (pharmacy, dentist etc.).
The employee completes the online claim submission on the employee online portal, attaches a copy of the receipt and electronically submits the claim to HUB Financial.
HUB will verify if funds are available for reimbursement under the Employers account. If there are not any funds available, HUB will send an invoice on amount owing to settle the claim.
Upon receipt and verification of an eligible claim and funding, HUB Financial will reimburse the employee directly.
The company receives a statement for all the paid claims, including all administration fees and applicable taxes, for income tax deduction purposes.
For Incorporated Businesses
Upon set up, the employer must decide on the maximum benefit amount they wish to give each employee. The maximum must be consistent amongst employee class and cannot be discriminating by individual person (e.g. All office workers will receive $2,000 annually). Separation of classes is only available to incorporated companies.
For Unincorporated Business with Arms Length* Employee(s)
If the unincorporated business has eligible Arms Length employees, the CRA sets the owner maximum in a differing manner. The owner’s eligible amount in this case would be the lowest cost-equivalent coverage provided to their least-favored Arms Length employee. For example, if the owner provides only $500 to an employee, then their personal deduction ability will also be limited to $500 per annum.
* Arms Length employee is one that is unrelated to the sole proprietor.