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HealthCare Spending Account Details

A HealthCare Spending Account is a provision within the Canadian Tax Act that allows companies to pay for employee's Health and Dental expenses up to specified limits. The details about how much an employee can receive is at the discretion of the Company.

Eligible Expenses

The list of eligible expenses is extensive and covers most health and dental procedures or supplies. There are some exceptions but in general the item is eligible if prescribed / performed by a registered medical practitioner or dispensed by a pharmacists or optician.

Annual Limits

The annual limit established by the company for each "category" of employee is the total amount of possible reimbursement based on claims made by the employee. The annual time period can be any 12 month cycle and is more commonly known as the "Benefit Year". An employee has the entire year PLUS a few weeks into the next year to get their claims in for processing. The period of time into the next benefit year is called the "Runoff Period" and varies from 30 to 90 days, depending the company's settings.

Options for unused limits

There are three options a company can choose from in handling an employee's unused credits at the end of each year. This is setup at initial enrollment but it can be changed by contacting National HealthClaim directly. Only one rule can be applied to the company.

  • Credit Carry Forward is commonly used and simply allows unused credits to carry into the next benefit year. Only one year's worth can carry forward.
  • Expense Carry Forward allows "old" receipts from the previous benefit year to be claimed in the current benefit year.