Q: Who benefits from the plan ?
A: Our primary clients are owner/managers of corporations who need access to comprehensive medical coverage.Q: How Does the plan work ?
A: The owner/manager/employee incurs a medical expense which he pays. He then submits the medical receipts to the corporation for the corporation to submit a claim to PHS Admistration for the amount of the receipts plus an administration fee plus applicable GST on the administration fee. The administration fee is the greater of /claim or 10% of claim. PHS Administration reviews the claim and issues a cheque for the full amount of eligible medical receipts to the owner/manager/employee directly.
Q: Is the refund paid to me by PHS Administration a taxable benefit?
A: No, the refund is not taxable
Q: Is the amount submitted to PHS Administration a tax deduction to the corporation ?
A: Yes this amount is considered an eligible expense of the corporation to reduce the corporations taxable income.
Q: Are my dependants covered by the plan ?
A: Yes, 100% coverage is available to your dependants
Q: Are there claim limits under this plan ?
A: No, all medical expenses allowable by CCRA are approved.
Q: What are the tax advantages for the owner/manager?
A: A Private Health Services Plan allows the corporation to pay medical expenses of the owner/manager with pre-tax dollars rather than the owner/manager paying them personally with after-tax dollars. In addition, their is no threshhold amount required to be met before a tax benefit is realized. To realize the 16% medical expense tax credit an individual must have eligible medical expenses that exceed the lesser of and 3% of net income.
EXAMPLE:
Bob is an owner/manager of his own business and lives in Alberta and has a net taxable income of $ 50,000/yr and decides to have laser eye surgery which costs $ 2500.
Costs without the plan:
laser surgery cost paid with after tax dollars less eligible medical expense tax credit of (16% x (2500-(50000x3%))) equals a net cost of $ 2,340. Don't forget this amount is paid in after-tax dollars so the real cost is higher depending on Bob's marginal tax rate. Assuming a 32% marginal tax rate Bob would have to earn $ 3441 to pay his net medical costs after taxes.
Costs with a Private Health Services Plan:
Bob's refund from PHS Administration is tax free.
The corporation would pay PHS Administrators the amount of the claim plus a 10% handling fee.The combined corporate tax rate in Alberta is 18.4%. Therefore the corporations net after tax cost would be $ 2750 less the 18.4% tax benefit which equals
Net Tax Benefit of Private Health Service Plan:
The net after tax benefit of having the Private Health Services Plan for Bob is $ 3441-2244= $ 1197.
HOW DO I GET STARTED ?
Goto the contact page and send us an e-mail for an application form which we will e-mail or fax back to you.
