Health Spending Account

Keeping costs down while keeping employees happy - Standard Life's Health Spending Account lets you do both. And it offers flexibility too.

• How does it work?
• Advantages for the employer
• Advantages for the employee
• Customizing a Health Spending Account

How does it work?

A Health Spending Account works like a special savings account. Every year, an amount is placed in each employee's Health Spending Account. The employee uses this money - called credits - to settle those medical and dental care fees that are not covered by their group plan.

This program can be effectively combined with a basic group insurance plan or it can simply be offered on its own, as a flexible benefits plan.

Advantages for the employer

Effective tool for managing costs - With a Health Spending Account employers know ahead of time how much the benefits program will cost because they decide how many credits will be given to employees each year. This helps in reducing the financial risks of claim fluctuations.

Tax deductible - All reimbursements and administrative fees related to a Health Spending Account are tax deductible.

Advantages for the employee

Options - Employees can use their credits to cover the expenses for any eligible medical and dental care they need. They get to choose the benefits that best suit their needs.

Less out-of-pocket expenses - When combined with a basic group insurance plan, credits may be used to pay for:

• The deductible on services covered by the basic group insurance plan
• The portion of the benefit payment not fully covered by the basic group insurance plan
• Care not covered by the basic group insurance plan, but that qualifies as a medical expense in the Income Tax Act

Income tax free - The credits in this account are considered as non-taxable income (except in the case of Revenue Québec).

Customizing a Health Spending Account

There are several ways to customize a Health Spending Account to create a plan that meets employers' objectives and best suits employees' needs.

A variety of allocation options

• Funds can be allocated based on a fixed amount or on a percentage of the employee's salary, or it can be a variable amount.
• The yearly allocation can be fully credited on the Health Spending Account's anniversary date or it can be distributed and credited monthly, quarterly or semi-annually.

Broader range of eligible dependents

Employers can choose between two categories of eligible dependents. The option they choose will be applied to all employees covered by the Health Spending Account -

• The program can be made available to the employee's spouse and dependent children, as defined under the basic group insurance plan.

Or

• The program can be made available to all dependents that meet the requirements of the Canada Revenue Agency Medical Expenses Tax Credit, who would not otherwise be eligible under the group plan.

Carry-forward options

Employers can choose to carry-forward either:

• Any remaining credits for a period of up to 12 months, or
• Any expenses for a period of up to 12 months

Subject to Canadian Revenue Agency requirements, the option chosen will apply to all employees covered by the Health Spending Account.

Flexible eligibility date

The Health Spending Account eligibility date can either be:

• The same as the eligibility date of the group plan, or
• A later date of the employer's choice

The option chosen will apply to all employees covered by the Health Spending Account.

Seamless claim process

With Standard Life's claim process, the Health Spending Account automatically pays for any portion of an eligible expense not paid for by the basic group insurance plan.