Benefits Plan Options for One Person

The Benefits Trust offers benefits plan options for one person designed to provide appropriate coverage for a variety of situations.

Watch This Explanatory Video to Learn About Your Options:

Who is the Benefits Plan For?

Benefits Plan Options for a Business Owner

An owner-operator, sole proprietor, or incorporated individual can have a benefits plan for one that provides the right coverage for the individual and their family.

Setting up a benefits plan is a means to pay medical and dental expenses in the most tax-effective way possible, as any benefits plan is a fully tax-deductible business expense. Therefore, it is advantageous for entrepreneurs with medical or dental expenses to have all expenses covered by their plan.

As a business owner, it’s a simple matter to set up a benefits plan for one, and you are absolutely eligible to do so.

The Benefits Trust offers two great options for a benefits plan for a business owner:

1. Healthcare Spending Account Plus (HSAP) Plan

A healthcare spending account is a defined contribution plan, where the business owner determines how much money is available at the beginning of each benefit year for coverage of medical and dental expenses. HCSAs have the broadest definition of eligible expenses of any benefits plan in Canada and are reimbursed at 100%.

Why Use This Plan?

This option is ideal for those who are looking to supplement an existing plan (for example, a spouse’s plan) or to control their spending budget.

Many businesses desire a fixed budget for a number of different reasons. A defined contribution plan like this one allows them to know what their costs are each month and not have to worry about their renewal.

It is also a good plan for groups with multiple owners that want to offer the same amount to each.

HSAP Benefits

  • Set monthly benefit costs (no budget surprises!)
  • Fully tax-deductible expense to the business
  • Claim reimbursements are received tax-free by the claimant
  • You choose how best to allocate your healthcare dollars
  • No internal limits, coinsurance, or deductibles
  • Unused account balances can be carried forward into the next benefit year
  • HCSAs can be used to supplement other plans; claims go through the HCSA last

HSAP Limitations

Healthcare spending accounts have specific limitations for sole proprietors, who can contribute a maximum of $1,500 per adult (including children over age 18) and $750 per child. Depending on your family composition and needs, this may or may not be sufficient for you.

Click here to learn more about healthcare spending accounts and what expenses are eligible for coverage.

To apply to the HSAP, download the HSAP application and calculator worksheet.

2. Executive Benefits Plan

An Executive Benefits Plan is a custom-designed one person budgeted ASO plan. It is a defined benefit plan that provides 100% coverage of CRA-approved medical and dental expenses.

Why Use This Plan?

This product is typically a better fit when there is no existing coverage. It also has fewer funding restrictions for sole proprietors. It is ideal for business owners who have an idea of their medical and dental expenses and “just want everything covered”.

With this plan, you set an annual estimated budget, not a limit. A defined benefit plan like this one has no specific limitations on what amounts can be contributed.

It is also a good plan for groups with multiple owners who want to ensure every expense is covered and determine cost sharing internally at year end.

Executive Benefits Plan Benefits

  • Set a benefit budget (no limits!)
  • Fully tax-deductible expense to the business
  • Includes pay-direct drug card
  • Fewer restrictions on funding for sole proprietors
  • Claim reimbursements are received tax-free by the claimant
  • No internal limits, coinsurance, or deductibles
  • Comprehensive coverage when there is no existing coverage

Executive Benefits Plan Limitations

Since they do not have a spending limit, Executive Benefits Plans do not have strict cost control mechanisms in place. Business owners with concerns about overspending may unintentionally exceed their desired budget.

To apply to the Executive Benefits Plan, download the EBP application and calculator worksheet.

What about Conventional Plans?

Core health and dental coverage plans typically provide a percentage of coverage (e.g. 80% of your routine medical and dental expenses) with deductibles, restrictions, and internal maximums.

Conventional benefits plans aren’t right for owner-operators, sole proprietors, or incorporated individuals because it doesn’t make sense for the business owner to pay 20% out of pocket when they could have more comprehensive, tax-deductible coverage through their business instead.

For more information on setting up a benefits plan for a business owner, call your insurance advisor or contact us today.

Benefits Plan Options for One Employee

A small business owner may want to offer a benefits plan for a single employee.

The Benefits Trust offers two great options for a benefits plan for one employee:

1. Healthcare Spending Account Plus (HSAP) Plan

A healthcare spending account is a defined contribution plan, where the business owner sets a predetermined amount annually to be available in the employee’s healthcare spending account plus plan.

HCSAs have the broadest definition of eligible expenses of any benefits plan in Canada and are reimbursed at 100%.

Why Use This Plan?

This option is provides complete flexibility to the employee to use the funds as needed, and total cost control to the employer.

Healthcare spending accounts also have the advantage of being second payor for coordination of benefits. If the employee is already covered under their spouse’s plan, claims will continue to flow through the spouse’s plan, with unpaid amounts to be reimbursed through the HCSA.

Unused amounts can be carried forward for one year, allowing families to budget for large expenses such as laser eye surgery or orthodontia, items often uncovered by conventional plans.

HSAP Benefits

  • Set monthly benefit costs (no budget surprises!)
  • Fully tax-deductible expense to the business
  • Employee can choose how best to allocate their healthcare dollars
  • Unused account balances can be carried forward into the next benefit year
  • HCSAs can be used to supplement other plans; claims go through the HCSA last

Click here to learn more about healthcare spending accounts and what expenses are eligible for coverage.

To apply to the HSAP, download the HSAP application and calculator worksheet.

2. SelectFlex Plan

The SelectFlex Benefits Plan is a conventional style defined benefit plan, but with flexible options. It provides co-pay coverage for the employee’s CRA-approved medical and dental expenses.

Why Use This Plan?

The employer can choose which benefits to offer through SelectFlex. For a one-person plan, coverage includes the mandatory Extended Healthcare and optional Basic Dental and HCSA portions.

SelectFlex was designed to place many of the inflationary components of a benefits plan into the HCSA, giving greater control and rate stability to the employer.

SelectFlex Plan Benefits

  • Set a benefit budget
  • Fully tax-deductible expense to the business
  • Includes prescription drug card for employee
  • Choice of benefits coverage options
  • Includes co-pay between employer and employee
  • Easy to customize
  • Easy to understand

Click here to download the PDF overview of SelectFlex.

For more information on setting up a benefits plan for one employee, call your insurance advisor or contact us today.

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