The OMA Priority Insurance Plan And The Benecaid Health Spending Account
Filling In The Gaps
The Extended Health Care (EHC) plan through the OMA Priority Insurance Plan (OPIP) is a comprehensive health plan provided to Ontario doctors for a low annual premium of $50 plus the taxable benefit of the premiums paid on your behalf. However, there are gaps in the coverage offered. There is an annual deductible of $1000 for singles and up to $2000 for couples and families. There are no benefits payable for dental and vision expenses (accidental dental is covered). The Benecaid Health Spending Account (HSA) is designed to fill in these gaps and provide full comprehensive coverage for you and your family in a tax efficient manner with low premium costs that are based on the health and dental needs of you and your family. For those physicians that chose the Health Spending Account through OPIP instead of the EHC plan, the Benecaid HSA can be used to augment the OPIP HSA to cover additional uninsured medical and dental expenses above the $430/year offered through Option A and $350/year offered through Option D.
What Is The Benecaid Health Spending Account (HSA)? The Benecaid HSA is like a bank account in which you deposit a set amount of money each plan year. Contributions are recognized as a 100% business deduction in the year in which they are contributed. You can submit expenses you or your dependents incur that are deemed “eligible medical expenses” under the Income Tax Act for a tax free reimbursement.* The list of “eligible medical expenses” is long and varied and includes benefits not paid because of the OPIP annual deductible as well as dental and vision expenses. “Eligible medical expenses” also include many benefits not normally found in a traditional health or dental insurance plan such audiologist services, dental services including orthodontics and cosmetic dentistry such as teeth whitening, contact lenses and vision care, elderly parents and dependent care, fertility drugs and treatment, testing for scholastic ability in children and tuition for special needs education. Coverage is available to you and your family including older children, parents and other members of your immediate family who are dependent financially on you.
There are two different HSA available to fill in the gaps– one for incorporated physicians (Health & Welfare Trust – HWT) and one for self-employed non-incorporated physicians (Personal Health Savings Plan – PHSP).
Incorporated Physicians
Each year you determine the amount of money you wish to fund your HSA based on the estimated annual health and dental expenditures for you and your family that are not covered through the EHC plan through OPIP or any other insured plan. Premiums paid to the plan are a product of the contribution amount and the method of payment. With every deposit, you are charged a 10% administration fee to cover the cost of adjudicating claims. A 2% premium tax is added. For example, if you determine that a reasonable benefit amount is $3000/year and you wish to fund your HSA on a monthly basis, the monthly premium would be $281.75 which is composed of the $250/m deposit to the HSA plus the 10% administration charge, GST on the administration charge and 2% premium tax. You can pay your premiums on a monthly, quarterly, semi annual or annual basis through a pre-authorized chequing plan. This premium payment is a 100% tax- deductible as a business expense. You submit your medical/dental expenses that are not covered under OPIP to your HSA for a tax-free reimbursement.* Expenses are reimbursed as there is money in the account. If there is not enough money in the account the claim is held until the next premium payment is received within the plan year.
If you do not use the money in your HSA in one year the money rolls over to the next year. Excess funds roll over indefinitely. There are no limits as to the amount you can contribute as long as the amount is reasonable and the benefit is offered by virtue of you being an employee of the corporation. The minimum amount you can contribute is $600 / year.
An HSA is the ideal solution for a cost effective benefit program that covers medical and dental expenses not covered under OPIP. It is the perfect solution to fill in the gaps. You set the annual contribution level, define the contribution schedule, and Benecaid handles the administration and claim payments. You can change the contribution level each year. When you submit claims for reimbursement to Benecaid, a $3.75 per cheque charge (per cheque and not per claim) is deducted from your HSA.
Non-Incorporated Physicians
If you are not incorporated, Benecaid offers a Private Health Services Plan (PHSP). The plan design and costs are similar to that outlined above for incorporated physicians except that the money cannot roll over indefinitely and is subject to a 2-year forfeiture clause. Money deposited that is not used to pay “eligible medical expenses” within 2 years of the deposit is forfeited. The annual contribution limit to the plan is capped at $1500 per adult (18 years of age and older) in the family and $750 per child. The amount of contribution allowable is pro-rated based on the tax year. For example, if you are a sole proprietor with 2 adults and 2 children in your household, you would be eligible for annual deposits into your HSA of $4500. If you start in July however, your allowed deduction for the tax year would be $2250, the equivalent of 6 months pro-rated. The full $4500 or $2250 mentioned above is available to reimburse “eligible” expenses of any/all family members and is not limited to $1500 for each adult or $750 for each child. For example, if $4500 is the annual family limit, the full $4500 can be used to reimburse expenses for one family member if required.
Employees
Full time employees of your medical practice can be added to the Benecaid HSA plan and given their own HSA to supplement a benefit plan they already have through their spouse, pay for premiums they or their spouse pay to a private or group health plan or to provide funds to reimburse “eligible medical expenses” they incur. The HSA provides a tax efficient and flexible way to provide benefits to your employees. Not only does it help employees cope financially with medical/dental expenses, it is a much better way to provide an increase in compensation as the benefit is tax free to the employee and the funds deposited do not require employer/employee CPP or EI remittances. You decide the amount you will contribute to your employee’s account every year. Your employee(s) submits expenses directly to Benecaid, up to the annual allotment. For employees of a corporation, there is no limit on the contribution level and the funds roll over indefinitely. For employees of a non-incorporated entity, there is a limit of $1500/adult and $750/child and a 2 year roll over of funds. If an employee is added PST is charged on the HSA for the employee as well as the HSA for yourself.
*Tax Issues
For more information, please vist www.benecaid.com
How To Submit a Claim
Please click here for a presentation on how to submit a claim. Please be sure that your sound is turned on as the presentation is narrated.
Claim Forms
OPIP claim form
Benecaid claim form
