What is the Western Life “Health Spending Account”

The Western Life Health Spending Account (HSA) is designed for incorporated and limited companies of all sizes and provides a tax effective way to reimburse medical and dental expenses for your company's employees and their dependents. Through the HSA program, medical and dental reimbursements are provided as a non-taxable benefit to the employee, and the payments qualify as a 100 percent tax-deduction to your corporation. It can be integrated as a stand-alone plan or it can enhance your existing group or individual health and dental benefit coverage. The program is administered and operated by National HealthClaim Corp, a Canadian claims adjudication company.

Can any organization enroll?

Only Canadian incorporated and limited companies may enroll in a Western Life Health Spending Account. This is a requirement established by the Canadian Government and detailed in the Income Tax Act. Additionally, due to various legislative decisions surrounding the taxation of benefits, the Western Life Health Spending Account is not available to businesses located in the province of Quebec.

Do I have to be in good health to participate?

Your current or past health condition does not affect your ability to enroll in the Western Life Health Spending Account. There is no requirement to submit any medical information and there is no age limit.

How does the reimbursement process work?

After the initial set-up of the Western Life Health Spending Account, the process of reimbursement is as easy as 1, 2, 3:

1. The health/dental expense is paid first by the employee who then completes an on-line claim form, prints and signs it, and mails it (along with the original receipts), to National HealthClaim.
2. The employer receives notification of the claim and is directed to “submit funding” using the on-line web site service. A cheque is then submitted to National HealthClaim In-Trust for the total cost of the expense, plus a 12% administration fee (+GST).
3. National HealthClaim adjudicates the claim and mails a reimbursement cheque and statement to the employee. A monthly receipt is made available to the employer using the web site and itemizes all the claims and fees.

Can the plan provide one employee with a greater HSA limit over another employee?

Yes. This can be accommodated only if employees are in different job classifications. According to the CRA, all employees in the same job classification must be given the same benefit level. Different job classifications can be set for:

• Different functional job levels (manager, vs. field worker, vs. admin etc.)
• Different years of service
• Different salary band
• Different geographic regions

The CRA requires that a consistent approach of defining job classification be used.

Compliance with the CRA

An international accounting firm has completed a review of the operational guidelines to which National HealthClaim administrates and adjudicates the Western Life Health Spending Account. It was their opinion that the guidelines National HealthClaim follows qualify it as a Private Health Services Plan as defined in subsection 248 (1) of the Income Tax Act. This opinion letter is available for the professional accountant by clicking on the PROFESSIONAL ADVISORS tab above and submitting an email.

National HealthClaim’s role

National HealthClaim is responsible for the following:

1. The creation and administration of an indemnity contract for your company that complies with the Canadian Customs and Revenue Agency as a contract of insurance.
2. Adjudication and reimbursement of claims (arms-length third party administrator) to ensure that the medical or dental expenses qualify under subsection 118.2(2) of the Income Tax Act.