Attention Incorporated Pharmacy Owners
A Plan for You and All Your Employees: OPA Advantage Plus
In the fall 2017 edition of Ontario Pharmacist we introduced a concept in insurance that is gaining ground with many employers looking to provide some level of benefits to their employees without breaking the bank. Please click here to review the article. Health Care Spending Accounts, or HSAs as they are best known, have been around for some time now, however in most recent years there has been an increase in health plans that include an HSA as part of their commitment to the health and welfare of their employees. As an employer, your maximum cost is known upfront and does not vary, making budgeting easier. Your employees can use the dollars allocated to them as they see fit, as long as the expenses are deemed medical expenses eligible under the list provided by the Canada Revenue Agency, for the purpose of income tax credit.
Effective July 1, 2018, if you’re an owner of an incorporated pharmacy, you will be able to offer a HSA plan with a $2,000 benefit to your employees. In order to offer this plan you must have at least one employee working for you (who is not related to you), and all employees of the same class must be part of the plan.
Not Just an HSA Benefit
To complement the HSA Benefit, OPA has also arranged for additional coverage for further protection for you and your employees, similar to those included in the current OPA Secure Health Plan:
Life Insurance, Dependent Life Insurance and Accidental Death Insurance;
120-day Out-of-Province/Country Emergency Medical Insurance and Travel Assistance; and
Prescription Drug Insurance, for expenses exceeding $1,000 per family per year.
The Prescription Drug Insurance takes away the financial risk from the owner/operator of a pharmacy – for employees and owners. The insured Prescription Drug Plan is priced based on a $2,000 deductible, which translates into an affordable way to protect against the financial risk associated with higher cost medications.
Table of Benefits
I am a pharmacy owner. When can I register my business for the OPA Advantage Plus?
The incorporated pharmacy plan will launch July 1, 2018. To meet this date, the plan administrator, Maximum Benefit, will require that you register and supply the required employee information 45 days in advance of the effective date. Your pharmacy must qualify to register for this plan. To qualify, your business must be incorporated and you must have at least one employee at arm’s length (not related to you or living in your household). Once qualified you will be required to complete an HSA Agreement Form. This form is available on the OPA website.
Do I have to provide this coverage to all employees?
No, but you must cover all employees of the same classification of employees. Employees who have coverage through a spouse can opt out of the insured portion of this plan, however they would still be entitled to receive the benefit of the HSA coverage.
Who pays the premium?
The insured portion of the plan can either be paid by the employee, the employer or shared by both. While the benefit provided through an HSA is well defined at the time of the offer – in the case of this plan, $2,000 per family per year – the cost to the sponsoring employer will be defined based on claims paid plus expenses of paying such claims. In any event, it must be paid by the employer. Please note however, that your cost limit is known up front, which is an advantage for budgeting purposes.
Are the costs of an HSA plan tax deductible as business expenses?
Yes. As the sponsoring employer, you are able to deduct all costs associated with providing the HSA benefit to your employees. In addition, the benefit received by your employees is tax free in their hands.