Private Health Service Plan (PHSP)

By: Mimi C. Tang, CFP, CLU, CHFC

Do you have an incorporated business, limited company or a sole proprietorship? Do you want your employees including yourself to be able to deduct 100% of your medical and dental costs to your company, at the same time said benefits not be taxable to you and your employees? If so, you should have a Private Health Services Plans (PHSP).

Since 1988, the Canada Revenue Agency under IT-339R2 under Subsection 248(1) (also paragraphs 6(1)(a), 18(1)(a), 118.2(2)(q) and 118.2(3)(b)), passed into law the Private Health Services Plan that allows you to expense your medical costs through your company. Normally, any benefit(s) receive by an employee(s) is considered a taxable benefit and as an employer, the amount of benefit should be included in the employee's T4 slip as income and tax at his/her marginal tax rate. However, if you properly set up a PHSP, you can take your employees and your Health Care Coverage into your own hands by considering all the benefits of a PHSP. The first step in getting started is signing up. The administration of the plan is easy and does not take a lot of time.

What is covered?

• Hospital services
• Medication
• Prescribed medical treatment
• Any product, procedure or service you may receive from a Medical Professional. A licensed medical practitioner encompasses a broad range of individuals in the Health Care professional who are authorized to practice in accordance with the laws of the province and certified to the practitioners governing body. Example, Massage therapist, Physician, Dentists, Dermatologist, Registered nurse, Acupuncturist etc.
• Other Materials and Apparatus that don't require a Prescription like crutches, artificial eye/limb, any apparatus or material paid to a doctor, nurse or hospital etc.
• All dental services
• Laboratory examination and tests
• Other medical expenditures like ambulance charges, chiropractic care, eye glasses and contact lenses, homemaker service & home care attendant (must not be a relative) etc.

What does it cost? To sign up, a small one time set up fee of $295.00. After that, a 10% administration fee for expenses as they are submitted. The beauty about the PHSP is that all of these fees are 100% tax deductible for the employer and 100% tax-free to the employee.

Once you are registered, you can:

• Access to what you need when you need it
• No health qualifications
• No waiting periods to use the plan.
• The broadest coverage available
• 5-7 day turnaround time on claims

If you want more information, you are welcome to give me a call at 604-926-8068 or e-mail at mtang@mimitang.ca. To learn more of our other services, please visit our web site at www.mimitang.ca.

Please note: Ms. Mimi Tang, offers financial planning and insurance services as an independent representative, under Mimi Tang Wealth Management and Consulting LTD. and these services are offered independently of PEAK Securities.

PEAK Securities inc., an IDA registered, full service investment broker, limits its responsibility to investment products such as stocks, bonds, and mutual funds. PEAK Securities inc. is a member of the Canadian Investor Protection Fund.

Call Mimi Tang at (604) 926-8068 or email mtang@peakgroup.com
for financial planning in Vancouver, British Columbia, Canada.

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