Top Reasons to Have a Private Health Services Plan

A Private Health Services Plan, which is an excellent idea for employees of businesses or those that are self-employed, is a great way to decrease the amount that you will have to spend out of pocket on a variety of different types of medical, dental and therapeutic treatments. A PHSP is very flexible and ensures that you have additional coverage in the event that many of the medical, dental, vision or therapeutic services you require are not covered by your provincial insurance. In addition these plans can be a great tax saving for both the employee and the business.

Although most of the major medical expenses are covered in Canada and the risk for individuals to find themselves in financial ruin because of medical bills is not a factor as it is in the United States, most families still spend between $3,000 and $4,000 per year on medical expenses. This may be more if you have several children in the family or family members that have significant dental problems, vision problems or that are requiring orthodontic treatment. In addition those that regularly visit a chiropractor, massage therapist or use an alternative type of treatment such as acupuncture may find that their current insurance caps the claims allowed or has a set limit each year.

The benefit of a Private Health Services Plan to these individuals, which may include employees and their families depending on the employer's design of the plan, is that these additional expenses can be covered. While the employee files the claim, a small amount, usually about 10% of the approved claim, is charged without the need for regular monthly premiums. It is literally a pay as you claim system for most small companies with the amount that they end up covering fully tax deductable as a business expense. There are some guidelines established by the Canada Revenue Agency that outlines the eligibility of each type of claim, but typically services provided by a licensed professional will be covered.

For very small companies that want to offer employee benefits the Private Health Services Plan option is an ideal choice. The coverage is more comprehensive than that found with traditional types of additional insurance coverage plus you can be flexible as to how you want to operate the program. Some companies opt for a pre-pay option that allows them to roll credits or unclaimed values from the previous year into the next year. The company's contribution within the year is deductable for the company while the employee is not taxed on the money they use to cover their medical expenses.

This plan covers a variety of services, not specifically just medical expenses. Some of the best plans will cover things such as dental cleanings, preventative oral health treatments, vision care, laser eye surgery, prescription glasses, prescription medications, therapeutic services and a variety of other expenses related to preventative or treatment types of health care services.

For businesses the cost of enrolling in a Private Health Services Plan for their employees is much less costly than traditional insurance options. There is usually a one-time fee that handles all the administrative paperwork to set up the account, plus a small fee for each employee. After that the fees are entirely based on the claim amount. The added benefit to you is that this initial set-up fee, like the funds provided to employees; is completely tax deductible in the year that it was made.