Frequently Asked Questions
|Is this a legitimate tax deduction program?
Yes. The tax bulletins from Revenue Canada make
it very clear that a Cost Plus program falls under the definition of a
Private Health Services Plan.
The tax treatment for a Private Health
Services Plan is also well defined. The Government intent is to allow
small business to have the same access to tax effective health care programs
as large Employers
|Are you saying that I don't need Insurance?
No! Insurance is an essential component of your entire
financial picture. However, insurance works best for you when the probability
of claims occurrence is low, but the financial impact is high, (For
example; Life insurance,
fire insurance etc).
Insurance is not as important when the probability
of claims occurrence is high, but the financial impact is relatively low
(For example Health, dental,
medical etc.) This is because of how insurance works.
|Insurance companies operate by spreading the risk over
a large group of people, with relatively few claims. In that way they
can keep premiums at a reasonable cost, while still providing coverage
for the few (How often have you claimed against your fire insurance policy
| Medical costs, however, are the exact opposite. There is a very high
rate of claims, therefore, to stay in business and cover its costs, the
Insurance company has to limit its total exposure to each claim AND charge
a fairly high premium.|
In Canada, where core medical expenses are covered by
provincial health care insurance (eg OHIP), buying an additional
insurance program for health care may not be the most cost effective way to cover additional medical costs.
In most cases, a Cost Plus plan will offer better value
|What if I am already covered under my spouse's employer
It is still worthwhile to enroll in the HealthPlus Cost
Plus plan. For reasons mentioned above, there are almost certainly deductibles,
limits and exclusions from the employer plan, and these have to be paid
by the employee. The Cost Plus plan will let you claim those costs, and
receive a tax deduction that you would not normally have received. You
really have nothing to lose. For a nominal annual registration fee, you
can set up the plan and you only use it when you have expenses to claim
|What kind of expenses can I claim?|
The Income Tax has a very broad definition of what is considered a
legitimate health care expense. It is not possible to list everything here,
but generally speaking any expense for items such as Drugs, Vision care,
Dental, medical etc. would be covered. Other expenses such as counseling,
nursing care, Chiropractor, Massage therapy, laser eye surgery would also be