What is a Health Spending Account?

A Health Spending Account (HSA) lets incorporated small business owners pay for personal health and dental expenses using pre-tax business dollars.

It works like a health expense reimbursement plan—your corporation pays for eligible medical expenses, and the cost becomes a tax-deductible business expense. The reimbursement is tax-free to you.

Why It’s Ideal for Small Business Owners:

• 100% tax-deductible to your business

• Tax-free benefits for you

• More flexible than traditional insurance

• No monthly premiums

What you need to Setup:

To setup a Health Spending Account, you need to either have a Corporation which you are an employee (drawing T4 or taxable income), or be a Sole Proprietor with at least one arms length employee.  This would be an employee who is not related to you.