What is an enVia Health Spending Account (eHSA)?
It is a “Health Spending Account”, a vehicle permitted under the Income Tax Act as a “private health services plan” (IT-339R2) that enables “employers” (including the incorporated self-employed and sole proprietors) to cover participants’ eligible medical and dental expenses as defined under Section 118.2 (2) of the Act. The net funds contributed (after the administration fee) may be used to pay for any eligible medical or dental expense. The eHSA operates on a “Policy Year” basis, i.e. 12 months from the effective date it will renew. Prior to the start of each policy year the “employer” determines how much to contribute for the following policy year. It is not an “insurance plan”, rather a unique tax sheltered vehicle that individuals may utilize to control the cost of medical and dental benefits. “Employees” cannot contribute directly to the eHSA per CRA rules and that is why contributions must be made by an “employer”.
