Not all SmallBiz Owners have employees…Some of the SmallBiz Owners that I come across are Solopreneurs (One-Person Organizations) or are a Husband-Wife Team.
These SmallBiz types typically are looking to set up a Benefits Plan for themselves that helps them offset their Health & Dental expenses because they have discovered that submitting their Health & Dental expenses through their Personal Income Tax really doesn’t produce much of a Tax Credit.
So, let’s make the funding of their family’s Health & Dental expenses flow through the company as an eligible business expense.
Either of these options are all well and good but you’re the Owner! As the Owner, wouldn’t you expect that you would get reimbursed 100% of what you claim? The Chamber of Commerce; Manulife; and Greeen Shield options all have restrictions and maximums in place that will have you still reaching into your pocket to pay with after-tax income.
For example, let’s say you require prescription eye-ware…does it make sense to be restricted by a “$250 every 2 years” maximum like you would find in the Chamber of Commerce, Manulife, or Green Shield options?
Doesn’t it make more sense to get reimbursed for the full amount for your prescription glasses? Sunglasses? Safety glasses? As often as you would like?
Luckily, there are other 100% Reimbursement options out there for the SmallBiz Owner and their family:
- Administrative Services Only (ASO) – You sit down and figure out what you expect your family’s Health & Dental expenses are going to be over the course of the upcoming year…divide by 12; add an Administration charge; add a charge for Emergency Travel + Catastrophic insurance plus applicable taxes…and that is what you pay every month. A reconciliation is done at the end of the year…if you don’t use all of your funding, then you get a credit; or, if you use more than what you calculated, then your funding is adjusted for the following year.
- Health Care Spending Account (HCSA) – same as above, except the biggest difference is that once you set the funding amount, then you can only get reimbursed up to what has been deposited in the HCSA…it is essentially a bank account for Health & Dental expenses. If you don’t use all of what you calculated, then the unused portion gets rolled into the next year. Also, it is optional to add Emergency Travel or Catastrophic insurance. BUYER BEWARE: SOLE PROPRIETORS ON THEIR OWN ARE NOT ELIGIBLE FOR THE HCSA OPTION.
In either the ASO or the HCSA, you can get 100% reimbursement.
Located in Cambridge, ON Sharkey Group Insurance provides independent Employee Benefits advice & counsel for Small Businesses across Ontario.