Flexible Accounts

Question 1

Canadian Flexible Accounts

Types

Answer 1

• HSA = Health SPENDING account
• Personal Account
• Perquisite

Question 2

Canadian Flexible Accounts

ER Advantages of Flexible Accounts

Answer 2

• Expand benefits with little additional ER costs
• Offer benefits that might appeal to small segment of EEs
• Contain costs
• Test appeal without committing to full-choice program

Question 3

Canadian Flexible Accounts

Benefits of Health Spending Accounts

Answer 3

• Deliver compensation tax-effectively
• Encourage EEs to self-insure
• Replace existing coverage

Question 4

Canadian Flexible Accounts

Health Spending Accounts: Requirements

Answer 4

• Annual Elections
• Rollover/Forfeiture (Either Unused Balance or Unpaid Claims)

Question 5

Canadian Flexible Accounts

Health Spending Accounts: Eligible Expenses

Answer 5

Any health-related expense eligible for tax credit

• Cost-sharing
• Dental
• Devices

Question 6

Canadian Flexible Accounts

Advantages of HSAs Replacing Traditional Health/Dental

Answer 6

• ER contribution is fixed
• Tax effective
• Provide flexibility
• Simple to administer and communicate
• ER has control over growth of costs
• EEs have control over use of funds
• Plan documentation straight forward

Question 7

Canadian Flexible Accounts

Disadvantages of HSAs Replacing Traditional Health/Dental

Answer 7

• Inadequate coverage for large expenses
• Inequities for some EEs
• Flat contribution means family EEs receive relatively less
• % of pay contribution means lower paid EEs receive less

Question 8

Canadian Flexible Accounts

Balance Impact on Terminations/Retirements/Death for all Flexible Accounts

Answer 8

• HSA = Balances forfeited
• Personal Account = Paid out to beneficiary
• Perquisite = Paid out or forfeited