Healthcare has always been a topic of importance on a global level. As the world moves forward, people start to become more aware of their rights. This is why employee benefits, wages, healthcare, retirement plans, compensation, along with other needs, are now popularly discussed. There is nothing more precious than our wellbeing, which is why we need to ensure that we’re receiving proper care for it. With this said, HSCA, or Health Care Spending Accounts, are considered the forthcoming employee benefits. Read through our article to find out what Health Care Spending Accounts are and what they’re used for.
What’s an HSCA?
A Health Care Spending Account is a type of employee benefit. This benefit provides compensation for a wide array of wellness, including oral conditions, expenses. Having Extended Health Care coverage along with a fully insured plan ensures that these expenses are taken care of. To grasp a deeper understanding of the concept, you can think of it as a bank account. Each employee has access to their own HSCA, where they can view individual health and oral expenses. The employer decides on a set amount every year to provide to their employee. This allows the employees to gather an accurate consensus on the total benefit provision costs. Keep in mind that this is not the same as group benefit plans where the costs and annual increases can vary. Health Care Accounts are tax-deductible, making them tax-free benefits.
As we mentioned above, a Health Care Spending Account can be used to cover a wide range of conditions and situations. To say the type of coverage you’re entitled to as an HSCA owner would be a tall order. However, the following are just a handful of the most frequent uses: vision or eye care, cancer treatment, crutches, medical marijuana or cannabis, hearing aids, ambulance services, pacemakers, fertility treatment, dental or oral care, and heart monitoring devices. You can also use your HSCA to partake in vitro fertility programs, buy gluten-free products if you have celiac disease, and receive medical care outside of Canada.
How Is It Integrated Into a Benefits Plan?
You may be surprised to learn that a Health Care Spending Account can provide coverage for costs that are not typically provided by a fully insured plan in Canada. Employers can also look into the possibility of integrating into group benefits insurance and create customizable plans. It also serves as an entirely alternate or supplemental option to the traditional benefits. For instance, traditional benefits offer what is known as co-payment when your coverage maximum has been exceeded. In this case, you would have to pay around 25% of your treatment, which you can pay for using an HSCA. Your HSCA balance can also be used to pay for expenses that are not covered by your standard plan.
If you’re an employer who’s looking to provide their employees with HSCA benefits, you should know that they’re non-taxable and that they do come with specific tax advantages. If you decide to provide your employees with a balance of $1000, this is the exact amount that they can spend, with no government taxes deducted. However, you still need to know that you have the option to make the employee’s HCSA spend, as they claim, a corporate tax deduction.
Personal Vs. Health Spending Accounts
You’re probably wondering what’s the difference between personal and health spending accounts by now. Personal or wellness spending accounts differ from HSCA in the things that they cover. The expenses that a PSA or a Personal Spending Account covers can be set by a Plan Sponsor. Unlike HSCA, PSAs are taxable benefits and are included in an employee’s compensation package.
Why They Should Be Included
Health Care Spending Accounts need to be included in an employee’s benefits plan due to the increased demand in the market. Working individuals are only growing more competent; they are keen on receiving degrees, growing their skills with accessible online resources, acquiring experience, and more. Companies, therefore, curate top-tier benefit plans in hopes of attracting these prospective employees. Deciding on useful and appealing benefits for everyone can be challenging; though, HSCAs make it a lot easier. They allow employees to spend their balance at their own convenience.
It is safe to say that Health Care Spending Accounts will take the world of employee benefits by storm. They are highly convenient for both the employer and the employee. While being tax-deductible for the provider, they allow the worker to spend the set balance at what they find most valuable without resorting to their own out-of-pocket spending or their personal health insurance plans.