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FAQ

General FAQ

1. What is the cost of the MediDirect® Health, Dental and Wellness Benefit Plan?

2. What expenses are deductible? Can I expense Provincial Health Care Premiums through my MediDirect® plan?

3. As an employee of a business utilizing a MediDirect® plan, is there a way to further tax effectively reduce my medical expenses?

4. What is the maximum annual benefit limit?

5. Can I qualify if my health is poor?

6. Can my dependents be included on my MediDirect® plan?

7. As a smaller business, can I still have benefits normally associated with large business through this plan?

8. What about my employees' privacy?

9. My spouse already has a plan, do I need one myself?

10. After the MediDirect® offices have received my claim, how soon can I expect reimbursement?

11. What is the time limit to file a claim?

12. What is an Administrative Services Only (ASO)?

13. Can I claim my health club membership or expensive running shoes through my MediDirect® plan?

14. What happens if one of my family members is diagnosed with a terminal illness or is in a serious accident, how much coverage do I have?

15. My current group benefit plan provides for disability insurance, critical illness insurance and travel coverage. Are these part of the MediDirect® plan?

Accountant FAQ

1. What are the taxation rules governing the MediDirect® plan?

2. What if all the employees are also shareholders and we have no other employees. Do we qualify?

3. Is there a maximum annual benefit limit with the MediDirect® plan?

4. Is there a dollar limit that the company may reimburse the employees through the MediDirect® plan?

5. Do I have to provide the same amount of benefit to all my employees?

6. As an employee of a business utilizing a MediDirect® plan, is there a way to be provided additional coverage?

7. What expenses qualify for reimbursement with the MediDirect® plan?

8. Are items such as health club memberships or expensive running shoes an "eligible expense"?

9. What are the benefits of using the MediDirect® plan?

10. How long does the employer hold employee benefit information?

11. How long does the employer hold employees' submitted claims and receipts?

Sole Proprietor FAQ

1. I operate my business as a sole proprietorship. Can I deduct the claims I make for my family and myself through the MediDirect® plan?

 

 


General FAQ

1. What is the cost of the MediDirect® Health, Dental and Wellness Benefit Plan?

There is a one time Company set-up fee of $250.00 plus applicable taxes. Each employee added to the plan is $25.00 plus taxes. Following that, there are no monthly premiums. The company pays only for the medical, dental and wellness expenses incurred by the business owner, employees and their families. If there are no expenses, there is no cost.

A 10% tax deductible administration fee is applied to each claim processed plus applicable taxes. Taxes are not applied to the medical claim amount except in the case of Ontario employers.

All fees are tax deductible to the business.

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2. What expenses are deductible? Can I expense Provincial Health Care Premiums through my MediDirect® plan?

All expenses which normally qualify as a medical expense under the relevant provisions of the Canadian Income Tax Act, which encompasses a very broad range of services, are deductible. A more complete list is contained under our page on coverage.

Provincial Health Care premiums CANNOT be expensed through your MediDirect® plan. However, premiums that an employee or their spouse pay towards private, extended health and dental plans can be reimbursed through the MediDirect® plan.

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3. As an employee of a business utilizing a MediDirect® plan, is there a way to further tax effectively reduce my medical expenses?

Yes. Please refer to our Compensation and Benefit Plan, which is unique to MediDirect®.

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4. What is the maximum annual benefit limit?

Incorporated companies and organizations are permitted to set their own reasonable maximum annual limits. Sole Proprietorships have an imposed maximum annual limit. Refer to our website's page on Eligibility, or call the MediDirect® offices for details.

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5. Can I qualify if my health is poor?

Unlike many insurance based programs, the MediDirect® plans do not have health qualifications. In fact, people who have a pre-existing condition or those who require greater amounts of medical services and supplies may benefit the most from a MediDirect® plan. There are no exclusions due to pre-existing conditions, no deductibles to consider, and the employee is free to seek alternative treatments that are not normally covered under an insurance based program.

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6. Can my dependents be included on my MediDirect® plan?

The spouse and dependent children of the business owner and the employees may all be included. A dependent child is defined as: (a) an unmarried child under age 21; (b) an unmarried child under age 25 if attending a post-secondary institution on a full-time basis; or (c) an unmarried child who is incapable of supporting himself because of a mental or physical handicap.

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7. As a smaller business, can I still have benefits normally associated with large business through this plan?

Yes. Any MediDirect® plan is effectively a reimbursement service for the employer no matter how large or small your business may be.

Incorporated companies and organizations are permitted to set their own reasonable maximum annual limits. Sole Proprietorships have an imposed maximum annual limit. Refer to our website's page on Eligibility, or call the MediDirect® offices for details.

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8. What about my employees' privacy?

Employees submit their claim forms and receipts directly to the MediDirect® offices to ensure their privacy. Personal information will not be provided to any third party. Access to personal information is restricted to only those employees of MediDirect® who are responsible for administration, the Privacy Officer of MediDirect®, or any other person(s) whom you authorize.

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9. My spouse already has a plan, do I need one myself?

Many people may be covered by a spousal plan. However, such plans often prohibit therapeutic, wellness or complementary medical services or only pay a small portion of the total expense. Now there is a way to avoid additional billing that you currently pay with after tax dollars.

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10. After the MediDirect® offices have received my claim, how soon can I expect reimbursement?

MediDirect® issues the reimbursement to the Employee within 5 business days upon receipt of the claim and payment by their Employer.

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11. What is the time limit to file a claim?

Employees should submit claims within three months of the business year end.

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12. What is an Administrative Services Only (ASO)?

An ASO is similar to a Health Spending Account in that it is a Private Health Services Plan (a self-insured, or self-funded plan) set up by the employer and administered by MediDirect®. The difference is that an ASO gives the employer the ability to manage benefit costs by specifying certain restrictions and limitations on coverages. Effectively, it provides coverage similar to insurance company plans, but at a much lower cost for the same coverage and allows the employer to change coverage at anytime.

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13. Can I claim my health club membership or expensive running shoes through my MediDirect® plan?

A popular new option within a MediDirect® Health, Dental and Wellness Plan is a combined HSA and Wellness Account. One portion of the HSA is allotted to medical, dental or wellness expenses which are reimbursed as non-taxable benefits. The other portion is paid on a "wellness account", which is intended for expenses such as fitness club memberships, golf memberships or athletic footwear. These expenses are reimbursed to the employee but are a taxable benefit.

MediDirect® provides administration and adjudication of claims, determines whether the expenses are non-taxable or taxable, and provides full accounting to the corporation at year-end.

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14. What happens if one of my family members is diagnosed with a terminal illness or is in a serious accident, how much coverage do I have?

Your MediDirect® health spending account only covers expenses up to the limit funded by the employer and is not an insurance plan. We encourage each employee to have their own private health insurance to insure against these unpredictable medical costs that could leave them with expensive medical bills that cannot be covered under the MediDirect® plan alone. The premiums for private health insurance are an eligible expense under the MediDirect® plan.

Risk of unpredictable medical expenses (while at home or when travelling) can be assumed through the MediDirect® Catastrophic Insurance for a very reasonable cost. Loss of income due to accident or injury can be insured with our optional Disability Insurance. Any of these products can also be combined with our Critical Illness Insurance to cover these unpredictable costs.

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15. My current group benefit plan provides for disability insurance, critical illness insurance and travel coverage. Are these part of the MediDirect® plan?

Yes, we can customize a benefits plan for each corporation or each employee to their desired coverages. Please refer to our Insurance Options page for more information on optional insurances.

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Accountant FAQ

1. What are the taxation rules governing the MediDirect® plan?

The MediDirect® plan qualifies as a Private Health Services Plan ("PHSP"). The funds paid to a PHSP by an employer are business expenses deductible against business income. The amounts are non-taxable benefits to the employees. The employer must have an obligation under the employment contract to reimburse the eligible medical expenses of its employees. This obligation can be implied by signing up with MediDirect® Inc.

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2. What if all the employees are also shareholders and we have no other employees. Do we qualify?

Yes, if the plan is made available to all employees who are also shareholders and it is demonstrated that they are receiving the benefits as an employee.

Small business owners should be careful in setting up a cost-plus plan that excludes non-shareholder employees. A cost-plus plan for a majority shareholder and principal employee of a corporation that excludes non-shareholder employees should be carefully planned to meet tax deductible eligibility status. We strongly urge anyone setting up a plan that excludes non-shareholder employees to discuss with a tax expert to obtain proper documentation.

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3. Is there a maximum annual benefit limit with the MediDirect® plan?

Incorporated companies are permitted to set their own reasonable maximum annual limits, but sole proprietorships have an imposed maximum annual limit of $1,500 for an owner-manager employee, plus $1,500 for their spouse and $750 per child. If the sole proprietorship employs non-owner employees, then the limit for the owner is the greater of the aforementioned limitation or the limit provided to his employees.

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4. Is there a dollar limit that the company may reimburse the employees through the MediDirect® plan?

There is no statutory limit for the amount of medical expenses that can be reimbursed but any expenses must be reasonable in order to be deductible.

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5. Do I have to provide the same amount of benefit to all my employees?

No, you can set different claim limits for different groups within the corporate structure. This limit can be changed yearly.

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6. As an employee of a business utilizing a MediDirect® plan, is there a way to be provided additional coverage?

Yes. Please refer to our Compensation and Benefit Plan, which is unique to MediDirect®.

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7. What expenses qualify for reimbursement with the MediDirect® plan?

The expenses must qualify as "medical expenses" as defined under subsection 118.2(2) of the Income Tax Act, which includes many items not covered by traditional medical and dental insurance coverage. Please refer to the section Eligible Expenses for a more complete list of coverages.

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8. Are items such as health club memberships or expensive running shoes an "eligible expense"?

A popular new option within a MediDirect® Health, Dental and Wellness Plan is a combined HSA and Wellness Account. One portion of the HSA is allotted to medical, dental or wellness expenses which are reimbursed as non-taxable benefits. The other portion is paid on a "wellness account", which is intended for expenses such as fitness club memberships, golf memberships or athletic footwear. These expenses are reimbursed to the employee but are a taxable benefit.

MediDirect® provides administration and adjudication of claims, determines whether the expenses are non-taxable or taxable, and provides full accounting to the corporation at year-end.

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9. What are the benefits of using the MediDirect® plan?

The employer provides tax-free employment benefit to their employees at a lower cost than other plans available. By providing health and dental benefits to their employees, they can improve employee morale and retention.

The employee's medical and dental expenses are reimbursed as a tax-free benefit and they pay no premiums.

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10. How long does the employer hold employee benefit information?

This is regulated under the Employment Standards Act of each province, but for most provinces employment records must be retained for seven years after the employment ends. MediDirect® Inc. holds all employer records for seven years.

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11. How long does the employer hold employees' submitted claims and receipts?

For personal income tax purposes, all receipts must be held for three years from the date the CRA issues their Notice of Assessment. All businesses are required under the Income Tax Act to retain their books and records for seven years. MediDirect® Inc. holds all employer records for seven years.

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Sole Proprietor FAQ

1. I operate my business as a sole proprietorship. Can I deduct the claims I make for my family and myself through the MediDirect® plan?

Yes, you can, provided that over 50% of your total income is derived from the sole proprietorship and you have at least one qualified arm's length employee. The Canada Revenue Agency (CRA) may question whether a deduction is available to a sole proprietor in respect of amounts paid under a Private Health Services Plan if there are no other employees other than the sole proprietor. It is advised that the sole proprietor can demonstrate that they have a qualified arm's length employee working within the business. If you wish further information, please contact MediDirect®. We will discuss appropriate steps needed to properly document your client's health services plan to comply with CRA regulations.

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