Private Health Services Plan, PHSP
How Does It Work

PHSP for Incorporated Business (Inc., Ltd., Professional, etc.)

Contribution and reimbursement limit for incorporated business with PHSP virtually does not exist. You can set up the PHSP to cover up to 100% of medical expenses virtually with unlimited ceiling. For example:

Small business owner has agreed to fund a PHSP for his employees for up to $3,000 a year per employee. An employee, or any family member, visits a health practitioner and pays for an out-of-pocket medical expense (dental, prescription drugs, eyeglasses, special therapy, etc.). Than they submit their receipts to a NeoPlan PHSP administrator. PHSP administrator adjudicates the claims making sure it's legitimate and that the expense falls within the limit funded by the business. Once it's approved, PHSP administrator sends an invoice to the company and once fulfilled send the cheque to the claimant for the entire amount (up to $3,000 per employee per year, in this case). The claimant gets all their medical expenses covered on a tax-free basis (premium is not included in claimant payroll for tax purposes). And the business gets a 100% tax deductible expenses in accordance with Tax Act.


PHSP for Non-Incorporated Business (Self-Employed, Sole Proprietorship, Partnership)

Clearly when it somes to PHSP non-incorporated businesses have some limitations, but it won't stop you from utilizing eligible benefits.

PHSP for Self-employed individual

You are limited by PHSP deductible amount, aka amount from your income based on the number of dependents you have. For example:

- $1,500 for you
- $1,500 for your spouse (or common-law partner)
- $1,500 for any household members who are 18 years of age and older
- $750 for dependent children under the age of 18

and is prorated for the number of days the person was insured.

Legislation is also saying that if you are a sole proprietor, you must derive at least 50% of your income from the business, or have to make a total of $10,000 from other sources of income and must be actively engaged in your business on a regular and continuous basis to be eligible.

*See CRA Guide to Business and Professional Income (T4002). T4002 Guide.

PHSP for Self-employed business (with employees)

Rule of thumb is to provide the PHSP coverage to yourself, and the members of your family, not more then you provide to your employees. This is how CRA allow deductions for preferential tax treatment. For examle:

- $3,500 for yourself
- $3,500 for your spouse (or common-law partner)
- $3,500 for John Doe, as an employee and his family members

and is prorated for the number of days the person was insured.

Legislation is also saying that if you are a sole proprietor, you must derive at least 50% of your income from the business, or have to make a total of $10,000 from other sources of income and must be actively engaged in your business on a regular and continuous basis to be eligible.

*See CRA Guide to Business and Professional Income (T4002). T4002 Guide.


How to register for NeoPlan PHSP

To register for one of the NeoPlan PHSP plans please follow the procedure described in Information for Members, see the link at the bottom of the page.



** Disclaimer: The content posted on this website is intended for general information purposes only and is not substitute professional or legal advice.