| Cost-Plus Health & Dental Claims allow individuals to claim for eligible health or dental expenses not covered by the EHC or Dental benefits under the standard insured Program on a 100% tax-deductible basis (subject to CCRA limits for sole proprietors). Cost-Plus Health & Dental Claims are available to:
- Self-employed entrepreneurs
- independent contractors
- owner/operators
- sole-proprietors and
- business owners insured under Menuflex™ Individual Program only
Cost-Plus is not available on a standalone basis.
Cost–Plus is available as part of your Extended Health Care (EHC) or EHC and Dental benefits under the Menuflex Benefits Program™, with no additional monthly premium or contractual agreements to complete. Examples of Eligible Expenses include: - Cosmetic surgery
- Counseling services – Psychologist fees, Social workers beyond plan limits
- Co-insurance
amounts (e.g. the 20% paid by the individual for Dental)
- Dental expenses – Cosmetic Dentistry, Major Restorative or Orthodontia
- Fertility expenses
- Laser eye surgery
- Vision Care – Contacts, Glasses
- Smoking Cessation Drugs/Products
- Sexual Dysfunction Drugs – e.g. Viagra
- Vehicle modification to help a disabled person
Revenue Canada defines eligible medical expenses (in Section 118.2(2) of the Income Tax Act) as those that can be covered under a qualified "Private Health Services Plan". Premiums for such a plan are deductible for tax purposes (under Income Tax Act Section 18(1)(a)), and the reimbursement to an employee for those services is considered to be a non-taxable benefit in accordance with Interpretation
Bulletin 339R2 dated August 8, 1989, which reads as follows:
"Under a Cost-Plus plan an employer contracts with a trusteed plan or insurance company for the provision of indemnification of employees' claims on defined risks under the plan. The employer promises to reimburse the cost of such claims plus an administration fee to the plan or the insurance company…. Provided that the risks to be indemnified
are those described in paragraphs (a) and (b) of the definition of "private health services plan" in subsection 248(1), such a plan qualifies as a private health services plan."
Commencing with the Federal Budget of February 1998, sole proprietors and members of partnerships are allowed to claim their medical and dental insurance premiums as a tax-deductible business expense subject to a maximum of $1,500 for the individual, plus $1,500 for the spouse and $750 for each eligible child
per annum. Owners of incorporated businesses have long been able to deduct the full cost of their health and dental premiums. This change placed sole proprietors and partners almost on an equal footing with an incorporated business.
Cost-Plus allows the excess claim amounts or non-covered items
to be handled on a tax effective basis, as they can be claimed up to amount available after the regular plan premiums for the year have been deducted from the Revenue Canada maximum for sole proprietors/partners. How Cost-Plus Works
Under the
Menuflex™ Cost-Plus arrangement there is no monthly premium. A Cost-Plus Remittance Form is submitted with all applicable receipts to Alternative Benefit Solutions Inc. along with a cheque in an amount equal to the cost of the service plus a handling fee, and GST on the fee.
ABS, on behalf of the insurer, would then send a tax-free benefit cheque to the insured person, and the full cost would be a tax deduction subject to the limits applicable to the sole proprietor and his/her family.
TAKE ADVANTAGE OF THE COST-PLUS ARRANGEMENT TO LOWER BENEFIT COSTS!
For further information call us at 1-866-636-8359 |
Alternative Benefit Solutions Inc.
