When you expand your business to Canada, you’re going to hire Canadians to play a role in your workforce. You may need them to work in store or on site. You may also employ them remotely.
As a new employer in Canada, you’ll need to adjust to the labour market. This can mean ensuring you’re paying competitive wages.
In many cases, it will also mean you need to review your benefits offerings. This is an especially important point for companies from countries such as the US, where healthcare is vastly different.
If you’re wondering how to offer health insurance to your Canadian employees, consider health spending accounts (HSAs).
Leveraging Health Spending Accounts in a Government-Funded System
Canada has a public healthcare system, which is funded by taxation. The system covers basic medical care, such as seeing a doctor or visiting a hospital. Canadian citizens pay no out-of-pocket fees for these services, since they’re covered under provincial health plans.
There are many gaps in the Canadian system, however, and Canadians do rely on their employers to help them bridge the gap. Dental care and prescription drugs are two costs Canadians pay for out of pocket on a regular basis.
You could consider providing a traditional health insurance plan, but a new, more flexible option has been gaining favour. Health spending accounts help your employees navigate the gaps in the public system. They also have benefits for you.
Benefits for Your Employees
Traditional health insurance plans often come with caps. Your plan might include $500 for dental or $200 for vision care.
Once those limits are reached, the employee must pay out of pocket. Some plans also have deductibles or co-pays, which also mean the employee pays. If a service or medical item isn’t covered under the plan, the employee will have to foot the bill.
A health spending account is different. HSAs are employer-funded, which means you pay into accounts for your employees. You can add a set amount to the account, and the employee then has that dollar amount to spend on medical services and items every year.
There’s no deductible or co-pay. The employee can use the funds immediately. They can also use the funds for the services they need to pay for. If someone needs a root canal one year and then needs physiotherapy after a car accident the following year, they can use the funds in their HSA to help.
With a traditional plan, they couldn’t do that. The root canal might cost much more than the dental benefit, and physiotherapy might not be covered at all.
Benefits for Employers
Some of the benefits of offering health spending accounts to your Canadian employees should be clear. With an HSA, they can get the coverage they need, when they need it.
How do health spending accounts benefit you as the employer? For one, they’re typically less expensive than traditional plans. They also offer better tax efficiency. You can write off the amount you contribute to the HSA, along with plan administration fees. Insurance isn’t always tax deductible.
Once you’ve made the initial contribution, you can also “top up” accounts for the following year. If an employee has funds left over, you may not need to contribute the full $2,000 or $5,000 to reset for the next year. HSAs can also add value to the business.
Of course, the biggest benefit of an HSA is that it makes you more attractive as an employer. It gives your employees the flexibility they want and the coverage they need. In turn, you can expect a better reputation, lower turnover, and happier employees.
Offer HSAs to Your Employees the Easy Way
Working with a PEO is one great way to offer a benefit like health spending accounts to your Canadian employees. Getting started can be as easy as reaching out to the experts.