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Private Health Service Plan (PHSP)
(also known as
Health Spending Account)

A Health Spending Account (HSA), a PHSP, is set up by the employer and administered by MediDirect®. It provides reimbursement to the employee or business owner for all health, dental and wellness expenses for themselves and their families, without health pre-qualification, limitations or restrictions. Please see "Eligible Expenses" below. Medical expenses are a 100% business deduction and the employee receives a tax free benefit.

To be eligible as a PHSP, Canada Revenue Agency has certain requirements that must be met. A PHSP must have a component of "put at risk" in the Plan. That is, there must be a component of payment (premium) that can be lost if not used. The MediDirect PHSP has that component. Call us to discuss.

An HSA/PHSP is a self-insured, or self-funded plan, in which the employer is responsible for providing health care benefits to its employees up to a pre-determined dollar value. There is no insurance involved in the self-funded portion of the plan.

Eligible Expenses

A Health Spending Account permits all allowable expenses that qualify as medical expenses pursuant to Section 118.2(2) of the Income Tax Act. The following is a partial list of eligible expenses:

Insurance Premiums

  • Private health insurance premiums, such as Blue Cross premiums, that an employee or their spouse, pays towards an extended health and dental plan are eligible medical expenses.
  • Provincial Health Care premiums are not an eligible expense.

Professional Services

100% coverage for professional services, procedures and prescribed medications and treatments and equipment of:

  • Acupuncturist
  • Chiropodist
  • Chiropractor
  • Christian Science Practitioner
  • Dental Hygienist
  • Dental Mechanic
  • Dentist
  • Dermatologist
  • Dietician
  • Fertility and In Vitro Fertilization
  • Gynaecologist
  • Homeopath
  • Massage Therapist (Licensed)
  • Midwife
  • Neurologist
  • Naturopathic Doctor and Specialists
  • Obstetrician
  • Oculist
  • Occupational Therapist
  • Optician
  • Optometrist
  • Orthopaedist
  • Osteopath
  • Out-of-country medical care (including reasonable travel, lodging and meal expenses for patient and travelling companion)
  • Paediatrician
  • Physician
  • Physiotherapist
  • Plastic surgeon
  • Podiatrist
  • Practical Nurse (medical services only)
  • Psychiatrist
  • Psychoanalyst
  • Psychologist
  • Professional tutor, for a patient with learning disability or mental impairment, if the need is certified by a medical practitioner
  • Radiologist
  • Registered Nurse
  • Surgeon
  • Speech Therapist (pathological or audio impediments only)
  • Therapist

Laboratory Examinations and Tests

  • Blood tests
  • Cardiographs
  • Metabolism tests
  • Spinal fluid tests
  • Stool examination
  • Urine analyses
  • X-ray examinations

Dental Services

  • Dental X-rays
  • Dentures
  • Examinations
  • Extracting teeth
  • Filling teeth
  • Gum treatment
  • Oral surgery
  • Straightening teeth

Hospital Services

  • Anaesthetist
  • Hospital bills
  • Oxygen masks, tent
  • Use of operating room
  • Vaccines
  • X-ray technician

Medicines

  • Cost of prescriptions
  • Insulin or substitutes
  • Tapes or tablets for sugar content tests by diabetics, if the procedure has been required by a physician
  • Oxygen
  • Liver extract - injectable for pernicious anaemia
  • Vitamin B12 - for pernicious anaemia
  • Any medicine or drug purchased by you, your spouse or a dependant, as prescribed by a medical practitioner or dentist and as recorded by a licensed pharmacist.

Apparatus and Materials (and repairs thereto and replacement batteries)

* Note that all items prescribed by regulation, as indicated by an asterisk ( *) below, must be prescribed by a medical practitioner.

  • Artificial eye
  • Artificial kidney machine, including reasonable installation, home alteration and operating costs
  • Artificial limb
  • Blood sugar level measuring devices for diabetics
  • Brace for a limb
  • Catheters, catheter trays, tubing, or other products required by persons who are incontinent by virtue of illness, injury, or affliction
  • Colostomy pads
  • Contact lenses - prescribed
  • Crutches
  • Diapers, disposable briefs, catheters, catheter trays, tubing, or other products required by persons who are incontinent by virtue of illness, injury, or affliction
  • Eye glasses - prescribed
  • Heart monitoring or pacing devices *
  • Hospital bed if required in home *
  • Infusion pumps, including disposable peripherals, used in the treatment of diabetes *
  • Iron lung
  • Iliostomy pads
  • Laryngeal speaking aid
  • Needles and syringes *
  • Orthopaedic shoes and boots *
  • Oxygen tent and equipment *
  • Rocking bed for polio victim
  • Spinal brace
  • Truss for hernia
  • Wheelchair
  • Wigs made for individuals who have suffered abnormal hair loss owing to disease, accident or medical treatment *
  • Any apparatus or material - where payment was made directly to a doctor, dentist, nurse or hospital
  • Any device, including replacement parts, designed exclusively for use by an individual who is suffering from a chronic respiratory ailment or a severe chronic immune system disregulation *
  • Air or water filter or purifier for use by an individual who is suffering from severe chronic respiratory ailment or a severe chronic immune system disregulation to cope with or overcome that ailment or disregulation *
  • Electric or sealed combustion furnace acquired to replace a furnace that is neither an electric furnace nor a sealed combustion furnace, where the replacement is necessary solely because of a severe chronic respiratory ailment or a severe chronic immune system disregulation *
  • 50% of the cost of an air conditioner prescribed by a medical practitioner for an individual with a severe chronic ailment, disease or disorder, to a limit of $1,000 *
  • Any power-operated guided chair installation to be used solely in a stairway *
  • Power-operated lifts or transportation equipment designed exclusively for use by or for a disabled individual to allow the individual access to different areas of a building or to assist the individual to gain access to a vehicle or to place his or her wheelchair in or on a vehicle *
  • Reasonable expenses relating to renovations or alterations to a dwelling of a patient who lacks normal physical development or has a severe and prolonged mobility impairment (one that may be expected to last 12 months or more), to enable the patient to gain access to, or to be mobile or functional within, the dwelling
  • Reasonable incremental costs relating to the construction of the principal place of residence of a patient who lacks normal physical development or has a severe and prolonged mobility impairment (one that may be expected to last 12 months or more), incurred to enable the patient to gain access to, or to be mobile or functional within, the dwelling
  • Reasonable expenses relating to alterations to the driveway of the principal place of residence of a patient who has a severe and prolonged mobility impairment, to facilitate the patient’s access to a bus
  • Reasonable moving expenses (not to exceed $2,000) of a patient who lacks normal physical development or has a severe and prolonged mobility impairment if incurred for moving to a dwelling more accessible by the patient or in which the patient is more mobile and functional (restricted by the rules governing deduction of moving expenses)
  • Any device designed to assist a person to enter or leave a bathtub or shower, or to get on or off a toilet *
  • A hospital bed including any prescribed attachments *
  • Any device designed to assist an individual in walking where the individual has a mobility impairment *
  • Devices designed exclusively to enable an individual with a mobility impairment to operate a vehicle *
  • The lesser of $5,000 and 20% of the cost of a van (minus any portion of the cost for which credit is claimed under the rule above) that, at the time of acquisition or within six months thereafter, has been adapted for the transportation of the patient, who must require the use of a wheelchair
  • An external breast prosthesis that is required because of a mastectomy *
  • Any device to aid the hearing of a deaf person including bone-conduction telephone receivers, extra-loud audible signals and devices to permit volume adjustment of telephone equipment above normal levels
  • Television closed caption decoders for the deaf *
  • Sign language interpretation services, where the payment is made to a person engaged in the business of providing such services on behalf of a patient who has a speech or hearing impairment
  • Any equipment and accessory that enables a deaf or mute person to make and receive telephone calls including visual ringing indicators, acoustic couplers, teletypewriters. Amounts paid in providing additional equipment and accessories to others in order to make telephone communication possible with those other persons are also allowed as medical expenses. *
  • Electronic speech synthesizers that enable mute individuals to communicate using a portable keyboard *
  • Optical scanners or similar devices designed to be used by a blind individual to enable him to read print *
  • Synthetic speech systems, Braille printers and large print-on-screen devices that enable blind persons to utilize computers *
  • Monitors which can be attached to babies identified as being prone to sudden infant death syndrome and which sound an alarm when the baby stops breathing *
  • Electronic or computerized environmental control systems designed exclusively for the use of an individual with severe and prolonged mobility restrictions *
  • Extremity pumps or elastic support hose designed exclusively to reduce swelling caused by lymphedema *
  • Inductive coupling osteogenesis stimulator for treating non-union of fractures or aiding in bone fusion *
  • Medical Treatments - If Prescribed
  • Blood transfusion
  • Diathermy
  • Electric shock treatments
  • Healing services
  • Hydrotherapy
  • Injections
  • Insulin treatments
  • Nursing (by registered nurse)
  • Pre-natal post-natal treatments
  • Psychotherapy
  • Radium therapy
  • Speech pathology or audiology
  • Transplants: for 1988 and later years, on behalf of a patient who requires a bone marrow or organ transplant, the reasonable costs of locating a compatible donor and arranging for the transplant, including legal fees and insurance premiums and reasonable traveling, board and lodging expenses for the donor and a companion as well as the recipient and a companion incurred in respect of the transplant
  • Ultra-violet ray treatments
  • X-ray treatments

Miscellaneous

  • Cosmetic surgery if medically required
  • Laser eye surgery
  • Fertility treatments and in vitro fertilization
  • Ambulance charges - to or from hospital
  • Transportation costs – to or from hospital, clinic or doctor’s office to obtain services if further than 40 kilometers one way
  • Transportation, meal and accommodations (reasonable expenses for meals, accommodation and travel costs for patient and an accompanying attendant) may be deductible
  • Costs associated with disabilities (learning and physical disabilities)
  • For persons with diagnosed Celiac disease, the cost difference between gluten free food and foods containing gluten. Documentation of this cost difference must be provided; please call for specific details and instruction.
  • Canadian Red Cross - Home Maker Service
  • Prescription birth control pills
  • Victorian Order of Nurses - home care
  • Premium paid to a non-government medical or hospital care plan
  • Reasonable expenses relating to rehabilitative therapy, including training in lip reading and sign language, if incurred to adjust for the patient’s loss of hearing or speech
  • The cost of an animal specially trained to assist a person who is blind, deaf, or severely impaired in the use of arms or legs. In addition to the cost of the animal, its care and maintenance (including food and veterinary care) are eligible expenses, as are travel expenses to a training facility to learn how to handle the animal, and, if full-time attendance at the training facility is required, reasonable board and lodging incurred in the full-time attendance. Note that prior to 1990 this provision was limited to expenses for guide dogs for the blind and deaf
  • Hydraulic wheelchair lifts for a vehicle that has been prescribed by a qualified medical practitioner
  • Reasonable expenses (other than amounts paid to your spouse or to a person under 18) to train you or a person related to you if the training relates to the physical or mental infirmity of a person who is related to you and is either (i) a member of your household or (ii) dependent on you for support

* Note that all items prescribed by regulation, as indicated by an asterisk ( *) above, must be prescribed by a medical practitioner, whereas those items not so indicated need only be prescribed if the statute so requires (which it only occasionally does, as indicated).