FAQ
Wellness & Health Spending Accounts
1. Plan Basics / Overview
A Health Spending Account (HSA) is a company-funded account set up by the employer to reimburse employees for eligible medical, dental, and vision expenses. The employer establishes annual benefit limits and determines which expenses are covered and may set limits on specific items, so the plan is tailored to your company’s guidelines.
HSAs reimburse eligible medical and dental expenses. The corporation funds the account, claims are submitted online, and PC Metro adjudicates eligible expenses. Reimbursements are tax-deductible business expenses.
“Incorporated Individual” plans are for a single business owner without employees, while “Business with Staff” plans are for corporations with multiple employees. This distinction affects plan setup, employee classifications, and CRA compliance.
Personal medical expense claims can only be made for expenses exceeding 3% of your net income and provide a non-refundable tax credit, which reduces taxes only partially. In contrast, PHSPs and HSAs are employer-sponsored plans that reimburse eligible medical and dental expenses directly from business income, on a pre-tax, first-dollar basis, maximizing tax efficiency and providing full coverage of eligible expenses
There are no monthly premiums however PC Metro charges an adjudication fee of 10% on the value of reimbursed claims. This fee covers the cost of reviewing and processing claims to ensure they meet plan CRA eligibility requirements.
PHSP / HSA reimbursements are tax-free for employees, so an employee receives the full benefit of eligible medical and dental expenses. For corporations, these reimbursements are deductible business expenses, which can reduce the company’s taxable income and overall taxes.
A WSA promotes overall health and well-being by reimbursing eligible wellness expenses, such as gym memberships, fitness classes, or nutrition programs. Employers fund the account, set custom benefit limits by employee classification, and define which expenses are covered.
Employee and claim information is stored securely, encrypted, and access is limited to authorized personnel to ensure compliance with privacy laws.
2. Eligibility / Employee Classification
Employees receiving T4 income, including shareholders who are also employees, are eligible. Restrictions may apply.
Employee classifications (such as full-time, part-time, or shareholder) are determined by the employer to define benefit levels under the HSA or WSA plan. Properly setting classifications ensures fairness, aligns with CRA rules, and helps manage plan costs. Classifications may also determine eligibility for certain plan features or limits.
Generally, all active employees are eligible unless specified otherwise in the plan.
3. Benefits / Limits / Contributions
Employers set the benefit amount for each employee classification. Guidelines include:
Shareholders must be employees to receive benefits.
Maximum for shareholders: Cannot exceed 10× the lowest-tier employee benefit.
Maximum for shareholders: Cannot exceed 10× the lowest-tier employee benefit.
There is a wide range of CRA-eligible medical expenses that can be reimbursed through a Health Spending Account. These include medical, dental care, vision care, prescription medication, paramedical services, medical devices and much more.
We recommend downloading or bookmarking the official CRA Medical Expense Guide for a complete list of eligible expenses.
Contribution limits depend on plan design, CRA rules, and employee classifications.
Yes! Health Spending Account benefit limits reset automatically on January 1st. This means your spending account starts fresh each year, making it easy to use and track benefits.
Our standard plans do not carry forward unused credits — all benefits must be used within the plan year. Employees have 365 days from the date of each expense to submit claims.
If your organization opts for a benefit carry-forward, unused credits can roll over for up to 12 months into the next plan year. Claims must still be submitted within 365 days of the expense. While this provides flexibility for employees, employers should be aware that it may increase costs in the second year, as employees could use both carried-over funds and the new year’s allocation. This ensures the plan remains CRA-compliant.
4. Claims / Reimbursement Process
Employees submit claims online. PC Metro adjudicates CRA-eligible expenses. The business is debited for the claim plus a 10% adjudication fee.
Active employees have 365 days from the incurred expense date—the date of service, treatment, or purchase—to submit their expenses for reimbursement. However, the best practice is to submit your expenses immediately after incurring them to ensure timely reimbursement and to avoid missing any deadlines.
Terminated employees have 30 days from their termination date to submit claims for any eligible expenses incurred prior to termination. After this period, unused benefits cannot be reimbursed.
5. Wellness Claims / Tax Reporting
Wellness claims for a calendar year must be submitted by January 31st of the following year. Late claims may not be reimbursed and could affect tax reporting.
Claims received after January 31st for the previous year can still be paid if submitted within 365 days from the date of the expense, but the reimbursement will be reported in the tax year when the payment is actually made.
Yes, as long as you submit your claim within 365 days from the date of the expense, reimbursement is possible. However, the reimbursement will be reflected on the tax year in which the payment is issued, not the year the expense was incurred.
The January 31st deadline helps ensure timely processing and accurate reporting of claims for the prior calendar year.
If your claim is paid after January 31st, it will be reported on the tax documents for the year in which you receive the reimbursement, which may be different from the year the expense was incurred.
5. Fees / Costs
PC Metro charges a 10% adjudication fee only on reimbursed claims unlike an insured plan that charges monthly premiums.