What is an Health Spending Account (HSA)?
HSA is a savings account for your health services. The employer designates a dollar amount that each employee may use on any CRA (Canada Revenue Agency) eligible health and/or dental expenses. The amount designated is the maximum amount that each employee may spend in a one year period. The employer knows in advance the maximum potential cost. Expenses put through the HSA are deductible to the employer and are not considered a taxable benefit to the employee. At the beginning of each year, the maximum amount starts again. Employers have the option to offer a “carry forward”, which would allow funds that were not used in a particular year to carry forward to the following year as shown in the example below. If there are still unused amounts at the end of the second year, the money will be refunded to the employer. Please note that refunds are considered taxable income to the employer upon return, as the employer would have received a business deduction the year prior. Example: Annual Li
