How Health Spending Accounts Can Help Your Business

Health spending account

You might not know this, but 98% of all Canadian companies are small businesses with anywhere from two to 100 employees. And studies consistently show that half of these businesses are worried about how covered their workers are when it comes to health care benefits. All Canadians, of course, are covered by a largely free health care system that everyone pays into equally. But most Canadians receive additional coverage from their places of employment, too.

In other words, if you’re a business owner, it’s likely in your best interest to invest in a health spending account that your employees will be able to take full advantage of. Otherwise, there are certain expenses they’d have to pay for out-of-pocket — namely, eyeglasses, certain prescription drugs and dental visits. Employer-chosen HSA health plans are a viable way of cutting down on those types of costs so employees barely have to pay anything.

As the owner, you could start with dental insurance for small businesses. Since most dental expenses won’t be covered by the national healthcare system, putting in place some form of HSA for your employees will help them avoid unexpected mounting costs for, say, someone’s child needing braces. The more small business health benefits you look into, the healthier your employees (and their families) are likely to be. And the healthier they are, the more content they’re likely to be with their job.

So, how do these health benefits for small businesses work? Here’s a quick overview of the process as it unfolds:

  • An employee visits a health practitioner (like a dentist)
  • That employee pays for the expense out-of-pocket
  • The employee submits the receipt of the payment to the employer (or a third party)
  • The claim is legitimized and approved and the employee is paid back
  • The employer receives a 100% tax deduction for the service cost

In the end, providing dental insurance for small businesses allows your employees to feel comfortable in their positions. And you, as the employer, gain a tax incentive to ensure their health and happiness. Essentially, HSA plans are the ultimate win-win situation.

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