Health & Wellness Spending Accounts

Employers are always looking for ways to help retain good employees or attract new ones; Health and Wellness spending account are a great option. Traditional Health Care Spending Accounts (HCSAs) have been around for many years as an enhancement to a core benefit plan, but the flexibility of Wellness Spending Accounts (WSAs) is relatively new for a number of reasons: an increased emphasis on employees' health, fitness and general well-being; a push for better and more flexible options within their benefit plan designs; the move towards more fixed spending on benefits and the introduction of smartphone technology to administer and submit claims.
 
HFI Benefits uses our QubeFlex 2.0 add-on to administer flexible benefits for our clients; employers simply determine the employee classes they want to use and how much money per class that they want to allocate; for example, single employees (which could be employees who are not married or have dependents) may be given 300 credits, while family employees (employees who are married or have dependents) would get 500 credits. At the beginning of each plan year, using a web application, employees need simply decide which amount of benefit credits (dollars) they would like allocated to each spending account category. An employee's allocations cannot be changed within the plan year unless there has been a ‘life changing status change’; this CRA guideline provides an element of insurance risk so claims can be treated preferentially from a tax perspective.
 
There is also a specific list of non-taxable HSA eligible claim categories on the CRA website
 
Although Health and Wellness spending accounts are offered by most traditional group insurers, many have group size restrictions before they’ll allow them to be added to a traditional insured benefit plan; depending on the insurer, the restrictions are as high as 25, 50, or even more required employees on the policy. It is for these reasons and more why HFIB prefers to use QubeFlex 2.0 as our primary Health and Wellness Spending Account option: QubeFlex 2.0 can be added on to ANY benefit plan.
 
Q: Do company’s need to have a traditional core insurance plan in place in order to set-up a Health & Wellness spending account?

A: For a traditional group insurer’s spending account, yes; for QubeFlex 2.0, NO.

Q: Are all claims under a Health & Wellness tax deductible for the employer?

A: In general yes; however, wellness claims are a taxable benefit and must be declared that way on their respective employee’s annual T-4’s.