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#1 Health Spending Account in BC

Read more about these pay-as-you-go extended health benefits plans designed for small businesses, and how it can save on taxes in BC.

What is a BC Health Savings Account?

A Health Spending Account (HSA) is the most cost-efficient alternative to a traditional group benefit plan. It was introduced by the Canadian Revenue Agency (CRA) in 1986 under IT-85RT. 


It allows business owners to provide a wide range of health related coverage tax free to his/her employees. Coverages includes supplemental health, dental, vision and even existing health insurance premiums.

Why get a Health Savings Account in BC?

HSA accounts in BC are considered to be the most cost-efficient way for small business owners to cover health related expenses for their employees. To see a more in depth comparison, read our outlined cost savings for HSA case studies.


As Wikipedia describes it:

"Health Spending Accounts provide substantial reductions in actuarial, administration, adjudication and marketing expenses compared to insured PHSP, by maximizing employee benefits and reducing employer cost.”

  • Health Spending Accounts are specified maximum Annual Allocations of funds exclusively for the purpose of health care spending. In some Health Spending Accounts, the company makes advance payments (incl. Administration Fees and Taxes) and in other Health Spending Accounts, payments can be made on an "pay as you go" basis.

  • Eligible claims are reimbursed to the employee (must be a bona fide employee and not just a shareholder or unincorporated owner), and are non-taxable benefits for the employee. Expenses (claims, administration fees and taxes) are a 100% business deduction for the employer.

Who Qualifies for a Health Savings Account in BC?

For incorporated business owners, both the employer and employee can take part in the plan. Businesses with as a few as one employee can be eligible.


This means a business with only the owner can be eligible. The only requirements are that the owner must be considered an employee earning a bona fide salary and the business must be earning active business income.


As for unincorporated businesses, usually sole proprietors, HSA are only eligible when they have at least one arm's-length employee. Sole-proprietors with no arm’s-length employee cannot use a HSA and must buy an insured plan through an insurance company.


Some HSA administrators do not allow unincorporated businesses due to the CRA challenges of their tax-act qualifications in the past. The risk is to be acknowledged by business owners if they wish to pursue further,

Ready to Start Saving?

Sign Up For a Free Health Savings Account in BC

CanadianHSA is an independent brokerage that is able to offer HSAs from most major HSA administrators in Canada.

We can help find the one most suitable and customize it specifically for your company.

We are currently offering a limited time free consultation, get in touch today!
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