If you’ve been looking for an affordable option for providing health care coverage for yourself – as a business owner – your family and for your staff, Dr. David Imrie, a medical doctor who has dedicated himself to the insurance industry for over a decade, might have an answer for you.
Not only is this option within reach for most business owners, it also provides access to services that regular health coverage plans do not, without the added requirement (and often obstacle) of a ‘gatekeeper’s’ authorization.
Dr. Imrie, as was mentioned above, began working in the insurance industry over a decade ago. He had always appreciated the importance of a healthcare compensation plan for business owners –because it makes all purchases tax-free. However, when he came to use the benefit plan, he was shocked to learn that there were hidden charges – co-pays, deductibles and excluded items and so forth – which meant he had to use after-tax dollars to access the plan itself.
Dr. Imrie believed that there had to be a better way! After researching this problem, he found that, indeed, there is a better way. In Canadian Revenue Agency lingo is called a P.H.S.P. (Private Health Services Plan) and this is the term it can be found under in the Income Tax Act.
Dr. Imrie has now made it his passion to get the message out to business owners so that they too can take advantage of Canadian government's offer of tax forgiveness. As few people, at present, are aware of RHSA, Dr. Imrie is enlisting the help of healthcare providers to get the message out.
What is an RHSA?
“A RHSA is a government-sponsored account – like an RSSP or an RESP – which permits a business to pay for all health care expenses for their employees and their families, including the business owner, on a tax-free basis,” Dr. Imrie tells Massage Therapy Canada. “These health care expenses become a deduction to the business and are received as health care compensation, tax-free in the hands of the employee. The value of the RHSA is that it turns out-of-pocket expenses into a business deduction."
How does the RHSA work?
“Providers continue to have their existing relationship with their patients,” explains Dr. Imrie. “Patients pay the provider directly, as is current practice, and can even use their families’ insured benefits plan as the first payor, if they choose. All out-of-pocket expenditures are sent to RHSA for adjudication to Canadian Revenue Agency criteria. RHSA operates as an independent administrator of the employee benefit plan to assure that all expenses are covered in the Income Tax Act.
“RHSA bills the amount to the company that the employee works for, and transfers the funds using Electronic Funds Transfer to the business owner’s private bank account to act as reimbursement for the funds paid to the provider.
“RHSA costs $199 per year which includes set-up fees, adjudication and funds transfer on all expenditures. The average tax savings per family are up to $2000 or more per year.”
What expenses are eligible
The response to this question encompasses one of the stronger points of the RHSA. Among other specialty providers, RHSA covers chiropractic and massage therapy services without requiring a referral from a physician.
“Most people are amazed at their range of eligible expenses,” says Dr. Imrie. “The plan includes all prescription drugs and dental services without deduction or exception. Also included, are all health care services provided by chiropractors, massage therapists, registered nurses, registered dietitians, opticians and optometrists, naturopathic doctors and many more.”
What are the benefits of the RHSA?
“For providers,” notes Dr. Imrie, “patients with RHSA have full coverage for any and all necessary healthcare needs without hidden charges and deductibles. Patients are still responsible for provider billing, but RHSA reimburses in tax-free dollars making these expenditures much more affordable and health care needs much more accessible. There is no increased administrative burden for providers.
“For patients,” he continues, “RHSA insurers assure that health care costs are entirely paid for up to the funding limit. The funding limit can be augmented by wage increases, commissionor bonus compensation. In addition, RHSA is used to top-off existing family benefit plans, working together to provide full tax-free coverage. As well, people with pre-existing health care conditions – who normally find it difficult to qualify for some group insurance plans – have no difficulty being covered with RHSA.”
“For employers,” Dr. Imrie concludes, “RHSA provides cost certainty – in other words, they know up front how much their benefit cost will be. In addition, RHSA provides flexibility for employees to contribute part of their compensation if they deem it necessary for more coverage. Employers are excited to know that each dollar they contribute to RHSA accesses government tax forgiveness of 50 to 80 cents, and accesses funds provided by a spouses' insured benefit plan. With an RHSA, employers are providing valuable healthcare compensation – this is something that can never be referred to as a ‘fringe benefit’”.
Are there any drawbacks?
RHSA has been designed to deal with routine health care expenses such as dental care, prescription drugs eyeglasses, physiotherapy and so forth, but also includes coverage for therapies that usually qualify for less consideration such as massage and chiropractic care. However RHSA is not insurance and as such, can mitigate concern about the financial impact of a major illness or accident by offering access to additional catastrophic healthcare insurance while providing the best combination of protection and tax-free healthcare dollars for everyday purchases.
NancyPhilip, a certified financial planner with Financial Wealth Builders Inc (and columnist for Canadian Chiropractor magazine) notes that, “This is an alternative to a traditional medical/dental plan. A self-employed person can set up an account with their own money and then run medical expenses through the account and use it as a business deduction, just as they can for a medical/dental plan. It is the individual’s own money and they do have to pay an administration fee to the company that manages it. So, it’s not for everyone. However, the advantage is that you can run expenses through it that might not normally be covered by a traditional medical/dental plan – it can be a viable option for some self-employed people.”
A 21st-century alternative
Dr. Imrie is calling on all healthcare providers to get the message out to their patients that a valuable government tax break is available and that it can save patients 50 to 80 cents on each dollar spent on health care needs for their family. For more information, you can call Dr. Imrie at 877-409-2050 or visit www.myrhsa.com.