Health Spending Accounts

HOW TO GET STARTED

Setting up a Health Spending Account is straightforward and highly flexible. Below is a simple framework to help you design a plan that fits your business.

How the Plan Works

The approach we use is pay-as-you-go.

There are:

  • no setup fees
  • no annual fees
  • no pre-funding requirements

Costs are only incurred when a claim is submitted.

At the time of the claim:

  • a 10% administrative fee applies
  • applicable taxes are charged

The full amount (including fees and taxes) is 100% deductible to the business.

This structure keeps the plan efficient and aligned with your actual usage.

STEP 1: Set Your Coverage Levels

Decide how much coverage you want to provide for each employee group.

Example:

  • Executives → $15,000
  • Full-Time Employees → $1,500

You can create multiple classes (e.g. Management, Part-Time, etc.)

Guidelines:

  • When setting different coverage levels for employee groups (e.g., executives vs. staff), it’s important that the plan remains reasonable and defensible as an employee benefit, not a shareholder benefit.
  • A common guideline is to keep the ratio between the highest and lowest class within approximately 10:1.
  • If you have full-time employees, we typically recommend including employees (not just shareholders) to avoid potential shareholder benefit concerns.

If the plan is for shareholder employees only, we need to ensure it is structured appropriately.

  • You should be earning T4 income from the corporation
  • Coverage is typically aligned to 10%–15% of income
  • If income is low, we benchmark against a reasonable salary for your role

This helps support the plan as a legitimate business expense.

STEP 2: Choose Your Plan Type

Decide whether you want:

Health Spending Account (HSA)

  • Covers medical expenses
  • Non-taxable to the employee

Wellness Spending Account (WSA)

  • Covers lifestyle and wellness expenses
  • Taxable to the employee
  • Fully customizable by the employer

You can also combine both using a flexible structure, allowing employees to allocate funds between categories.

STEP 3: Choose Optional Add-Ons

Employers can enhance the plan with additional coverage options.

Travel & Catastrophic Insurance

 $10 per employee / month

Travel Insurance:

  • 60 Days per Trip
  • $2,000,000 of Coverage
  • Coverage until Age 65

Catastrophic Coverage:

Maximum $125,000 per injury or sickness per person per calendar year subject to a lifetime max of $250,000, benefits included:

For each of the following $25,000 per person per injury or sickness per calendar year is provided subject to a lifetime max of $50,000 per person per injury or sickness over 104 weeks.

  • Private duty nursing
  • Prescribed drugs
  • Private hospital room (difference between public ward)
  • Ambulance
  • Durable medical Equipment
  • Accidental dental

Deductible: $2,500 per person per calendar year from all covered expenses combined.

Mandatory participation of all employees required

Pre-Existing Condition Limitation

For groups with fewer than 5 employees, a pre-existing condition exclusion may apply.

A “pre-existing condition” refers to any injury, illness, symptom, or medical condition for which medical advice, diagnosis, treatment, or medication was received or recommended within the 24 months prior to the start of coverage. This also includes conditions where a reasonable person would have sought medical attention during that period.

Why Add Travel & Catastrophic Coverage?

This coverage is designed to protect against large, unexpected expenses that would otherwise fall outside a typical Health Spending Account.

  • Covers high-cost medical events (hospitalization, prescription drugs, medical equipment)
  • Provides emergency travel coverage outside your province or country
  • Helps protect employees who may not have personal travel insurance

👉 Most employers include this as a foundational layer of protection within their plan.

Catastrophic Coverage with Life & Critical Illness Insurance

Single $27.20 per employee / month

Family $35.50 per employee / month

Includes Travel and Catastrophic Coverage

Life Insurance:

  • $15,000 Life Insurance for Employee
  • $10,000 Life Insurance for Spouse
  • $5,000 Life Insurance for Children

Accidental Death & Dismemberment (AD&D):

  • Benefit Amount: Up to $60,000 for Employee
  • Provides benefits for certain injuries caused by an accident. It pays a percentage of the Benefit Amount to the employee based on specific dismemberment (which can include loss of limb, sight, etc.), or pays the Benefit Amount to the employee’s estate in the case of an accidental death.

Critical Illness:

  • Benefit Amount $15,000 for Employee
  • The plan provides a lump sum payment upon the diagnosis and survival (30 days from date of diagnosis) of covered critical illnesses.
  • Covered Critical Illness conditions include: Alzheimer’s Disease, Aortic Surgery, Aplastic Anemia, Bacterial Meningitis, Benign Brain Tumour, Blindness, Cancer, Coma, Coronary Artery Bypass Surgery, Deafness, Heart Attack, Heart Valve Replacement, Kidney Failure, Loss of Independent Existence, Loss of Limbs, Loss of Speech, Major Organ Failure on wait list, Major Organ Transplant, Motor Neuron Disease, Multiple Sclerosis, Occupational HIV, Paralysis, Parkinson’s Disease, Sever Burns, Stroke.

Pre-Existing Condition Limitation (Life & Critical Illness)

No Life Insurance or Critical Illness benefit will be payable if, within the 24 months prior to the start of coverage, the insured received medical advice, treatment, consultation, or diagnostic testing for any condition that later results in:

  • a Critical Illness diagnosis, or
  • death

Why Add Life & Critical Illness Coverage?

This coverage provides financial support for more serious and unexpected life events—beyond day-to-day medical expenses.

  • Lump sum payment on diagnosis
    Critical Illness coverage provides a tax-free payment that can be used for anything—treatment, recovery time, or maintaining income
  • Financial protection for families
    Life Insurance helps protect dependents and provides support in the event of a loss
  • Covers risks an HSA does not
    An HSA reimburses expenses, but does not provide income or lump sum support during major health events
  • Simple, accessible coverage
    Offered on a guaranteed issue basis for groups, with no medical underwriting at enrollment

👉 This is often added by employers who want to provide a more complete benefits package without the complexity of a traditional plan.

Virtual Healthcare

$12.32 per employee / month

Through myHSA, you can enhance your plan with Dialogue’s integrated health platform, offering a range of support for mental health, wellness, and primary care.

EAP (Employee Assistance Program)
Provides access to confidential support for employees and their families, including:

  • Up to 4 sessions per case for mental health, family, and career support
  • Legal and financial consultation (up to 2 hours per case)
  • 24/7 critical incident support
  • Multiple cases permitted

Mental Health+
Expanded mental health support with fast access to care:

  • 24/7 access to therapists, psychologists, physicians, and coaches
  • Initial evaluation within 60 minutes
  • Virtual consultations within 24 hours
  • Ongoing care with follow-ups after each session
  • Access to self-guided tools, including iCBT

Wellness
Designed to support overall well-being and engagement:

  • Fitness challenges (individual and team-based)
  • Healthy habit programs
  • Access to wellness resources for employees and families
  • Library of educational wellness content

Complete Suite (EAP + Mental Health+ + Wellness + Primary Care)
A fully integrated solution that includes all of the above, plus:

Primary Care

  • 24/7 access to virtual medical care for non-urgent concerns
  • Same-day consultations (text, phone, or video)
  • Prescription renewals
  • Personalized follow-ups
  • Coordination with in-person specialists when needed

Why Add Virtual Healthcare?

  • Improves access to care for employees
  • Supports mental health and overall well-being
  • Reduces absenteeism and productivity loss
  • Enhances the value of your overall benefits offering

NEXT STEPS

Getting Started

Schedule a meeting to design and set up your plan

Once you’re ready, we’ll send an enrollment email with next steps and setup instructions

If You Have Employees

Once your plan design is finalized, we’ll guide you through the rollout:

  • We can prepare an employee communication to introduce the plan
  • Enrollment can be completed in one of two ways:
    • Employees complete and submit their forms individually, or
    • You provide us with employee details, and we handle enrollment via DocuSign
  • Optional:
    We can host a virtual onboarding session to walk employees through the plan and answer any questions

We’ll guide you through each step to ensure everything is set up properly and runs smoothly.

From Planning to Execution

Being an Independent Insurance Broker, we make it easy for you to find the best company and the best rate for your situation. You can trust that we work for you – not the insurance company.

We would love to discuss your lifestyle and insurance needs.

No high pressure sales tactics. We simply educate you on making the best decision for you. We proudly serve Ontario, Alberta, and British Columbia.

We have adopted a proven systematic approach to working with clients virtually, which allows us to get to know our clients and help them make an informed decision on what insurance solution is best for them.

Contact Us Today