When answering common or frequently asked questions on Health Savings Accounts (HSA), the first question is what is HSA? We will begin with this question and then continue to answer common questions that will help you understand why and how HSA is beneficial for you.
- What is HSA?
A Health Spending Account (HSA) is an individual employee account that provides reimbursement for eligible health care expenses or other benefits that are not covered under provincial health insurance plans or other benefit plans sponsored by the employer.
An HSA is an inexpensive way for employers and sole proprietors to offer tax-free health benefits to employees, their dependents and themselves.
- What qualified medical expenses are covered under HSA?
The CRA maintains a guide and a list of medical expenses (PDF) on the Canada Revenue Agency website2. Medical expenses that meet CRA’s definition are typically reimbursable (in whole or in part) from a plan member’s HCSA.
However, this CRA list is not a complete list and it is important to confirm expenses are covered by your plan.
- What happens to my unused HSA funds?
The employer has these options for handling unused funds and/or expenses at the end of the year:
1 . Employers choose to allow/disallow any unused funds or unused expenses to roll over into the next plan year.
2 . If rollover of unused funds is not permitted, the funds will be forfeited and returned to the employer.
3 . If an employer allows unused funds to rollover to the next plan year, they can set a maximum rollover amount with the condition that any unused funds will be forfeited and returned to the employer at the end of year two - funds can't be carried over perpetually.
We are here to guide and assist you on any queries related to your Health Savings Account. Feel free to leave your questions or comments.
Disclaimer: The information provided in this blog or any linked material is not intended and should not be considered a substitute for medical advice, diagnosis, or treatment. For holistic health advice and consultation, visit My Well Self.
