The Health Care Spending Account is an individual account that provides reimbursement to the employee for health care and dental expenses not covered by the provincial health plan or the organisation's group insurance plan of the employer.
These accounts may be structured on a stand-alone basis or may simply be presented as another option of the overall benefit program.
The covered expenses include the deductibles and coinsurance amounts as well as amounts in excess of benefit maximum, all of which would otherwise be out-of-pocket expenses for the employee. The Canada Revenue Agency defines which expenses are eligible for reimbursement under the Health Care Spending Account.
Below is a partial list of eligible expenses:
- Professional services;
- Dental care;
- Eye examinations and eye wear;
- Medical equipment and devices.
Most plans are funded by employer contributions. Often an employer will deposit a fixed amount, for example, $500 in each employee’s account per year. Depending on the plan design, the amount may be forfeited if not used within the year or carried over to the following year.