F.A.Q.

FREQUENTLY ASKED QUESTIONS

Each question below will expand to give you your answer. If you have anymore questions that are not listed on our site, please feel free to e-mail us at PHSP@puhlemployeebenefits.com 

FOR EMPLOYEES

In concept, the traditional plan is like a size 10.5 shoe.  Everyone gets a pair of 10.5 shoes – one size fits all.

A few employees have high arches.

The HSA has the ability to as to as close as possible, allow you to pick your own shoe size and be able to adjust the shoe size when your feet change – many sizes based on your life circumstance.

Please visit out video link to see options on Health Spending Accounts:

https://puhlemployeebenefits.com/employeechoices/

A Health Spending Account is like a bank account. You start each plan year with a certain number of credits / dollars in your account. Then, throughout the year, you use those credits / dollars to pay for qualified medical, vision & dental expenses (that aren’t covered elsewhere) as well as premiums for supplemental health and dental plans.

The purpose of the Health Spending Account is to provide flexibility and choice in the delivery of employee benefits, tax-free.  Provides reimbursement of eligible “medically necessary” medical & dental expenses as defined by CRA rules & regulations.

Your employer allocates a pre-determined dollar benefit for your Health Spending Account. You then decide how & when to spend your health care dollars based on your personal and family needs.

To access your employee statement by internet pass codes talk to your plan administrator or e-mail phsp@puhlemployeebenefits.com or call our office at 403-221-9300 / 1-888-508-0077.

Each receipt submitted in a claim submission needs to abide by CRA’s (Canada Revenue Agency) guidelines and requirements. Receipt(s) are required to have the following:

  1. Date of service
  2. Cost of service
  3. Proof of payment
  4. Identification of the service rendered / drug purchased
  5. Patient name / who the service was for

Please note:

*Cashier / till receipts are not an eligible form of receipt, due to the above noted required CRA – Government criteria for each receipt submitted.
*You may assist the adjudication process by circling the total dollar amount you wish to claim.

Medical practitioners authorized to practice in accordance with the above laws can include (depending on the applicable province or jurisdiction, as the case may be) the following:

  • an osteopath;
    • a chiropractor;
    • a naturopath;
    • a therapeutist (or therapist);
    • a physiotherapist;
    • a chiropodist (or podiatrist);
    • a Christian Science practitioner;
    • a psychoanalyst who is a member of the Canadian Institute of Psychoanalysis or a member of the Quebec Association of Jungian Psychoanalysts;
    • a psychologist;
    • a qualified speech-language pathologist or audiologist such as, for example, a person who is certified as such by The Canadian Association of Speech-Language Pathologists and Audiologists (CASLPA) or a provincial affiliate of that organization;
    • an occupational therapist who is a member of the Canadian Association of Occupational Therapists;
    • an acupuncturist;
    • a dietician; and
    • a dental hygienist.

Additionally, a “nurse” includes a practical nurse whose full-time occupation is nursing as well as a Christian Science nurse authorized to practice according to the relevant laws referred to in subsection 118.4(2).

The claim process has been designed to provide the choice of reimbursement that best suits your own particular needs.  The following are the TRAC on – line System choices for processing your reimbursements:

  • You pay personally at point of sale and submit your claim receipt for electronic repayment into your personal bank account. The cash reimbursement option.
    • Let’s you negotiate cash price for service and / or products.
  • You pay with a credit card at point of sale and submit your claim for electronic repayment into your personal bank account, and then you pay off your credit card.
    • Let’s you negotiate price for service and / or products.
    • Collect travel points.
  • We pay the dentist & / or vision care provider directly, if provider agrees.
    • Frees you from any hassles.

The TRAC online system is designed to handle your method of reimbursement choice. Statements are sent to you via e-mail confirming the reimbursement and the remaining balance in your Health Spending Account.

No need for a claim form!

  • Use the claim app or scan OR
  • Login online to submit claims here: https://puhlemployeebenefits.com/login/
  • Circle the total $ amount claiming – for easier adjudication on each receipt.
  • Scan, fax or e-mail Puhl / HSA claims department
  • Receive an electronic deposit (taxfree) into your personal bank account (please submit your personal cheque marked voidor your bank stamped savings account information)

 Thank you for taking the time to be clear & accurate on your claim submission, it will most definitely speed up your claim reimbursement.

Our custom-designed TRAC on-line System reimburses your expenses by: 

  • Electronic payment into your personal bank account;
  • HSA refund cheque payable to you;
  • Electronic payment to your dentist; or
  • Any combination of the above.

Plus, if we have your e-mail address a claim confirmation notice is sent to you upon receipt of the claim and then again when the claim is paid showing the dollar amount of your refund and the balance left in your Health Spending Account.  This information is also sent via confidential e-mail to your employer.

Effective asap, if you have not yet registered your personal e-mail address with our TRAC on-line System, please submit to Puhl Employee Benefits at phsp@puhlemployeebenefits.com.

Our goal is to have 100% of correctly submitted claims paid within six days of the HSA Claims Dept. receiving the employer funds. If we electronically reimburse your personal bank account, the turn-around time is usually 3 to 5 days (in your account) from the day the claim was processed.

If we mail the reimbursement to your employer, turn-around time could be slightly longer (10 to 14 days) before the reimbursement cheque is in your hand.

We appreciate your help in maintaining (& even improving) the turn-around time. You can do this by adding your receipts & completing the claim reimbursement envelope accurately.

No, all you need is a bank account that accepts deposits. Please fax or e-mail the name & phone number of your bank, the bank’s transit numbers, the account type & number (it is best to have your bank provide a hard copy of the information to eliminate any errors). However, if you do have a chequing account simply fax us a void cheque.

The problem we have is that we do not know who is calling, and an easy question such as: “Have you received my claim yet?” can create frustrations on both ends.

What we need is the employee to e-mail us permission to interact with the spouse so we can have permission on record.

The Human Rights and Privacy Rules and Regulations apply in this situation. Therefore we are requesting any questions to be e-mailed to us. We can then look at the question(s) and respond back to the sender via e-mail or call if requested by the employee.

If the Employee or an Employee’s spouse calls us, we will respond by e-mail with an answer to the proposed question(s) as we are limited on the verbal responses to questions over the telephone.

Please e-mail any questions to phsp@puhlemployeebenefits.com.

Your Health Spending Account is designed to cover your & your family’s basic health, dental & vision care needs. You will typically be aware in advance of predictable & / or upcoming major costs, e.g. a prescription (Rx) drug needed monthly or a $3,000 orthodontics expense.

These instances dictate when your personal situation becomes the most important factor when deciding where to allocate your Health Spending Account dollars.

First, schedule appointments for major expenses like vision care and dental work around November / December of each year to maximize the availability of your HSA flex credits / dollars.

Second, always shop around to maximize the value for your money. In many cases you can drastically lower Rx dispensing fees & vision care costs (Costco & Wal-Mart & your independent vision care experts provide excellent value).

Third, if your family spends over $500 / year on regular prescription drug purchases, you will probably want / need to look for additional independent coverage.

Please e-mail phsp@puhlemployeebenefits.com or fax (403) 221-9309 and we will assist you in your selection. For Alberta residents, the solution is the Alberta Blue Cross non – Group Rx drug plan. Each province is unique and most have a provincial Rx Prescription drug plan so please e-mail us.

Fourth, if your family goes to the dentist twice a year and is experiencing maintenance dental bills, consider purchasing our supplemental plans with your HSA employer funds.

 Dental Plan supplemental plan premiums are reimbursed from your Health Spending Account, tax-free.

Please e-mail us at phsp@puhlemployeebenefits.com and we will assist you in your selection of dental, health & vision care supplemental plans.

Website – www.your-benefits.ca

The credits / dollars in your Health Spending Account can be used to cover health, dental & vision care expenses not covered by any independent health and / or dental plans.

 Note:  If you are covered by your spouse’s plan, your Health Spending Account is usually sufficient to cover the medical products and services not covered by his / her plan.

Your company’s Plan Year is Jan 1st to Dec 31st of each year. Employee’s plan designs are based on the employee’s date of hire, which is reconciled to Dec 31st.

Coverage is in effect for your Health Spending Account the first calendar day after your company’s waiting period has been reached.

Once a year (more often for some employees) with the Puhl / Private Health Services Plan, employees have to take the responsibility & the time to plan the best strategy for their own personal health situations.

Until now, everyone (employer and employee) has just accepted the terms, costs, and limitations of whatever an insurance company dictated. Now personal freedom of choice can be exercised to create a tailor-made plan, which will provide the coverage needed, when needed, tax-free. The employee wins.

IT-519R2 – Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction (# 68) states:

Proper receipts must support all amounts being claimed as qualified medical expenses (including travel expenses).  A proper receipt should indicate the purpose of the payment, the date of the payment, the patient for whom the payment was made and, if applicable, the medical practitioner, dentist, pharmacist, nurse, or optometrist who prescribed the purchase or delivered the service.

A cancelled cheque is not an acceptable substitute for a proper receipt.  If required forms, receipts or other supporting documents are not filed with the income tax return, such as when the return is electronically filed (E-filed), they should nevertheless be retained and readily available as they may subsequently be requested as proof of the claims being made or in support of the information being reported.

The CRA requires that all health, dental & vision care expenses must be medically necessary in order to be paid with HSA funds.  This is the key; proving from two sources that the Rx drugs are / were medically necessary.

The CRA is satisfied if a third party medical professional has provided in writing the prescription for the DIN (Drug Identification Number) Rx drug and if it has been dispensed and recorded by a pharmacist.  The cost of a physician’s prescription drug that is recorded by a pharmacist will be reimbursed to you with tax-free dollars from your Health Spending Account.

So, if you can buy the Rx drug with a DIN over the counter, it will not be allowed by CRA Rules as a medical need because the pharmacist has not recorded the transaction.

The following IT Bulletin provides the answer.

Interpretation Bulletin 519 R2 Medical Expense covered – for more details go http://www.cra-arc.gc.ca/medical/

References to Medical Professionals – IT 519 # 3 & # 4

This bulletin uses the terms “medical doctor,” “medical practitioner,” as well as various other terms to describe individuals involved in the medical profession, in a way that is consistent with the terms found in the Income Tax Act. The term “medical doctor” is used in section 118.3 for purposes of the disability tax credit. Section 188.2, on the other hand, uses the term “medical practitioner” for purposes of the medical expense tax credit. “Medical practitioner” encompasses a broad range of individuals in the medical profession.

For purposes of the medical expense and disability tax credits under sections 188.2 and 188.3, subsection 188.4(2) provides that a reference to a medical practitioner, dentist, pharmacist, nurse or optometrist means a person who is authorized to practice as such according to the following laws:

  • for a service rendered to an individual, the laws of the jurisdiction in which the service is rendered;
  • for a certificate issued for an individual, the laws of the jurisdiction in which the individual resides or of a province; and
  • for a prescription issued to an individual, the laws of the jurisdiction in which the individual resides, of a province or of the jurisdiction in which the prescription is filled.

The Puhl / Private Health Services Plan is committed to researching, developing, and implementing the latest technological innovations. This guarantees our clients will always have access to the most effective and efficient systems available.

We have developed and use the TRAC online system . TRAC – Technology Reporting for Administration and Claims online. The TRAC online system uses the latest on-line technology and is currently being expanded to allow direct employee interaction.

The TRAC online system has the capability to handle the entire claim process, including electronic notification to both employee and employer that the claim (shows exact payment to employee) has been paid and there is (shows exact balance) left in the employee’s Health Spending Account (HSA).

The TRAC online system tracks and reports all transactions from the first monthly contribution to notification at the end of the year of employee options and how to best maximize them. This creates stress-free management and high employee understanding and satisfaction.

The TRAC online system works for employees providing them accurate information when they need it. Employees can request their HSA balances at any time and in the near future they will be able to go on-line for instant up-dates.

All claims are strictly confidential. Your employer knows only the dollar amount, as he / she has to cut the cheque to pay for your expenses, tax-free.

The employer sets employees dollar limits. Please contact your employer for details or e-mail phsp@puhlemployeebenefits.com for your statement.

Go online and see your statement at www.puhlemployeebenefits.com

You are sent a notification after each claim is processed & reimbursed which shows your remaining HSA balance.

All employees & their dependents that are included on the employee enrollment form have coverage to the Health Spending Account member’s maximum. Coverage includes all tax dependent members; your mother (in-law) could claim her health care expenses from your Health Spending Account (to your dollar limit) if she is tax dependent on you. If in doubt, always check with your accounting professional.

Perfect: your Health Spending Account is much like a bank account. You do not have a conventional plan, you have credits / dollars. Claims go through your spouse’s plan first & any “medically necessary” health, dental and vision care expenses not covered may be paid through your Health Spending Account, to your dollar limit, tax free.

You may dedicate your HSA credits / dollars specifically for vision or dental or health, and your spouse’s plan would pay first.

Expense receipts cannot be dated more than twelve months prior to submission and are payable in the year claim was incurred. 

We ask that you please hold expense receipts until $200 is reached or until year-end (December 31 of the current year). This is not a requirement but our suggestion in order to help keep administration costs low for you and your employer.

You have thirty days from date of termination or if presently employed with the company, until December 31 of the current year to submit your medically necessary health, dental & vision care expenses, that where incurred while employed.

Enhancements can be started on January 1st of each year, or when a family situation occurs.

Example:  birth, marriage adoption etc.

We strongly recommend purchasing travel insurance when traveling out of the country. This type of coverage is available from your travel agent, with Gold Visa cards or you can e-mail: phsp@puhlemployeebenefits.com and we will send you an application. Premiums can be paid through your HSA.  If you have the Catastrophic Health Base Plan, travel coverage is already in place for you and your family. Please check with your Company’s HSA administrator.

Ask us about our special snowbirds travel policy.

Yes, providing the coverage is not for trip cancellation insurance. Premiums for travel coverage for possible medical expenses can be paid with Health Spending Account tax-free credits / dollars.

Flexibility of choice: a card system restricts your coverage by the Rx Prescription drugs allowed. The purpose of the HSA is to cover 100% of all costs, of all drugs & other services. Example: co-insurance, extra billing, extra charges, plus allowing you to divert HSA dollars for item(s) of medical necessity. Also our Flexible Plan Rx prescription optional drug plan provides an Rx drug prescription card.

An optional supplemental health and dental plan (which can also be called a safety net or stop-loss plan) is designed to protect employees from catastrophic claims that could deplete or exceed their Health Spending Account maximums.

A spouse’s plan or optional supplemental health and dental plan. You choose the appropriate plan for your family & the premiums are paid from your HSA, taxfree.

https://puhlemployeebenefits.com/employeechoices/

https://puhlemployeebenefits.com/employeechoices/

Your situation is unique to you. Our answer is yes if you have or anticipate frequent claims that are higher than the premiums you would pay for additional coverage. Use your Health Spending Account before-tax dollars to pay the premiums.

Please e-mail or fax us & we will facilitate your application for the additional coverage product so it can be coordinated with your Health Spending Account.

In Alberta, employees should apply for the AB Government Blue Cross non- Group Drug Plan, (if within 31 days from ending Blue Cross coverage with a former employer, there is no waiting period). Coverage will be seamless from the date the previous coverage terminated.

New employees with no prior coverage and high Rx pre-existing expenses should apply immediately for the AB Government Blue Cross non-Group Rx Drug Plan, as there is a three-month waiting period during which premiums are collected and claims are disallowed. Best to apply ASAP from date of hire to minimize the waiting period.

In other Provinces and Territories employees should join their provincial Rx Prescription drug plan card then look at applying for our Sub Plan B, Level a, b or c, depending on their personal situations.

Your First option is to book major dental work in the months of November & December each year, allowing possible access to two years of taxfree HSA funds.

Second – a supplemental dental Sub Plan can be purchased using funds from your Health Spending Account; e-mail or fax us as we coordinate these plans with your Health Spending Account, allowing tax-free payment of the premiums.

Third – all Health Spending Account coverage is at 100%, but if you anticipate a short fall – say in orthodontics – you should plan ahead and use your annual negotiation option (see Question: Can I put extra money into the Plan? for details). You have twelve months (from date of health care expense) to submit receipts.

Consider purchasing, with Health Spending Account funds, a supplemental dental Sub Plan.

Please e-mail phsp@puhlemployeebenefits.com, we will help you.

Please e-mail us at office@puhlemployeebenefits.com & we will send you our complete Employee Q & A, or answer any additional questions you may have.

You let them know about the Puhl / Health Services Plan by sending us their names, company names, and business e-mail addresses or fax numbers – and we will send them an information package. Remember, no selling will happen, we will send only information on how to pay for health, dental and vision care expenses with tax-free dollars.

FOR EMPLOYERS

Yes – we are brokers for all insurance companies.

We research insurance companies that specialize in your type of business and your employee demographics. We are then confident that these insurance companies will bid aggressively for your (their target market) life and disability business.

PHSP was designed by the CRA for employees and Business Owners are not employees. They are Business Owners with the ability to declare dividends and not pay Employment Insurance.  CRA states that if a Business Owner offers coverage of PHSP to employees, they (Business Owner) can be treated the same as the employee.

 

So what is the situation where there is no employee? CRA will invent a phantom employee, a non-existent employee. CRA will then ask: “If you had this phantom employee, what would be a realistic PHSP spending limit you would offer?” CRA attitude is, you as a Business Owner (with no T-4 employees) could have up to this phantom employee limit.

Please consult with your accounting professional for their advice.

For more detailed information on coverage, please visit The Government of Canada website at www.cra-adrc.gc.ca and use the search tool to locate the following, or if you are using Word 2000, simply click on the links provided:

 

  • IT519R2 – Medical Expense and Disability Tax Credits and                                              Attendant Care Expense Deduction

http://www.cra-adrc.gc.ca/E/pub/tp/i519r2em/it519r2e.htm

 

  • IT85R2 – Health and Welfare Trusts for Employees

 

  • http://www.cra-adrc.gc.ca/E/pub/tp/i85ret/i85re.txt.html

 

  • IT339R2 – Meaning of “Private Health Services Plan”

http://www.cra-adrc.gc.ca/E/pub/tp/i339r2et/i339r2e.txt.html

 

  • IT529 – Flexible Employee Benefit Programs

http://www.cra-adrc.gc.ca/E/pub/tp/it529et/it529e.txt

 

  • IT432R2 – Benefits Conferred on Shareholders

http://www.cra-adrc.gc.ca/E/pub/tp/i432r2et/i432r2e.txt

 

  • IT470R – Employees’ Fringe Benefits

http://www.cra-adrc.gc.ca/E/pub/tp/470re1em

Sales people have not had this product to offer their clients. Plus, a lot of sales people simply do not know about the Puhl / Private Health Services Plan concept because their areas of specialty are life insurance & / or mutual funds.

PUHL / PHSP handles all the contracts & CRA requirements on your behalf.

One detail you do need to take care of is to add a resolution to your minute book approving the initiation of the Puhl / Private Health Services Plan & stipulating who has the authority to determine the dollar amount of benefits to be provided to qualifying employees. Your lawyer can easily prepare this.

It’s true, insurance companies can provide a similar concept called ‘cost-plus’.  They usually charge 10 to 15% & typically have very limited reports & plan design features and employee communication is usually non-existent.

However, even if they can offer a product at a competitive cost with a multi-report system, you are locking yourself into the insurance company & possibly reducing the chance to negotiate your other benefits rates.  When your Puhl / Private Health Services Plan is independent from the insurance company you have more leverage in negotiating the costs of the other benefits.

Plus many insurance companies do not offer a ‘cost-plus’ program so you are cutting yourself off from their products for Life & Disability & the leverage they provide when negotiating your other rates.  Usually these companies have more defined Life & LTD products as they specialize in these areas.  Choosing an independent gives your company greater choice & flexibility.

Specialization is required & the majority of insurance companies specialize in the conventional group products & offer an Employee Health Spending Account as a ‘me too’ product.

We are PHSP specialists; we have the experience, the knowledge & the products.  We educate your employees.

The Puhl / Private Health Services Plan has a positive impact on employee morale. When employees are empowered to select their own health & dental benefits, job satisfaction often grows. Increased job satisfaction goes hand in hand with increased motivation & productivity. Because they are so appealing to employees, Employee Health Spending Accounts are also valuable tools to help companies attract & retain top quality employees.

Successfully managed plans increase employees’ understanding of their benefits. With this information, employees not only come to appreciate the cost of benefits packages, they also learn to select benefits wisely, choosing the amount & type of coverage they need. This streamlining process creates substantial savings for employers.

Employee Health Spending Accounts are not a passing fad. They are close to being the only smart way to offer comprehensive, customized employee benefits packages at a time when health products & services & cost containment are on everyone’s mind.

Employee satisfaction means company success (if all other factors are in check). The problem is the other factors are getting very expensive & are usually legislated.

Yes, your accounting professional needs to be informed to provide appropriate tax preparation. Remember no tax is payable by your employees on their medical expenses refunds.

Yes. In fact, many accounting professionals are members of the Puhl / Private Health Services Plan. We have an e-mail package we will send to your accounting professional upon request.

Your understanding of the actual cost of processing & financing depends on who is doing the calculations. The cost of processing & financing can be based on total premiums paid or can be based on actual claims paid.

Example:

  • Claims – $1,000
  • Premiums – $2,000

Based on total premiums paid, if you have $1,000 of claims & your premiums total $2,000, you have a 50% cost of processing & financing based on premiums, the cost of processing & financing is 50% of total premiums.

Based on actual claims paid, the business person says, “If I send in $1,000 in claims & I have to add another $1,000 in premiums to get my $1,000 in claims back, it means my $1,000 in claims costs me 100% for processing & financing, based on my paid claims.”

  • Pricing of dental, vision & health coverage is on a cost-plus basis. The cost of coverage for health, dental & vision plus the insurance company’s cost of processing & financing of 20 to 40% (collected at renewal as claims experience) means that 20 to 40% extra cost is charged to your company for all claims submitted.

Look over your last renewal & calculate your cost of processing & financing based on your actual paid claims. Just subtract your premiums from claims (paid) & divide into claims.

Unfortunately most business people are so busy running their businesses that they often delegate the responsibility of employee benefits to an arm’s-length employee and don’t give it much more thought.

The real answer is: Employee health, dental and vision care benefits are simply an entry on the balance sheet (under expenses), and as with all large subjective expense entries, advice from your accounting professional should be sought. Employee benefits are your largest non-revenue producing expense. Control of expenses means profit on the balance sheet. Your involvement in your company’s balance sheet entry for health, dental & vision care expenses is an absolute necessity.

By definition, an insurance policy is for unexpected health, dental & vision care expenses. With an insured health care plan, claims are expected and therefore you do not have an insurance policy you have a line of credit.

Health, dental & vision care claims are paid with a line of credit and as with all lines of credit there are associated financing charges and processing fees. The employer is the gatekeeper and insurance premiums are adjusted annually to cover the cost of the claims and the insurance company’s financing & processing charges. Typically the financing and processing charges are 25 to 70% for each claim paid, determined by the number of employees in the business.

Group insurance should be viewed as a balance sheet item. Group insurance creates the largest non-revenue generating expense on your balance sheet. Ownership looks after balance sheet items & group insurance is a balance sheet expense.

Employees’ & their families’ health, dental & vision care expenses are ultimately the responsibility of the employer.

You will find that in the majority of cases a minority of employees is responsible for the high claims, which cause the astronomical increases in your group rates. This would not be the case if those employees were using the AB Government Rx drug Sub Plan.

Ask your current group insurance company to provide you with the number of employees with claims over $500 a year for prescription drugs.  The AB Government drug Sub Plan costs $500 per family & $250 per single per year. Therefore employees on this Sub Plan with drug costs over $500 / $250 are no longer an expense for your group plan; they transfer their Rx expenses to the government plan thereby removing the need for your group to repay the Rx costs & the insurance company’s cost of processing & financing your group’s Rx claims.

All claims processed & paid through Sub Plans mean that your employees have received maximum value for their PHSP / EHSA credits / dollars and you the employer have removed any potential claims liability (short and long term) from your company’s obligation.

We believe that the combination of the following will provide the peace of mind & security that all are looking for.

  • Provincial Government Health Plans – Medicare & such
  • The Puhl / Private Health Services Plan – tax-free reimbursements
  • The Catastrophic Health Base Plan
    • Out of province medical travel coverage – trips up to 45 days, includes foreign countries
    • In province medical catastrophe insurance – ($2,000 deductible, $100,000 over 2 years)
  • Spouses’ plans – act as stop-loss plans
  • Private Sub Plan(s) – each person / family is unique – customized coverage
  • Legal & accounting professionals – advice & guidance
  • Your personal planning & private funds – involvement & investment in your own wellness

This combination will provide peace of mind & reduced / limited financial risk & expense.  By planning & integrating all of these components, your financial future does not have to be adversely affected by substantial health costs resulting from accidents & / or illness.

Planning & available cash will help make the difference if & when untimely & expensive tragedy strikes.

Yes, with an accounting professional & / or financial planner you have an objective knowledgeable person looking out for you and your employees on an hourly rather than a commission basis. In most cases, an accounting professional & / or financial planner charging by the hour will reduce your group costs and improve your employee benefits program.

Consider your history with an Agent: your premium costs vs. benefits paid – your processing & financing costs have gone up and up and your employees have complained more and more.

With improved technology, Internet software & the continuing inflexibility of conventional group insurance products & rates, many companies like yours, have outgrown the need for a commissioned Agent to come by once a year & simply say: “Well your rates are going up, again, but what can you do?”

A tremendous benefit in using an accounting professional & / or financial planner is the added value they bring to your staff. The cost savings to administer your health, dental and vision care plan can be redirected to fund invaluable financial planning expertise for your employees. When you are paying $30,000, $50,000 or $100,000 for the services of an employee, it is clearly responsible planning to include (as part of the package) advice on how to best spend the income received.

Your employees are the backbone of your company, if they are secure in both their personal & financial lives; your company’s growth will be given a huge boost, guaranteed.

When you use an accounting professional & / or financial planner’s expertise for your employee benefits you are handling your financial resources wisely while clearly sending a unique & important message to your employees, “We are family – this Company cares about our employees.”

Ask your accounting professional & / or financial planner to access your group plan. They are trained to look at the whole picture. Your picture is complicated & they already know a great deal about it.

You can, but 3% of your income is treated as a deductible first. In 2003 the highest deductible that CRA allowed was $1,728. Yes, the lesser of 3% or $1,728 is the deductible before tax adjustments and then just 17% of the remainder becomes a tax credit.

100% of your healthcare expenses can go through your Employee Health Spending Account right away. You cannot do both.

We believe no. Employee benefits tie the whole picture together; the cost of your benefits plan is a large part of your personal financial planning which directly affects your business. You above all people probably need professional advice. You have a personal life & a business where many peoples’ livelihoods depend on you. You are time limited, so use a professional to save time & help you feel more in control of this huge expense.

The reason most businesses provide health & disability plans to their employees is to protect them if / when a catastrophe occurs. Long Term Disability allows employees to continue to feed and shelter their families and the drug plan pays for their drug costs. So the thought goes….

Long-Term Disability in most cases is a level benefit which means inflation reduces the purchasing power. $1000 today will not be $1000 in ten years and certainly not in thirty years. A company with a prescription (Rx) drug plan pays the cost of the drugs an employee needs. How long will your company pay those costs? Four years? Forty years?

Is your company prepared to pay the (unknown) Rx drug costs for what could be years for an employee on Long-Term Disability?

When an employee is on a Long-Term Disability, not only are the benefits reduced by inflation, but there is always the possibility that your drug plan would have to be terminated if you can no longer afford to pay the escalating traditional insurance company’s premiums, which are based on your employees’ claims.

Perception and reality are two different worlds to employees who find themselves in the situation of actually needing to access Rx drug coverage and Long-Term Disability income protection.

The conventional group insurance company’s current premiums (which you are already paying) could answer this question for you.  Your premiums are based on your claims (plus processing & financing costs) for a designed preset coverage amount.

The current coverage has been accepted by the employee as the standard to measure the value of the Puhl / Private Health Services Plan as compared to your current plan.

Therefore the amount & type of coverage provided should be equal to or better than this (current premiums) employee measuring standard.

The CRA states that the only way Puhl / Private Health Services Plan credits / dollars can be spent is by paying for health, dental and vision care expenses.  If employees consider the credits / dollars as their money vs. the insurance company’s, they will attend to their dental health rather then lose their credit / dollars.  Better still, they can choose how and when and on what to spend their credits / dollars based on their own individual health needs at that moment in their lives.

We often hear this very valid concern expressed by employers who are used to the inflexibility of a traditional plan.

The following should put your mind at ease. One of the most appealing features of the Puhl / Private Health Services Plan is the flexibility offered to both employers & employees. The plan design decisions that you as the employer make & the choices in spending Employee Health Spending Account funds that your employees make are in effect for one plan year only. Prior to the beginning of each plan year, you, as the employer and ultimate decision maker, have the opportunity to add, delete, adjust, alter, change and re-customize your company’s PHSP plan design to fit your new or changing circumstances. You can

change your mind and your plan design every year if you want. The Puhl / Private Health Services Plan truly is the Perfect Plan for Employee Benefits.

The CRA provides the choice of either Option #1 or Option #2 (see below) but not both.  Options can be changed on January 01 of each plan year for the next plan year for every employee or Class of employees.

Option # 1 – Carry-forward of unused credits / dollars

Carry-forward of unused EHSA credits / dollars to the next plan year (January to December).  Health, dental & vision care expenses are reimbursed from the current plan year’s EHSA credits / dollars.

 

Here the advantage to the employees is their ability to choose to manage and plan for their families’ health, dental and vision care needs over a 24-month period.

Option # 2 – Carry-forward of expenses over the EHSA limits

No carry-forward of EHSA unused monies to the next plan year: here the employees give up the unspent credits / dollars but are allowed to carry forward their health / dental and vision care expenses into the next plan year even though the expenses were incurred in the current plan year. The only condition is that the health, dental and vision care expenses cannot be over twelve months old when submitted for EHSA reimbursement.

The value here is the ease of claim reimbursement and coverage if employees exceed their current plan year credits / dollars total.

What else can the competition say? They blur the issue by not understanding how spending account plans work. We provide health care enhancement insurance Sub Plans designed to cover each employee’s own unique needs. The residents of Alberta have access to a $25,000 per year Rx drug plan which costs $250 per year for a single and $500 per year for a family, can be paid out of EHSA credit / dollars, tax-free & has no restrictions on pre-existing conditions.

Please don’t forget that with traditional insurance companies, 100% of all health, dental & vision care expenses are charged back on the next year’s premiums plus a 20 – 40% cost of processing & financing increase payable by your business. The business always pays.

By using the PHSP: 

  • Prescription drug claims over $500 per year are covered with the optional Rx drug Sub Plan.
  • No automatic adjustments (increases) for yearly inflation rates.
  • Terminated employees’ unused funds revert back to your Company.
  • Plan design – use funds or lose them.
  • Unused carried-forward funds are forfeited to the Company.
  • Enhancements of employee funds for unusual expenses create lower wage requirements (employees pay with before-tax dollars).
  • The PHSP is a ‘pay as you claim’ plan. Your Company earns interest by holding onto the money until needed versus pre-paying the insurance company.
  • Reduced liability risk for new employees who ‘use it’ and then quit.
  • Unpredictable Long Term Disability expenses have been reduced or eliminated for long term disabled employees and their dependents.
  • Human Rights condition to ‘accommodate to undue hardship’ is defined.
  • Dollar value costs are tailored to your Company’s own design and needs.
  • Processing & financing costs are reduced from 35% to 5% on paid claims (processing only, the PHSP has no financing charges.)

The PHSP is a customized product designed to your Company’s unique requirements.

 

This is a “big” question that needs to be discussed with your legal, accounting, & financial planning professionals. We have a specific section titled Human Rights Legislation. Please visit our web site at www.puhlemployeebenefits.com for details. This whole area is very important to all concerned.

The first step is to request (from your current agent), a copy of the contract you signed so your legal professional can read it and provide you with comments & observations. Move quickly on this.

With an Employee Health Spending Account your unknown liability is limited by the amount you have provided each employee per year. With conventional plans you could pay any unknown $ figure. That’s a problem & it’s a big problem.

The cost could be $10,000 / $15,000 or more per year per disabled employee (plus his / her current & future dependents & their health, dental & vision care costs).

  • Hiring practices
  • Signed employee contracts
  • Group benefits plan design

The employee has legislated rights of protection and you the employer must pay, unless you can prove corporate financial hardship. A disabled employee has guaranteed coverage for as long as he / she requires coverage or to age 65. The employee has all the rights and you the employer must pay. You must protect yourself in other ways.

You can’t change legislation but you can use your employer rights under the legislation and do what you can.

  • Hiring practices
  • Signed employee contracts
  • Group benefits plan design

The employee has legislated rights of protection and you the employer must pay, unless you can prove corporate financial hardship. A disabled employee has guaranteed coverage for as long as he / she requires coverage or to age 65. The employee has all the rights and you the employer must pay. You must protect yourself in other ways.

You can’t change legislation but you can use your employer rights under the legislation and do what you can.

In order to qualify as a legitimate Puhl / Private Health Services Plan, documentation, rules, regulations, reporting & accounting procedures must be followed. Plus all changes to Federal legislation must be adhered to, to continue to operate a legal Puhl / Private Health Services Plan. This includes compliance with the new privacy laws relating to employee confidentiality.

The plan must contain an element of risk or insurance; it is essential that payments by the employer are not voluntary or gratuitous. In other words, the trustees must have the authority to enforce payment should the employer not make the deposits to which he / she has committed. This is very important.

To accomplish this, the trustees must be independent of the employer. Further, where the independence of the trustees is uncertain (non arm’s-length), the Federal tax department may question if a proper Health and Welfare Trust was ever established. Taxes, interest, and penalties will be the responsibility of the individual who claimed the ‘off-side’ tax deduction (including all claims back to the first claim.) Is it worth it to try to do it on your own to save a (low) cost of processing? You can feel totally secure with the Puhl / Private Health Services Plan.

The proposed budget of 1998, in dealing with the subject of Sole Proprietors & Partnerships use of a Puhl / Private Health Services Plan, clearly states that independent trustees must administer Puhl / Private Health Services Plans otherwise a Puhl / Private Health Services Plan is not eligible and all benefits paid through the Puhl / Private Health Services Plan are considered taxable (plus possible penalties).

The 2003 Business and Professional Income Guide (pages 21 – 22) outline the rules for Trustees.

Independent Trustees must be used to be clearly ‘on-side’ with the Federal Government. The Federal Government requires Independent Trustees to administer a Puhl / Private Health Services Plan (IT85r2 paragraph 6).

The rationale is: How else is the Federal Government able to audit all Puhl / Private Health Services Plans? The Federal Government’s rules regarding GRRSPs clearly indicate CRA’s direction – limited registration with CRA but complete onus and responsibility on the professional financial community to ensure all rules are followed and reported to the CRA.

Puhl / Private Health Services Plans reporting by independent accounting / financial planners is and will be consistent with Government expectations.

The direction of the Federal Government is to rely on independent accounting / financial planners to audit & be responsible for advising their clients. The current practice of down-loading off-shore accounts to independent accounting / financial planners is evidence of the Federal Government’s direction in tax reporting, putting the onus (and penalties) on independent financial / accounting advisors.

Remember all those who give advice on a Puhl / Private Health Services Plan should be licensed to provide financial advice and therefore be carrying Errors and Omissions

Insurance; otherwise you are on your own (Buyer Beware). Your accounting professionals and your independent financial advisors have the necessary licenses and insurance.

Our Puhl / Private Health Services Plan charges a competitive cost of processing on paid claims. As a member of the Puhl / Private Health Services Plan – a CO-OP of Businesses, you are able to enjoy this low cost of processing & are able to sleep at night knowing you are ‘onside’.

Our financial goal: As the number of businesses using the Puhl / Private Health Services Plan increases, the cost of processing to the membership will decrease. This is possible with the TRAC online System providing the most efficient technology available.

No problem you qualify, as you are an employee.

You must offer at least one key employee benefits equal to yours as the employer. The concept of ‘Top Hat’ plans is no more. Please seek the advice of your accounting professional.

The saying “If it ain’t broke, don’t fix it” worked well until NEW technology arrived. The health benefits world today is a different place for all of us. Your group plan is based on an ‘old concept’ view of family needs & is not serving the majority of your employees with today’s multi-faceted requirements. Your group plan is costing you more than you need to be paying and must have your priority & attention to fix it.

The cost of processing & financing is the #1 financial consideration.  When you send in a $1000 claim and you get back your refund of $1000, the only difference (between plans) at that point, is what it costs for you to get back your $1000.

The percentage difference between separate plans can be 100% or more on the cost to processing & financing your health, dental & vision care.

Remember: Health, dental & vision care plans provide no product, they simply exchange cheques with you & attach a service (processing & financing) fee.

The important questions then are:

  1. What are you getting for the higher processing & financing costs?
  2. How do higher processing & financing costs benefit your company?
  3. What are you really getting for your $$?

Conventional, fully insured plans with major insurance companies are charged a ‘loaded premium’ which includes a cost of processing & financing of 15 to 40% plus an inflation charge of 6 – 9% for dental and 20 – 30% for health and vision care, as well as an additional charge for the conventional insurer’s ‘claim reserve’ (to further protect them).

The total of all these processing & financing costs is called ‘Cost of Delivery’ and the flip side is called ‘Suggested Target Loss Ratio’. The usual cost of processing & financing (delivery) an insurance company charges is 15 to 40% depending on the number of employees you have, which means $1000 in claims costs an additional $150 to $400 to process.

The ‘Suggested Target Loss Ratio’ is the dollar amount the insurance company enters into a formula to calculate what they want to pay back to you, e.g.: you pay $1000 in premiums to your insurance company who needs a 75% Target Loss Ratio. This means they have built into their rates a 25% cost of processing & financing based on your premiums submitted. When you base their cost of processing & financing on claims, the total % cost of delivery (processing & financing) increases to 33%, a truer picture of your costs.

Your group insurance company doesn’t expect to earn a level 15 to 40% cost of delivery each year but their shareholders expect (demand) to earn an average of 15 to 40% over every three to five year period or they expect (demand) that the insurance company will raise your rates to make it. Check your rates vs the premiums you paid to see what you have paid as cost of processing & financing over the past three to five years.

A $1000 employee monthly premium provides $250 to your current group insurance carrier every month for administrative paper shuffling. Major costs to you and major profits for them.

Conventional plans never refund any of the excess dollars you paid that was not required for claims or fees, ‘fund money’ if you will. In other words, if your claims are under the projected claims levels, the conventional insurer returns no money to you, increasing the over-all cost of delivery (processing & financing) to your Company from what the insurance company originally expected to earn to an even higher % of your claims paid.

You are required to pre-pay health, dental, and vision care claims that may or may not be covered. However, if your claims exceed the projected Target Loss Ratios, the conventional insurer will simply bill you an increase in rates that is higher than inflationary trends would have otherwise required. In either scenario you are on the ‘wrong end of a costly stick’ with a conventional, fully insured plan.

Lack of knowledge of other options, options made possible by technological innovations. The ‘status quo’ has never been questioned.

Time is valuable so the belief is: “If it ain’t broke, don’t fix it”. The trouble is, group benefits plans are broken!

When conventional insurance companies can charge 20 to 40% cost of processing & financing fees and can dictate what they cover, why should they change? Companies (like yours) keep paying.

Qualified businesses have joined together to provide members with quality products, first-class e-based access, and the TRAC online System.

The enrolment of new members (introduced to us by existing members) generates the volume of business necessary to keep the cost of processing low. The goal of the Puhl / Private Health Services Plan CO-OP is to further reduce the cost of processing. In order to accomplish this, we need MANY MORE members.

Our goal is to obtain a minimum of three new member introductions from every existing member of the Puhl / Private Health Services Plan CO-OP in order to build to the volume required to provide the lowest possible cost of processing.

Once a year (more often for some plans) employees have to take the responsibility and the time to plan the best strategy for their own personal situations. They have to think ‘a bit’, plan ‘a bit’, and be accountable ‘a bit’. In return, the rewards are more than ‘a bit’ –the employees realize much greater value.

Until now, everyone (employee & employer) has just accepted the terms, costs and limitations of whatever an insurance company dictated. Now personal freedom of choice can be exercised to create a tailor-made plan that will provide the coverage needed when needed, tax-free. The employer wins, the employee wins.

‘Benefits’ is the all important word an employee listens for when deciding for whom and where to work. The Puhl / Private Health Services Plan covers 100% of claims with carry-forward and RRSP choices, an employee is always ahead of the old conventional plans with self-funding. With the Puhl / Private Health Services Plan, the employer sets the dollar limits an employee has available in his / her Employee Health Spending Account which will motivate him / her to choose your company.

Not only will the Puhl / Private Health Services Plan help you recruit new employees but the plan design will help you retain your employees. For example if sick days are provided, offer your employees the $ equivalent of the sick days’ pay in their Employee Health Spending Accounts. This way, employees can spend the allotted money on any qualified health service they want and need.

No. Your Puhl / Private Health Services Plan will reduce the time required by your employees because:

  • all qualified claims are covered so no explanation time is needed.
  • terminated employees’ administration is as easy as not sending in any more claims for them.
  • our TRAC online System handles all the processing, tracking, documentation and reporting; we are online: (www.puhlemployeebenefits.com), information access is immediate.

Many employers set up a separate account with their main banking partner and every month deposit the same dollar amount they were sending for premiums with the conventional insurance company, drawing on the Puhl / Private Health Services Plan account only when required (by transferring funds into cash flow). Other employers simply fund the claims upon presentation from monthly cash flow. The Puhl / Private Health Services Plan provides choice. You have control.

Electronic Funds Transfer (EFT) by Employer

If your company has EFT for your payroll, the most convenient payment method is to use your bank to transfer the required PHSP funds to the Puhl / Private Health Services Plan Claim Reimbursement Trust Account.  This is a ‘no hassle’ system; there is no need to change your current banking arrangements.

When you send in your employees’ claim envelopes, we adjudicate & process them, and then e-mail you the correct $ amount due. You would then use your banking system to transfer the correct $ amount to our PHSP BMO Claim Reimbursement Trust Account (accurate every time).

The TRAC online System can operate in 2 ways.

  1. You send your claim(s) to us & our adjudicators double-check your totals. We fax or e-mail you a ONE TIME EFT cheque along with the correct dollar amount required to pay your claim(s) (includes cost of processing & any applicable taxes). You complete the ONE TIME EFT cheque & fax back to us. We receive the $ amount of the cheque from your bank & then EFT your funds to your employees’ personal accounts. This EFT system is both fast & error free and eliminates the problems associated with ineligible or incorrectly added receipts.
  2. You add your receipts & complete your Confidential Claim envelope and submit to the PHSP Claims Dept. along with your corporate cheque for the correct amount (including all applicable taxes and cost of processing). Claim receipts that are ineligible or added incorrectly are ‘caught’ by our claim adjudicators and subsequently change the $ amount required from you. Our request to you for another corporate cheque with the new total significantly increases the time it takes to process your claim(s) and therefore also increases the time it takes for you to receive your refund. This delay could conceivably add weeks to your ‘wait’ time.

Note: Our experience has proven that method #1 is ‘hands down’ the preferred payment method for everyone – employers, employees & medical service providers.

The TRAC online system tracks & reports all transactions from the first monthly contribution to notification at the end of the year of employee options and how to best maximize them. This creates stress-free management and high employee understanding & satisfaction. The TRAC online system delivers like no other system.

The TRAC online system works for your employees providing them with accurate information when they need it. Employees may request their balances at any time & in the near future they will be able to go online for instant updates.

Section 67 of the Act provides that, in order to qualify as a deduction from income, an out-log of expenses must be ‘reasonable’ in the circumstances.

In our opinion, the use of the word unlimited’ would put your plan ‘off-side’ according to CRA rules & regulations. We recommend a Spending Account limit of $10,000 subject to personal circumstances. To claim higher amounts your annual income should be above $100,000.

Our final recommendation for your correct course of action is to consult your accounting professional for any unusual circumstances that affect limits.

Please do not worry about this happening. An Employee Health Spending Account is a cash account that cannot be spent for anything except qualified medically necessary health, dental, and vision care expenses.

There is no rush on the Employee Health Spending Account as the employees and their dependents will have health, dental, and vision care expenses throughout the plan year. Employees will become ill and need Rx drugs, dental appointments will be scheduled and glasses will be needed after a vision examination. Orderly and as usual in your employees’ lives.

There is a line on the employee enrollment / change form to advise of additional Puhl / Private Health Services Plan funds. Simply have your employee complete the change form and commit the funds to his / her Employee Health Spending Account in equal monthly installments.

In recent months, we have become aware of a marked increase in the number of self-funding plans entering the marketplace. To protect our clients, we have compiled a list of questions, which should be addressed (and satisfactorily answered) in order to validate the efficacy and stability of these apparent newcomers.

The Plan Design

  • Do they provide a Contract which follows government regulations?
  • Do they have standardized forms? – indicates size.
  • Do they process, adjudicate, track & report claims?
  • What is their cost of processing for administration / claims handling?
  • Do they provide an electronic payment option? – convenience & speed.
  • Do they offer web page access? – client access to information.
  • Do they have a secure system? – protection of sensitive material.

The Marketing Organization

  • What kind of selffunding experience do they have?
  • Do they provide references from companies of your size?
  • Do they belong to any accredited Professional Associations?
  • Do they carry liability insurance through a Professional Association?
  • Do they belong to the Better Business Bureau?
  • Are they a local or a national organization?

The Puhl / Private Health Services Plan a CO-OP of Businesses proudly and competently meets and is expanding on all the above criteria. We have many years of successful self-funding experience and provide excellent products and value added services.

In most cases our competitors charge 10 15% (vs our 5%) cost of delivery (processing & financing), from which they usually pay commissions, (probably negotiated for the Agent). Disclosure of commissions is usually considered sacred to protect the Agent’s compensation and to not upset you, the client.

First of all, thank-you very much, your trust in our plan will be confirmed.

Now, the answer to your question is NO, the CO-OP absorbs your $370 one-time registration fee.

I would like to mention again how much we appreciate (and reward) PHSP client introductions. For every introduction from you, your name is entered in our next draw for a dinner for two at a 5 Star restaurant.

Thank you for your help in making the PHSP CO-OP of businesses a success.

FOR EMPLOYERS - WITHOUT EMPLOYEES

Puhl Employee Benefits has arranged for businesses to participate in a health & dental insurance plan called the Puhl / Health Services Plan.

A Puhl / Health Services Plan is much like a ‘bank account’ for health, dental & vision care expenses approved by CRA (they set the rules).

The PHSP participant starts each plan year with a designated number of dollars / dollars in an Employee Health Spending Account as determined by the plan sponsor (owner / employer). Then, throughout the year, those dollars are used to pay for medically necessary health, vision, dental expenses, & Sub Plan premiums that are not covered elsewhere.

 Health (Rx-prescriptions), vision care, (including laser eye surgery) & dental claims (including crowns & cosmetic work as well as orthodontics for adults and children) are all eligible. If a participant has additional coverage (spouse’s plan), both plans can be used to recover health and dental care expenses to a 100% maximum. Claim first from the conventional plan.

Your company submits the original receipts to the Puhl / PHSP. The business deducts the entire cost. The Puhl / PHSP then issues a tax-free reimbursement to the claimant.

The PHSP participant / claimant (you) has saved the personal income tax otherwise payable on the cost of the health, dental & vision expenses – for a $1000 claim, $428 @ 30% / $666 @ 40% / $1,000 @ 50%.

To summarize:  Why pay 30%, 40% or 50% personal tax when a 5% processing cost creates the pathway to allow you to submit health & dental expenses on your company’s tax return as ordinary business expenses, deductible to the business & not taxable to you?

We handle all the Contracts and CRA requirements on your behalf.  One detail you do need to look after is to add a resolution to your Minute Book approving the creation of a Puhl / Health Services Plan, stipulating who has the authority to determine the dollar amount of benefits to be provided to qualifying participants.  We provide you the document.

The CRA requests that we must now track and report Business Identification Numbers for Registered Corporations.

For more detailed information on coverage, please visit The Government of Canada Website at www.cra-adrc.gc.ca and use the search tool to locate the following, or if you are using Word 2000, simply click on the links provided:

  • IT519R2 – Medical Expense and Disability Tax Dollars and Attendant Care Expense Deduction: http://www.cra-adrc.gc.ca/E/pub/tp/i519r2em/it519r2e.htm
  • IT85R2 – Health and Welfare Trusts for Employees: http://www.cra-adrc.gc.ca/E/pub/tp/i85ret/i85re.txt.html
  • IT339R2 – Meaning of “Puhl / Health Services Plan”: http://www.cra-adrc.gc.ca/E/pub/tp/i339r2et/i339r2e.txt.html
  • IT529    – Flexible Employee Benefit Programs: http://www.cra-adrc.gc.ca/E/pub/tp/it529et/it529e.txt
  • IT432R2 – Benefits Conferred on Shareholder: http://www.cra-adrc.gc.ca/E/pub/tp/i432r2et/i432r2e.txt
  • IT470R – Employees’ Fringe Benefits: http://www.cra-adrc.gc.ca/E/pub/tp/470re1em/

Yes, your accounting professional needs to be informed to provide appropriate tax preparation.

The answer is yes, if you have no employees and yes, (with specific rules & regulations) if you have employees. A Sole Proprietor & / or a Partnership can use the Puhl / Health Services Plan.

A Sole Proprietor & / or a Partnership can use the Puhl / Health Services Plan because of the fixed monthly premiums, annualized requirement.

With all Puhl / Health Services Plans, the corporate employer is entitled to a deduction in respect of the contributions made and the shareholder (employee) receives the benefit tax-free.

When equivalent coverage under a Puhl / Health Services Plan is extended to all employees, including the employees who are shareholders, the benefits provided to the employee shareholders from such coverage is normally considered to be an employment benefit rather than a shareholder benefit.

Similarly, when all employees of a corporation are shareholders and it is reasonable to conclude, based on the particular facts of the situation that the Puhl / Health Services Plan coverage has been provided as part of a reasonable remuneration package, the benefit from such coverage is also considered to be an employment benefit rather than a shareholder benefit.  The importance of the distinction is that an employment benefit of this nature is not taxable, whereas a shareholder benefit is taxable.

We conclude that for incorporated businesses in which the persons covered in the plan receive T4 or T4A income and they perform substantially all the normal duties of an employee, then utilization of the Puhl / Health Services Plan allows these persons to receive a non-taxable employment benefit provided they receive the benefit by virtue of the employment.

PHSP was designed by the CRA for employees and Business Owners are not employees. They are Business Owners with the ability to declare dividends and not pay Employment Insurance.  CRA states that if a Business Owner offers coverage of PHSP to employees, they (Business Owner) can be treated the same as the employee.

So what is the situation where there is no employee? CRA will invent a phantom employee, a non-existent employee. CRA will then ask: “If you had this phantom employee, what would be a realistic PHSP spending limit you would offer?  ”CRA attitude is, you as a Business Owner (with no T-4 employees) could have up to this phantom employee limit.

Also there must be an “element of risk” which, in our opinion, our plan provides.

Always seek the counsel of your legal & accounting professionals.

The test that CRA would give it in an audit is ‘would you pay this amount for your employees”?

If you had no employees, the test would be ‘would an employee in a similar company get this amount’?

No, if there are just shareholders & no other ‘arm’s-length’ employees, who receive T-4 Income.

There must be an element of risk where employer can pay in more than an employee can take out.

A shareholder must be engaged as an actual employee of the Company, which means that an owner must earn T- 4 or dividend income in order to enjoy the tax advantages of the PHSP. Investment income does not qualify. An owner’s income must be the result of time invested, not the product of money invested.

The perception that a PHSP / EHSA will require a greater time commitment by the administrator than a conventional group insurance plan is false. Business owners find once the initial set-up is completed the TRAC online system requires minimal administrative involvement.

Once we have all enrollment data entered, the TRAC online system takes over (see Question: What is the TRAC online system?).

Claim submissions are simple & straightforward: participants complete individual claim envelopes, enclose their original receipts and submit to the PHSP Claims Department. Re-payment is made by cheque or by (what most participants prefer) electronic deposit into their personal bank accounts.

The participants are notified by e-mail the day of payment of the payment and year to date Spending Account transaction summary Statements are e-mailed at the end of every month.

The TRAC on-line System provides Reports & Statements for all aspects of the Employee Health Spending Account. With the TRAC online system, administration is just a click away.

With conventional group insurance companies’ products, participants spend a lot of time finding the answer to the recurring question,  “Is this covered?” Our answer is “The Employee Health Spending Account covers all medically necessary health, dental & vision care claims”, simple, & none of your time is needed to find the answer to the question.

It is normal to feel hesitant & / or concerned when faced with something new, but let me assure you that after your very first ‘go’ with the TRAC online System, you will be very impressed with the whole process.

Any ‘bugs’ will be easily corrected & you will understand this new concept that provides tax-free benefits when needed the most – when you have the health, dental & vision care costs.

The Employee Health Spending Account is simply the most convenient & efficient way to handle health care expenses – tax-free! Rather than taking more time, your time will be freed up.

Turn around time in our office is three days – payment is the next day with electronic payment, (the banks then require 2-3 days) or within 7-10 days by surface mail.

Many business owners set up a separate account with their main banking partner – every month depositing the same dollar amount they were spending for premiums with a conventional insurance company, then drawing on the Puhl /

Health Services Plan account only when required (by transferring funds into cash flow) to cover their claims.

Others simply fund PHSP claims, upon presentation, from monthly cash flow.

The Puhl / Health Services Plan provides choices. You have control.

No – we will invoice your bank for the amount and send you a receipt.

The Puhl / Health Services Plan handles all administration including claims adjudication, repayment, & tracking. You are sent a confirmation of repayment of claims when paid, and a monthly summary of all EHSA transactions. The Puhl / Health Services Plan has designed & developed & uses the TRAC online system.

FOR ADMINISTRATORS

The problem we have is that we do not know who is calling, and an easy question such as: “Have you received my claim yet?” can create frustrations on both ends.

The Human Rights and Privacy Rules and Regulations apply in this situation. Therefore we are requesting any questions to be e-mailed to us. Also now, we can look at the question(s) and respond, in an appropriate time, back to the sender via e-mail that the Employee has provided to us.

If the Employee or an Employee’s spouse calls us, we will do our best to respond by e-mail if necessary, with an answer to the proposed question(s) as we are limited on the verbal responses to questions over the telephone.

Please e-mail any questions to phsp@puhlemployeebenefits.com

The perception that a Puhl / PHSP / EHSA requires a greater time commitment from the administrator than a conventional group insurance plan is false.

All plans during the start up phase have some extra time requirements. Without exception, our employer clients find that once the initial set-up is completed & the new concept is explained to the employees, the TRAC online system requires minimal administrative involvement.

Once we have all corporate & employee enrollment data entered, the TRAC online system takes over.

Claims processing is simple & straightforward: employees complete their individual claim envelopes, your company plan administrator submits a company cheque with employee claims, & re-payments are made by cheque or by (what most employees prefer) electronic deposit into the employees’ personal bank accounts.

The employees & the employer are notified separately by email the day of payment, of the payment and with summary Statements (employee) and Reports (employer) to all parties at the end of every month (employer sees only $ amounts claim details are confidential).

 

The Life of a Health and Dental Claim for an Employee

  • Employee books health service. . . . . . . . . . . . . takes time.
  • Employee goes and gets service / product. . . takes time.
  • Employee receives and organizes bill. . . . . . . . takes time.
  • Employee turns claim in for reimbursement to employer or direct to Puhl / PHSP

Then…

  • Employer submits claims to PuhlL / PHSP
  • Arrives at Puhl / PHSP . . . opened in afternoon and organized
  • Adjudicator receives the claim the next day – reviews and approves the claim.
  • Claim Payer – who receives the claim from the adjudicator and then reviews and pays claim within 48 hours BY e-mailed reimbursement to employees bank – arrival time in 2 – 4 days OR
  • Mailed to Employee through employer – arrival time in 4 – 6 days, then
  • Employer gives claim payment to employee if employee was paid by cheque
  • Claim usually takes 7-10 days to be reviewed by employee

The number of steps necessary for the employee’s to complete their health work and then to receive their reimbursement, contributes to the perception the employees have regarding how long a claim takes to be paid.

The TRAC – online Electronic Fund Transfer (EFT) system developed by Puhl Employee Benefits, helps speed up the process.

The TRAC online system provides Reports & Statements for all aspects of the Employee Health Spending Accounts. With the TRAC online system, administration is just a click away.

With conventional group insurance companies’ products, employers spend a lot of time finding answers to their employees’ recurring question,  “Is this covered?” Our answer is, “The Employee

Health Spending Account covers all ‘medically necessary’ health, dental & vision care claims”. Simple, & none of your time is needed to answer your employees’ questions.

Another perceived problem concerns what to do with terminated employees. In this case simply notify us of the correct termination dates & don’t pay any further Puhl / PHSP monies for terminated employees.  Issue resolved.

It is normal to feel hesitant & / or concerned when faced with something new, but let me assure you that after your very first ‘go’ with the TRAC online system, you will be very impressed with the whole process.

Any ‘bugs’ are easily corrected & your employees will quickly understand & appreciate this new concept – tax-free benefits that are available when they are needed the most, when the employees actually have the health, dental & / or vision care costs.

The Employee Health Spending Account is simply the most convenient & efficient way to handle health care expenses – tax-free!

Rather than taking more time, your time will be freed up.

No, this is a “pay as you claim” plan, employers make contributions to the plan only as required to fund claims as they are submitted. Claims are usually submitted once per month or at your discretion, whenever convenient.

No.  We believe you are better served holding onto your money and collecting the interest.  You send in the appropriate funds only with submitted claims.

Many employers set up a separate account with their main banking partner and every month deposit the same dollar amount they were / could have been spending for premiums with a conventional insurance company, or they deposit the pro-rated Employee Health Spending Account credits / dollars they have committed to the EHSAs, and then draw on the Private Health Services Plan account only when required (by transferring funds into cash flow) to cover employees’ claims.  Other employers simply fund PHSP claims, upon presentation, from monthly cash flow.  The Puhl / Private Health Services Plan provides choices. You have control.

Electronic Funds Transfer (EFT) by Employer

 If your Company uses EFT for your payroll, the most convenient payment method is to use your bank to transfer the required PHSP funds to the BMO / Puhl / Private Health Services Plan Claim Reimbursement Trust Account.  This is a ‘no hassle’ system; there is no need to change your current banking arrangements.

When you send in your employees’ claim envelopes, we adjudicate & process the claims, and then e-mail you the correct $ amount due. You would then use your banking system to transfer the correct $ amount to our BMO / PHSP Claim Reimbursement Trust Account (correct every time).

The TRAC online system can operate in 2 ways.

  1. You submit your Company’s claim(s) to the Puhl / PHSP Claims Dept. & our adjudicators double-check claim totals. We fax or e-mail you a ONE USE EFT cheque along with the correct dollar amount required to pay your claim(s) (includes cost of processing & any applicable taxes). You authorize & return the ONE USE EFT cheque. We receive the $ amount of the ONE USE EFT cheque from your bank & then EFT your funds to your employees’ personal accounts. This ONE USE EFT Cheque System is both fast & error free and eliminates the problems associated with ineligible or incorrectly added receipts.
  2. You add your receipts & complete your Confidential Claim envelope and submit to the Puhl / PHSP Claims Dept. along with your corporate cheque for the correct amount (including all applicable taxes and cost of processing). Claim receipts that are ineligible or added incorrectly are ‘caught’ by our claim adjudicators and subsequently change the $ amount required from you. Our request to you for another corporate cheque with the new total significantly increases the time it takes to process your claim(s) and therefore also increases the time it takes for you to receive your refund. This delay could conceivably add weeks to your ‘wait’ time.

Note: Our experience has proven that method #1 is ‘hands down’ the preferred payment method for everyone – employers, employees & medical service providers.

Your employees turn in their claim envelopes to your plan administrator who sends them to us with the required funds, the Puhl / Private Health Services Plan then reimburses the individual employee. If there are no claims, no money is sent to the Puhl / Private Health Services Plan.

The Puhl / Private Health Services Plan has designed & developed & uses the TRAC online system. TRAC – Technology Reporting for Administration & Claims on–line. The TRAC online system uses the latest on-line technology & is being expanded to allow direct employee interaction.

The TRAC online system has the capability to handle the claim process from start to finish, including electronic notification to both employer & employee that the claim  (shows exact payment to employee) has been paid & there is (shows exact balance) left in the employee’s account.

The TRAC online system covers & reports all transactions from the first monthly contribution to notification at the end of the year of employee options & how to best maximize them. This creates stress-free management & high employee understanding & satisfaction. The TRAC online system delivers like no other system.

The TRAC online system works for your employees providing them with accurate information when they need it. Employees can request their balances at any time & in the near future they will be able to go on-line for instant up-dates.

The Puhl / Private Health Services Plan is committed to researching, developing, & implementing the latest emerging technological innovations.

The TRAC online system – the answer for Administration.

When a Puhl / PHSP / EHSA claim is processed & paid, separate notifications are simultaneously sent to both the employee & the employer confirming the dollar amount of the reimbursement.

At the end of every month both the employee & the employer are e-mailed monthly Reports showing a summary of all employee claims paid in that month.

At the end of the year both the employee & the employer are e-mailed Reports showing a listing of all claims paid in that entire year.

The following Reports of employee / employer detailed information & their delivery are evidence of the superior capabilities of the TRAC online aystem, designed to provide your Plan with clear & efficient delivery of administrative & claim data.

CRA & / or your accounting / financial planning professionals all require that you have employee EHSA & employer PHSP data at your fingertips. TRAC Reports can be requested at any time.

 The TRAC online system delivers the following Reports:

Covered Employees Report

  • Lists covered employees with their individual plan design details.

 Divisions & Categories Report

  • Details of divisions, classes & rate groupings – sent quarterly.

Claim Reimbursement Confirmation Daily Statement

  • Employee statement of claim payment – e-mailed on date of payment.

Claim Reimbursement Confirmation Daily Report

  • Report for employer of employee claim payment – e-mailed on date of payment.

 Monthly Claims Reports

Claim Reimbursement Confirmation Year-to-date Statement

  • Employee year-to-date statement of claim payments.

Claim Reimbursement Confirmation Year-to-Date Statements Report

  • Employer’s report showing employee’s year-to-date summary of claims paid.

Carry-Forward Statement

  • Employee statement showing yearend carryforward options & $$ amounts.

Carry-Forward Statements Report

  • Employer’s report showing employees’ year-end carry-forward $$ amounts.

Expired EHSA Credits Report

  • Employer report showing $$ amount employees did not qualify to spend.

Two Year Credits / Dollars Loss Report

  • Employer report of two years & older credits / dollars forfeited.

Electronic Payment – Employee

  • Employee electronic payment of claim to personal bank account.

Electronic Payment Option – Dentist

  • Electronic payment of claim to dentist.

Terminated Employees Report

  • Employer report showing terminated employees & their claim totals.

Reports & Statements are e-mailed to you via the TRAC online system.

The Puhl / Private Health Services Plan is committed to researching; developing & implementing the latest technological innovations which guarantee our clients have access to the most effective & efficient system available, the TRAC online system.

Visit & bookmark our web site at www.puhlemployeebenefits.com

The CRA, effective October 01 / 02, changed some of their tax reporting requirements.  Insurance companies must now track and report Business Identification for Registered Corporations.

BI(N)s provide time & cost efficiencies that serve the business community well.

Corporations:

  • Corporate T2 Schedule One

Sole Proprietors:

  • Form T2032 of Professional Activities.
  • Line 970 (other expenses)

Individual Health Expenses:

  • Line 330 on your personal tax return

Puhl / PHSP / RRSP’s are only for one year, therefore January 01st of each year, authorization by the employee is required to continue contributions to their RRSP.

Employee receives an Employer Taxable Benefit (Box 14 Income box and Box (code) 40 taxable benefits) with a corresponding offsetting personal RRSP tax receipt, from the Fund Company, for the year corresponding to when the employee received the Employer RRSP contribution.

The funds that are sent to us are protected from criminal activity by a $1,000,000 bond.

The Puhl / Private Health Services Plan handles all administration including claims’ adjudication, reimbursements, & tracking. The Puhl / Private Health Services Plan has designed & developed & uses the TRAC online system.

Your Company’s plan administrator collects & sends all claim envelopes to the Puhl / Private Health Services Plan Claims Dept. for processing. Puhl / Private Health Services Plan claim adjudicators check every claim, process & pay reimbursements within 48 hours. Employees’ copies are returned via the employer in new Puhl / Private Health Services Plan claim envelopes to be used for the employees’ next claims.

  1. Dollar amount of claim for employee knowledge and follow-up
  2. Receipts are required for employee to feel correct to turn in all claims for verification. Allowable health receipts are reviewed by our claim department for accuracy.

No problem, the TRAC online system will catch the over-payment & refund the difference to you, the employer.

  1. Advise your employee to wait & submit his / her claim again when the next EHSA allotment is credited (providing it is before your plan year-end – Dec. 31)
  2. Advise  (on the employee’s claim envelope) of your approval to pay his / her claim in total.
  3. Submit claim  & we will pay up to employee’s remaining EHSA $$ limit & return the difference (between your cheque and the amount deducted from the employee’s EHSA) to you.
  4. Recommend (in Alberta) that your employee considers purchasing the AB Blue Cross non-Group Prescription (Rx) drug / dental Sub Plan. Please call us (403) 221-9300.

This important question requires a very detailed answer: IT Bulletin 529, (paragraphs 5 thru 8) provides direction:

Summary of IT Bulletin 529

  1. Flex credits in the Employee Health Spending Account have no redemptive value and are considered to be notional credit amounts (no cash value to employee).
  2. Reimbursements are for ‘medically necessary’ health expenses with a physician’s written authorization (prescription).
  3. Non-eligible claim reimbursements would / could be considered cash reimbursements to the employee, which creates a problem since EHSA credits must be notional credits. (no cash value to employee).

The reimbursement can only be called a cash payment, since the expense is non-eligible. The employees are receiving a cash value from their EHSA and not a reimbursement for ‘medically necessary’ health expenses.

  1. The CRA imposes a penalty for a violation: the inclusion, in the employee’s income, of the total value of all benefits / credits received to that date from his / her EHSA.  Even though some of the benefits would be qualified ‘medically necessary’ health expenses, all would be considered taxable income. The costs would not be allowed as a business deduction creating a double taxed penalty. The CRA penalties are imposed on both the employer and the employee.

If all the rules are not followed the situation would / could be viewed by CRA to be the result of incompetent administration systems & lack of client due diligence rather than one error on one claim.

Observation:  The self-funding plans that are on the street should be scrutinized by financial planning / accounting professionals for clients’ due diligence.

Each claim should be adjudicated and totals correctly recalculated to avoid creating a situation in which the plan is off-side due to the loss of notional credit status.  No where do we read in the CRA material that a defense can be an “oops” (a little humor) for this potential pitfall of self-funding plans. We do it right.

If an RRSP purchase is available through the employer, New money is used to purchase a Puhl / PHSP / RSP. This new money is money allocated from current year employer deposits (January) and is totally distinct from carried-forward funds from a previous year.

If the employer has designed the Company’s Puhl / Private Health Services Plan to provide the option to carry forward credits, the credits not spent in one year are carried forward into the next year. Employees then have twelve additional months to spend the unspent credits / dollars for health, dental & vision care. After the additional 12 months, any unused carried-forward credits forfeit to the employer.

The TRAC online system pays the claims on a first dollar in, first dollar out basis, so carry-forward credits are spent before new credits.

The TRAC online system notifies the employer annually regarding carry-forward and forfeited credits for each employee.

Substantial claims potentially invite Federal Government tax interpretation (the claims would not be for your average pair of glasses or routine dental fillings). We highly recommend that, prior to submitting an unusual claim or any claims over $5,000 in a calendar year, you seek the written advice of your accounting professional.

Accounting professionals are tax experts & their services are invaluable in providing tax interpretation & claim eligibility. A little extra time spent doing proper due diligence is good business practice with substantial health, dental & vision care claims.

Yearend is considered the same as the Plan yearend, which is December 31 of each calendar year.  Claims should be clearly labeled with the year the expenses occurred & be submitted for reimbursement by Jan. 30 of the next year.  A separate corporate cheque dated with the correct Plan year must be used for each different Plan year’s claim reimbursements.

As an added security measure to monitor a terminated employee’s claim activity, we put into our system, as soon as we are advised, the date the employee will terminate.  When claims come in, we re-open the employee’s Health Spending Account and pay his / her claim(s) (incurred before the termination date) up to his / her remaining balance.  We then re-terminate the employee.

This is a concern that doesn’t occur very often thanks to your Company’s Puhl / PHSP administrator (claims can go through a Puhl / PHSP administrator before they come to us).

 

The TRAC onine system will not allow a payment for a terminated employee (if notified) without a manual over-ride.

When we do receive a claim for a terminated employee we:

  1. Check to make sure that all claim receipts are dated prior to the date of the employee’s termination.
  2. Call your Company’s Puhl / PHSP administrator for written confirmation to pay.
  3. Take the appropriate action.

The CRA states that a terminated employee has access to all credits / dollars that were credited during his / her time of employment, providing the expenses that are being claimed were incurred prior to termination. The Contract states that terminated employees have 30 days after termination to submit qualified expenses or they forfeit the right to claim.

For example: if you have already credited an employee his / her annual $400, the CRA rules & regulations state that he / she is entitled, (until 30 days after termination to claim the full $400 in expenses for the time period up to his / her termination date. You are providing a $400 annual credit for use during the time he / she is employed. The day the employee terminates is the day your obligation in terms of the $400 ceases.

No, unless you (the employer) make a special request to suspend coverage during a defined period of time for a specific situation like maternity leave or when an employee attends school for a short period of time (usually under 15 weeks).  This is typically a time when money is tight and the EHSA goes a long way to assist the employee both emotionally and financially.

We use the latest electronic & technologic innovations. Our state-of-the-art Technology Reporting for Administration & Claims on-line System (TRAC online system) enhances both our level of service & our communication to employees & employers.

The TRAC online system provides an avenue for communicating value to employees while reducing management time requirements. Employees have access to the information they need & employers receive the necessary management reports to appropriately budget for group benefits.

You are on top of Company cash flow with the correct monitoring the TRAC online system provides. The TRAC online system – the #1 System in Canada!

The TRAC online system is programmed to search and update the Employee Health Spending Account status of all employees in terms of the credit / dollar deposit interval that the employer has chosen (based on the employee’s date of hire).  The credit / dollar deposit intervals are semi-annual or annual.

With the semi-annual interval, in January and July (only), the TRAC online system searches each and every employee record, looking for all employees in the semi-annual interval category and records & updates their accounts with the appropriate credits.

The annual deposit interval works the same as the semi-annual deposit interval.  In January (only) of each year the TRAC online system searches each and every employee record looking for all employees that are in the annual interval category and records & updates their accounts with the appropriate credits.

When an employee is first entered into the TRAC online System, the System pro-rates the semi-annual and annual intervals according to his / her initial status. So, if an employee is hired in February and is given an annual interval category, the TRAC online system would provide 11 / 12 credits in the employee’s account and then in January of the following year it would show the appropriate full annual (12 / 12) credits in the employee’s account.

If the interval category first chosen is semi-annual the same method would be followed but the TRAC online system would pro-rate to either January or July, and then in January or July (which ever comes first) the TRAC online system would search and credit the appropriate semi-annual credits to the employees’ accounts.

If an employee changes from one interval category to another during the year (based on date of hire) the TRAC online system will pro-rate the credits / dollars for the correct amount up to the next interval.

The purpose of the TRAC online system is to provide the employee with fast & accurate EHSA history, activity & credit / dollar balances.  For an employee without access to a personal e-mail address, we will assign the Company PHSP administrator’s confidential e-mail address as the employee’s personal e-mail address.

The TRAC online system will then e-mail employees’ EHSA Statements & other pertinent information to the administrator’s e-mail address for distribution to the applicable employees.

Many employees use their children’s’ e-mail addresses to receive EHSA Statements. The point here is that e-mail delivery is important.

Please help the TRAC online system provide you with timely EHSA Statements by advising us as soon as possible of your personal e-mail address.

Thank you again for your assistance.

Many companies provide quiet, confidential access to a computer terminal in their offices & / or site locations. With limited instruction employees can be using a computer, perhaps for the first time. All employees can access important necessary Puhl / Private Health Services Plan forms & information if you, as their employer, provide & support computer access.

In Alberta, employees should apply for the AB Government Blue Cross non-Group Plan (if within 31 days from ending Blue Cross coverage with a former employer, there is no waiting period). Coverage will be from the date the previous coverage terminated.

New employees (Alberta only) with no prior coverage should apply immediately for the Alberta Government non-Group Plan. There is a three-month waiting period during which premiums are collected but claims are not paid. Best to apply ASAP from date of hire to minimize the waiting period.

New employees (rest of Canada) with no prior coverage should apply immediately for Sub Plan B & also obtain information on their Provincial Rx drug plan(s).

All medically necessary expenses not covered by these Sub Plans can be put through the EHSA / PHSP.

Our Sub Plans, which cover dental expenses, should be considered for these types of expenses.  With all Sub Plans, if the employee can collect more in claims than he / she pays in premiums, he / she should use a Sub Plan.  Premiums are paid by the Employee Health Spending Account and the benefits are enhanced by the amount that is received back that exceeds the premiums paid.

The premiums are eligible EHSA expenses & are processed through your Employee Health Spending Account. Sub Plan B premiums work the same way, the AB Government Blue Cross non-Group Plan is payable quarterly (not monthly) & is included with your Alberta Health Care Insurance statement. If single, the single rate is charged, if Alberta Health Care is billed at the family rate, the AB Government Blue Cross non-Group Sub Plan is also billed at the family rate, payable quarterly.

Only the AB Government non-Group Sub Plan premiums can go through your EHSA not the regular AB Government Medicare (Alberta Health Care Insurance) premiums.

You may choose one of the following two methods (both methods are eligible EHSA expenses):

 Annual or Pro-rated

 Annual premiums, if chosen, are due January of each year.  When the Catastrophic Health Base Plan is purchased, the first year’s premiums are charged at $15 per month (plus applicable taxes), annualized to the next year.  Then in January the $150 annual premium (plus applicable taxes) is charged.

Example of Pro-rated payment of premiums:  if you purchase the Catastrophic Health Base Plan in August:  $15 X 5 (months until January) = $75 (plus applicable taxes) would be the annual premium for the first year with the next annual premium due in January of the following year (for the annual amount of $150 plus applicable taxes).

The payments are deposited to the BMO Bank and are payable to Citadel Life.

An employee no longer has access to Employee Health Spending Account monies upon termination unless other arrangements have been made with you, the employer.

When an employee is terminated, contact the Private Health Services Plan – via fax or e-mail advising of the termination.

The Employment Standards Code does not require an employer to make any payments to the employee or pay for any benefits during maternity or parental leave. However, if an employer has a benefits plan, which includes sick leave for employees, obligations may arise under Human Rights legislation.  For additional information please see the following web page:  www3.gov.ab.ca/hre/employmentstandards/about/matadopt.asp.

Enter their official start date of employment with the company. Employees cannot submit claims with service dates prior to their Hire Date. Please note that if you set a Hire Date in the past, the balance will generate from there as well as possibly carry over amounts.

If you want the full balance to be available to the employee, set their hire date the same as their class start date (e.g. Jan 1st class start, Jan 1st hire dare – this will generate a full balance).

The TRAC online system has been designed to register an employee on the first day of the month in which they become eligible. So if an employee starts January 8 and your plan has a 3-month waiting period, (unless you enter a different date in the Effective Date space on the Employee’s Enrollment form), the employee’s Employee Health Spending Account would become effective April 1, (not April 8). If you want your employee to become effective on May 1 you would enter May 1 on the Employee Enrollment form under Effective Date. All EHSA Effective Dates must be the first day of a month.

Every new employee or any employee who changes status needs to complete an enrollment / change form. Your enrollment kit contains these forms. All forms must be completed & returned to the Private Health Services Plan office as soon as possible. The Private Health Services Plan has designed & developed & uses the TRAC online system.

Your Private Health Services Plan has an employer-determined waiting period; common waiting periods are 3, 6, 9 & 12 months. The waiting period may be different for each employee classification.

For example, corporate circumstances may create the need to recruit an individual with a specific skill-set. For this prospective employee, offering employee benefits from the first day of employment could prove to be the critical perk’ in successful recruiting. Another example of exercising the right to change waiting periods is when initially starting the plan you may choose to have all employees go on immediately or have the waiting period apply to only certain employees (for example ones with less than 3 months with the Company).

Always e-mail any unique changes you wish to make so we can adjust the TRAC online system for that individual employee’s waiting period.

 

Qualified employees are arm’s-length, full-time employees who have three months service since they last became employed by a business carried on by you, a business in which you are a majority interest partner, or a business carried on by a corporation affiliated with you. Temporary or seasonal workers do not qualify as employees for Puhl / PHSP purposes.

Arm’s-length employees are generally employees who are not related to you and not carrying on your business with you, for example, as your partners.  For more details see Non-arm’s-length transaction below.

Insurable persons are people to whom coverage is extended and who are:

  • qualified employees; or
  • people who would be qualified employees if they had worked for you for three months; or
  • people carrying on your business (including yourself and your partners)

Non-arm’s-length transaction – CRA’s definition

A non-arm’s-length transaction includes a transaction between people who are related, such as members of a family.  An example of a non-arm’s-length transaction would be the sale of property between a husband and wife, or a parent and child.  For more details on non-arm’s-length transactions, see Interpretation Bulletin IT – 419, Meaning of Arm’s-Length.

We use EI’s definition. Our logic is if EI considers the person an employee, an employee he / she is. EI’s definitions of full and part-time employees are as follows:

 The Employment Insurance Act defines full time employment as: employed persons working a full work week.

  1. (1) A full work week of a claimant, other than a claimant referred to in section 29 or 30, is the number of hours, days or shifts normally worked in a calendar week by persons in the claimant’s grade, class or shift at the factory, workshop or other premises at which the claimant is or was employed.

If you would like to know what the labor codes are around hours of work check out: http://www3.gov.ab.ca/hre/employmentstandards/abour/hours.asp#1 (this tells you how many hours employers are actually allowed to ask you to work).

 A full-time employee is:

  • a person required to give continuous service, who is normally required to work the full-time hours of his occupational group,
  • an employee who met the definition of full-time employee, in effect prior to July 4, 1994 will remain a full-time employee as long as:

The Assigned Work Week (AWW) does not fall below 30 hours a week, and there is no break in employment of more than one working day.

Note: these employees are called “grandfathered employees”. The grandfather protection is maintained even if the number of hours fluctuates above 30 hours per week; it is lost if the number of hours is reduced to below 30 hours per week.

  • a person occupying two or more part-time positions where the aggregate of the results obtained by dividing the number of hours the employee is scheduled to work by the normal hours of work for the full-time position is equal to or greater than 1. Examples of this situation are described in the Special Bulletin 1994-

A part-time employee is:

an employee who is required to work an average of at least 23 hours per week but who is not a full-time employee,(except the grandfathered employees described above).

IT-519R2 – Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction (item #68) states:

Proper receipts must support all amounts claimed as qualifying medical expenses (including travel expenses).  A receipt should indicate the purpose of the payment, the date of the payment, the patient for whom the payment was made and, if applicable, the medical practitioner, dentist, pharmacist, nurse, or optometrist who prescribed the purchase or gave the service.

A cancelled cheque is not acceptable as a substitute for a proper receipt.  If required forms, receipts or other supporting documents are not filed with the income tax return, such as when the return is electronically filed (E-filed), they should nevertheless be retained and readily available as they may subsequently be requested as proof of the claim(s) being made or in support of the information being reported.

Please e-mail the Private Health Services Plan office & we will get you what you need quickly & efficiently. Visit our web page at www.puhlemployeebenefits.com  (please bookmark for future visits).

Of course all requested information is important.  However, the most troublesome spots seem to be the Employee Category, the date of hire and the employee e-mail address.

Please be sure that these sections on the employee enrollment form are completed.  The correct employee category comes from the Employer Divisions & Categories Report and the Covered Employee Report available through the TRAC online system. Please e-mail us at phsp@puhlemployeebenefits.com.

We send these reports to you quarterly.

Yes, the Puhl / Private Health Services Plan can be used as a ‘top-up’ plan for health, dental & vision care expenses not covered under a conventional plan or the Puhl / Private Health Services Plan can be used to cover 100% of eligible health care claims.

FOR ADMINISTRATORS - WITHOUT EMPLOYEES

The problem we have is that we do not know who is calling, and an easy question such as: “ Have you received my claim yet?” can create frustrations on both ends.

The Human Rights and Privacy Rules and Regulations apply in this situation. Therefore we are requesting any questions to be e-mailed to us. Also now, we can look at the question(s) and respond, in an appropriate time, back to the sender via e-mail that the Employee has provided to us.

If the Employee or an Employee’s spouse calls us, we will respond by e-mail with an answer to the proposed question(s) as we are limited on the verbal responses to questions over the telephone.

Once we have all corporate & employee enrollment data entered, the TRAC online system takes over.

Claim processing is simple & straight forward: you complete an individual claim envelope and submit your original health care receipts with a Company cheque for the claim total plus processing fees & applicable taxes. Re-payments are made by cheque or by (what most owners prefer) electronic deposit into their personal bank accounts.

The TRAC on-line System provides Reports & Statements for all aspects of the Employee Health Spending Account program. With the TRAC online system, administration is just a click away.

It is normal to feel hesitant & / or concerned when faced with something new, but let me assure you that after your very first ‘go’ with the TRAC online system, you will be very impressed & comfortable with the whole process.

The Employee Health Spending Account is simply the most convenient & efficient way to handle health care expenses – tax-free.

No.  We believe you are better served when you hold onto your money and collect the interest.

This is a “pay as you claim” plan, employers make contributions to the plan only as required to fund claims as they are submitted. Claims are usually submitted once per month or at your discretion, whenever convenient, at which time you send in the appropriate funds.

The percent cost of processing covers our overhead expenses: employees, rent, utilities, phones, licenses, insurance, supplies, computer equipment, instruments, etc.

The $5.00 is an accounting and administration fee, which covers the cost of bank funds transfers or the authorizing and releasing of cheques, the cost of envelopes & stamps and the expenses involved in the research, development & maintenance of accounting systems & reports necessary for a Canada Revenue Agency audit.

The set-up fee (if applicable) covers the set-up costs to put the Puhl / PHSP program in place plus initial enrollment expenses including the cost of preparing the Contract.

Electronic Funds Transfer (EFT) by Employer

You send your claim(s) to us & our adjudicators double-check your totals. We fax or e-mail you a ONE USE EFT cheque along with the correct dollar amount required to pay your claim(s) (includes cost of processing & any applicable taxes). You complete the ONE USE EFT cheque & fax back to us. We receive the $ amount of the cheque from your bank & then EFT your funds to your Company’s PHSP claim(s) personal account(s). This EFT system is both fast & error free and eliminates the problems associated with ineligible or incorrectly added receipts.

The Puhl / Private Health Services Plan handles all the administration including claims adjudication, repayment, & tracking. You are sent a confirmation of reimbursement of claims when paid & a monthly summary of all transactions. The Puhl / Private Health Services Plan has designed, developed & uses the TRAC online system.

IT-519R2 – Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction (item #68) states:

Proper receipts must support all amounts claimed as qualifying medical expenses (including travel expenses).  A receipt should indicate the purpose of the payment, the date of the payment, the patient for whom the payment was made and, if applicable, the medical practitioner, dentist, pharmacist, nurse, or optometrist who prescribed the purchase or gave the service.

A cancelled cheque or a till receipt is not acceptable as a substitute for a proper receipt.  If required forms, receipts or other supporting documents are not filed with the income tax return, such as when the return is electronically filed (E-filed), they should nevertheless be retained and readily available as they may subsequently be requested as proof of the claims being made or in support of the information being reported.

The test that CRA would give it in an audit is ‘would you pay this amount for your employees”?

If you had no employees, the test would be ‘would an employee in a similar company get this amount’?

Many employers simply fund Puhl / PHSP claims, upon presentation, from monthly cash flow.

Other employers set up a separate account with their main banking partner – every month depositing the same dollar amount they were / could have been spending for premiums with a conventional insurance company, and then drawing on the Private Health Services Plan account only when required (by transferring funds into cash flow) to cover claims.

The Puhl / Private Health Services Plan provides choices. You have control!

Corporations & Sole Proprietors & individuals are as follows:

Corporations:

  • Corporate T2 Schedule One

Sole Proprietors:

  • Form T2032 of Professional Activities
  • Line 970 (other expenses)

Puhl / PHSP

  • Provides a personal tax free benefit

Please consult your accounting professional about tax reporting, he / she is the expert.

All you have to do to have your tax-free claim reimbursements electronically deposited (EFT) into your personal bank account is:

  1. Include with your claim or fax  [(403) 221-9309] a void cheque   or
  2. Your bank account information    and
  3. That’s it – fast, easy & convenient for you.

Note: by choosing this option we can also EFT your dentist or other medical service provider directly.

Substantial claims potentially invite Federal Government tax interpretation (the claims would not be for your average pair of glasses or routine dental fillings). We highly recommend that, prior to submitting an unusual claim or any claims over $10,000 in a calendar year, you seek the written advice of your accounting professional.

Accounting professionals are tax experts & their services are invaluable in providing tax interpretation & claim eligibility. A little extra time spent doing proper due diligence is good business practice with substantial health, dental & vision care claims.

This important question requires a very detailed answer, IT Bulletin 529, (paragraphs 5 thru 8) provides direction: our TRAC system monitors so only qualified CRRA recipients are paid.

Summary of IT 529

  1. Flex credits in the Employee Health Spending Account have no redemptive value and are considered to be notional credit amounts (no cash value to participant).
  2. Reimbursements are for ‘medically necessary’ health expenses with a physician’s written authorization (prescription).
  3. Non-eligible claim reimbursements would / could be considered cash payments to the employee, which creates a problem since EHSAs must be part of a notional credit system (no cash value to participant).

The reimbursement can only be called a cash payment, since the expense is not eligible. The participant is receiving a cash value from their EHSA and not a reimbursement for ‘medically necessary’ health expenses.

  1. The CRA imposes a penalty for a violation: the inclusion, in the participant’s income, of the total value of all benefits / credits received to that date from his / her EHSA.  Even though some of the benefits would qualify as ‘medically necessary’ health expenses, all would be considered taxable income.

Yearend is considered the same as the Plan yearend, which is December 31 of each calendar year.  Claims should be clearly labeled with the year the expenses occurred & be submitted for reimbursement by March 31 of the next year.  A separate corporate cheque dated with the correct Plan year should be used for each different Plan year’s claim reimbursements.

The Puhl / Private Health Services Plan has designed, developed & uses the TRAC online system. TRAC – Technology Reporting for Administration & Claims onine.

The TRAC online system provides an avenue for communicating value to employees while reducing management time requirements. Employees have access to the information they need & employers receive the necessary management reports to appropriately budget for group benefits.

We use the latest electronic & technological innovations. Our state-of-the-art TRAC online system enhances our level of service & communication to employees & employers.

You are on top of Company cash flow with the correct monitoring that the TRAC online system provides. The TRAC online system – the #1 System in Canada.

The Puhl / Private Health Services Plan is committed to researching, developing, & implementing the latest technological innovations. TRAC online system uses the latest on-line technology & is being expanded to allow direct employee interaction.

The TRAC online system has the capability to handle the claim process from start to finish, including electronic notification to both employer & employee that the claim  (shows exact payment to employee) has been paid & there is (shows exact balance) left in the employee’s account.

The TRAC online System covers & reports all transactions from the first monthly contribution to notification at the end of the year of employee options & how to best maximize them. This creates stress-free management, high employee understanding & satisfaction. The TRAC online system delivers like no other system.

The TRAC online system – the answer for Administration.

The following administration reports & statements of employee / employer detailed information & their delivery are evidence of the superior capabilities of the TRAC online system, designed to provide your plan with clear & efficient delivery of administrative & claim data.

CRA & / or your accounting  / financial planning professionals all require that you have employee EHSA & employer Puhl / PHSP data at your fingertips.

The TRAC online system delivers the following Puhl / PHSP Administration Reports & Statements.

Claim Reimbursement Confirmation Daily Statement

  • Employee statement of claim payment – e-mailed on day of payment.

Claim Reimbursement Confirmation Daily Statements Report

  • Report for employer of employees claim payment statements  e-mailed on day of payment.

Monthly Claim Reimbursement Confirmations Statements Report

  • Employer report showing employees’ current month claims paid.

Year-to-date Claim Reimbursement Confirmations Statement

  • Employee year-to-date statement of claim payments.

Year-to-date Claim Reimbursement Confirmations Statements Report

  • Employer report of statements showing employees’ year-to-date summary of claims paid.

Electronic Payment Service

  • Employee electronic payment of claim to personal bank account.

Reports & Statements are e-mailed to you via the TRAC online system.

The Private Health Services Plan is committed to researching, developing & implementing the latest technological innovations, which guarantee our clients have access to the most effective & efficient system available, the TRAC on-line System.

 Please bookmark our web site at www.puhlemployeebenefits.com

Every PHSP participant who changes status needs to complete an enrollment / change form. Your enrollment kit contains these forms. All forms must be completed & returned to the Private Health Services Plan office as soon as possible. The Private Health Services Plan has designed, developed & uses the TRAC online system.