Prevention is something that is very near and dear to me. My son was only 15 years old when we received a phone call with the news that he had Type One diabetes. Previously that year he had been awarded the distinction of being Canada’s top air cadet and given a space scholarship, but his dream ended with that single phone call.
As parents, our sense of vulnerability was palpable. This time he was “the other guy” we always hear about. That winter, three guys in my recreational hockey league passed out on the ice with heart attacks and I knew that with my family history of cardiac disease, that it could have been me.
I was aware that preventative healthcare could reduce the likelihood of my family getting another phone call. So, five years ago, I joined Copeman Healthcare as a client. The culmination of my fantastic experience with Copeman, my age and previous years of experience in the healthcare industry were what inspired me. I felt so strongly about the value of prevention, that shortly thereafter, I became a Copeman Healthcare employee.
For 30 years, I had worked with tier-one pharmaceutical companies, getting immersed daily within the Canadian public healthcare system and developing a broad appreciation for its strengths and limitations. This experience led me to conclude that our system needed a much stronger focus on preventative health.
Fortunately, with some digging, I found that there are a number of cost-saving tools to help both organizations and individuals participate in preventative health programs in a cost-effective manner.
One such tool is the healthcare spending account (HCSA). The Canada Revenue Agency (CRA) allows organizations and their employees to use these accounts to spend their money on the health issues that matter most to them.
Let me explain. In a typical extended benefits plan, the health benefits include limited sums of money for a broad spectrum of services. In addition to this plan, many organizations are implementing a healthcare spending account for their employees that allows greater allocation flexibility.
The company assigns an HCSA value for individuals, and allows employees to submit receipts for eligible expenses. Unlike traditional health benefits, the healthcare spending account has the added benefit that it is not taxable to the individual. The corporation ends up paying a tax of 19 per cent, compared to the individual tax rate that could be as high as 39 per cent. Corporations can deduct that payment as an expense to reduce their overall tax burden.
In a similar fashion, another type of account which offers even more flexibility is the private health services plan (PHSP). The depth and breadth of activities that qualify for inclusion in this type of plan is exhaustive, whereas CRA has identified certain criteria for the HCSA.
Lets look at a specific example. The PHSP is run through a third-party company which uses incurred expenses to reduce the profitability of the corporation, resulting in lower tax. For example, the employee may incur $100 for physiotherapy, which is paid to the therapist.
The employee brings the receipt to their company, who cuts a cheque for $100, plus a 10 per cent administration fee, payable to the company administering the health expenses.
The company administering the benefits issues a cheque for $100 to the employee. They also issue a receipt to the company the employee works for, for a $100 expense they can deduct from their balance sheet. In this scenario there are tax advantages to both the employer and employee. It’s a wonderful arrangement!
But there are other benefits too. Providing employee access to preventative healthcare is a fantastic tool for talent recruitment and retention within a company. Including partial or full enrollment in a preventative health clinic like Copeman Healthcare as part of the compensation package is an extremely attractive benefit for employees. Last year, several large corporations were able to win huge talent battles by using enrollment at Copeman Healthcare as an incentive to close the deal.
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Leaders who invest in their team’s health, invest in their own health too, as access to programs like those offered at Copeman Healthcare help reduce absenteeism and presenteeism on the job, and in turn, help manage workloads and stress levels.
A final tool that many people are unaware of is the ability to write off every dollar they spend on their health above the threshold of $2109.
While the tools available to you are numerous, the key is to make your health and the health of your employees a priority. I made that decision five years ago, and my family and I have never looked back.