Health Spending Accounts are an effective method for employers to provide employees with a high level of involvement and flexibility in their employee benefit plan.  HSAs are individual accounts established for each employee.  The employer deposits an amount for each employee and the employee can draw on the account by submitting qualifying expenses that are not insured under Extended Health or Dental Benefits.

Canada Customs and Revenue determine which types of claims are eligible. Types of expenses can include, but are not limited to: deductibles and coinsurance amounts, expenses that exceed group insurance plan maximums, eye glasses, medications, vaccines, and dental work such as implants and orthodontics.

Health Spending Accounts can be a cost-effective way to fund medical and dental expenses that can be anticipated to recur each year.  The employer's contribution to the account is not taxable to the employee but is deductible by the employer, making it tax-effective.

Most carriers offers HSA plans either as a supplement to Extended Health and Dental Benefits or as stand-alone plans.  Employers designate, on an annual basis, an amount to be contributed on behalf of each eligible member.  The amount can be a flat-dollar amount, a percentage of salary, or based on some other factor such as years of service.  It must be determined prior to the beginning of the plan year and is then fixed for the year.