How to Find the Best PHSP Provider in Canada?
Private Health Services Plan (PHSP) is a government benefit that offers an excellent health care strategy for self-employed or owners of an incorporated business. If you have a PHSP in Canada, you can claim medical costs and related expenses as a tax deduction. Many companies in Canada provide PHSP to their citizens. Want to expand your knowledge of a PHSP even further? Learn more!
Before finalizing on your PHSP provider, you should consider the following:
Price
While the price is one of the primary factors to consider while choosing a provider, it should not be the only factor. Remember, you get what you pay for. If you buy a plan with a low contribution, the benefits from the plan will be restricted too.
It is important to decide on your budget before purchasing a plan. Every provider charges a one-time setup fee and administration charges (roughly between 5-10%) for processing each claim that arises. A basic Health Spending Account (HSA) doesn’t involve monthly premium payments, but if you choose a plan coupled with additional insurance benefits, you will have to make monthly premium payments as well.
Thus, do a cost-benefit analysis before choosing your provider.
Settlement period
You definitely should consider how much time your provider will take for the settlement of the claims made to them. This can be very crucial especially in times where you would need money urgently in an emergency medical situation.
On average, the time taken for settlement of claims can range anywhere between 24 hours up to 5 business days from approval of the claim. If the provider accepts online submission of claims, you could expect the process of settlement to be faster.
Ease of operation
You get online access to your account with many providers. They also offer instant help for any problems you may come across. They claim to have secure, convenient, and fast settlements through mobile apps and online payments. Some providers offer online registration services too. This can be very convenient.
Many providers even accept scanned copies of medical receipts, which can be uploaded through an app on your mobile. This can be a real-time saver and reduce the time taken for receiving the reimbursement from the provider. Thus, before choosing your PHSP provider make sure that their method of operation is user-friendly.
Additional or hidden costs
Most providers do not claim to have any hidden costs besides the one-time setup fees and admin cost for claim settlement. However, there are some that charge annual fees or a nominal fee for adding employees to the plan benefits.
Besides, if you have opted for a plan that comes with insurance benefits, you will have to pay a monthly premium depending on various factors like the type of risks covered, age of employees covered, etc.
Thus, you should study the provider’s plan carefully and ensure that you are aware of the hidden costs if any.
Claim settlement process
In most of the claim settlement processes, the employee has to first make the payment out of his own pocket. Then he has to send the receipt of the payment made to the provider. The provider then submits the details of the claim to the employer.
The employer will make a payment of the amount claimed to the PSHP provider, using funds from the employer’s funding account. The service provider will then adjudicate the claim, and reimburse by direct deposit the claim amount to the personal bank account of the employee.
You might want to consider the time taken for this process before choosing among the different providers.
Types of plans
PHSP providers offer a range of different products. Right from basic plans that offer just HSA benefits, to bundled options that provide various types of insurance coverage like travel medical insurance, emergency medical insurance, catastrophic drug insurance, etc.
The costs of these plans vary right from $100 as a one-time payment, to $2,479.67 as monthly premiums. Based on your coverage requirements, you can choose a provider that offers a plan suitable for you.
Plan flexibility
The employer is required to fund the plan with a set monthly amount of their choice. Many times, providers give you different options to fund your account. Some of them are as follows:
Pre-funded account
The employer may either deposit a lump sum amount into their HSA account at the beginning of each year or set up a pre-authorized monthly deposit into the account based on the predetermined maximum being provided to employees.
Pay as you go
On receipt of a claim from an employee, the provider will invoice the employer for adequate funds to reimburse the claim amount and cover the administration fee. On receipt from the employer, HUB will reimburse the claim of the employee.
Ad-hoc deposits
Some providers allow the employer to decide the plan year, the maximum benefit for each employee, and what to do with unused benefits. Thus, customize your plan and choose your provider accordingly.
CRA approved
PHSP is established under Canada Revenue Agency rules. A valid HSA plan must conform to Private Health Service Plan rules. Besides, the CRA describes a list of eligible medical expenses that can be claimed as a deduction on the CRA website (www.cra.gc.ca). It contains around 124 different medical and dental treatments.
Thus, make sure that the provider you choose is approved by CRA so that all eligible medical expenses are covered under your plan for reimbursements.
Conclusion
Equip yourself with the best plans which are most beneficial to your employees and help you retain top talent in your organization. Your employees will have access to funds for health spending along with a lack of premiums. The secret to a successful business lies in the satisfaction of its workers.