Cost Plus

Have you ever wished for a medical or dental plan that you could control, or that would pay expenses not covered/limited under a regular group insurance contract, such as the 50% of your children's orthodontics bill, or the laser eye surgery you plan to have? The Cost Plus Plan may be a solution for you!

Your office contracts with CPA Insurance Plans West ("CPAIPW") to reimburse employees' medical expenses that are within the annual limit set in the contract. In return, your organization pays CPAIPW the amount of the eligible claims, plus a fixed fee (that's the plus!).

For a claim to be eligible, the expenses that are submitted must be medically necessary (not cosmetic) health or dental claims that would qualify as a "medical expense", as defined in subsection 118.2(2) of the Income Tax Act, for the medical expense tax credit available to individuals.

Should you like more information on expenses that may qualify, kindly follow the link to the CRA's website for a non-exhaustive list of possible expenses:

Medical Expense Claims Resource

This plan is designed to qualify as a Private Health Services Plan for income tax purposes. Under such a plan, where the expense is reasonable, the business's payment to CPAIPW may be a tax deductible expense to the business and, where applicable, the payment by CPAIPW to the employee (or medical practitioner) should not be taxable income or a taxable benefit, nor should it attract any other statutory benefits such as CPP or EI.

As the plan must be a "contract of insurance" for the payments to qualify, "self-insured" arrangements will not be eligible.

Please follow the link (coming soon) to download the contract and claim forms for our members.

The tax treatment of the plan depends on many factors. Please follow the link (coming soon) to a memo from our tax advisors at BDO Canada LLP for a more in-depth general overview of the tax treatment. As tax is a complex subject matter, we advise you to speak with your advisors on your specific situation.

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