What is a Zudura Private Health Service Plan (PHSP) and how does it work ?
A Zudura Private Health Services Plan (PHSP) is a Canadian plan which can be used in financing the health care costs of your employees (Plan Members). PHSP's were introduced in 1989 by the Canada Revenue Agency (CRA) in their interpretation bulletin IT-339R2. Today, they are one of the most popular forms of health spending accounts in the Canadian market.
Who Qualifies ?
If you are a Canadian incorporated company, pay income taxes and have at least one arm's length employee, you can take advantage of a Zudura PHSP.
No full-time permanent employee can be excluded from participating in your Zudura PHSP, unless they voluntarily opt out (note that any “opt outs” should be documented and kept on file at the corporation). You (in your role as a Plan Sponsor) are able to control the costs of operating a Zudura PHSP plan by deciding the annual limit employees are offered and further assigning Plan Members into different classes of coverage (discussed further below).
I currently subscribe to a traditional health benefits plan, why should i switch ?
Traditional benefit premiums are continuously on the rise, year-over-year premiums tend to increase, this ensurs the benefit provider healthy profit margins. There are limits to the coverage you get and usually these plans offer only partial reimbursements (e.g. 80% coverage). In some scenarios people do not claim sufficient amounts to cover the premiums they are paying. By establishing a Zudura PHSP, you pay only for what you use – adding up to significant savings each year, with the bonus of potential tax savings. Of course, cost savings aren’t always the full story, but when you factor in the other advantages over traditional benefit plans, including more comprehensive coverage, 100% reimbursement, greater flexibility and the simplicity in how it works, the rationale is compelling.
What are the major advantages of a Zudura PHSP?
Major advantages of a Zudura PHSP include:
- Full Reimbursement – The entire amount of the eligible benefit claim is reimbursed at 100% up to the yearly limit that you will set.
- Tax Savings– Eligible benefits are fully deductible as a business expense and are tax-free for the Plan Member, reducing taxes for both.
- Greater Control – You decide on the benefit limit for all Plan Members (can be divided by classes e.g. Executives $8,000/year, Managers $6,000/year & Employees $2,000/year).
- Choice - The Plan Members are given greater access to the medical service that they want and/or require.
- Universal Coverage – Get a wider range of coverage compared to traditional benefit plans.
- Collaborate with other benefit plans – By setting up a Zudura PHSP plan members may utilize it to cover any shortfall and/or cover expenses not covered by traditional benefit providers.
- Simplicity– As traditional benefit plans have become increasingly complex and costly. A Zudura PHSP is an easy way to manage your Health and Dental costs. You pay only for what you use, and detailed reporting is provided to you (at no charge) at the end of each fiscal year to use all expenses including the administrative fee as a business expense.
- No premiums - With traditional benefit providers there is always a worry that monthly premiums will increase as they correlate with benefit usage in the hands of employees. With a Zudura PHSP there are no premiums and you control the costs.
What is covered under the plan ?
The range of eligible expenses under a Zudura PHSP is extensive, much more coverage compared to traditional benefits, this is its greatest asset. Please see our "Resources" page to see "Eligible Medical Expenses" & "Authorized Medical/Dental Service Providers".
How much should I set as my class limits ?
Class limits are totally up to you, however, we advise clients that a reasonable maximum benefit level per year should be used. CRA does make provisions for “reasonableness”, so in order to adhere to this, our recommendation is that the highest limit within the Zudura PHSP does not exceed 10 times that of the lowest limit.
How do I establish the start date for eligible expenses in my Zudura PHSP for my Plan Members ?
You will specify the Effective Date. This is done by establishing your first “benefit year”. E.g. If your company year-end is December, 2018 and you register for the plan on June, 2018, the effective period for the first benefit year would be January, 2018 to December, 2018. Therefore, claims made by Plan Members will be able to retrospectively be claimed for the entire year.
What is the deadline for submitting a claim ? and how often can Plan Members submit claims ?
We recommend all claims to be submitted within 30 days of the year-end, therefore Zudura Health can provide the Plan Sponsor with the annual report on a timely basis, to be used for tax deduction.
In regards to submitting claims, Plan Members can submit as many claims as they would like and for any amount (coverage only up to the limit assigned). There are no surcharges or hidden fees.
How do I ensure my information is private and safe ?
Zudura Health recognizes the importance of privacy and security of the information about your medical benefits plan, health & dental plan provisions, employee benefits claims, and medical coverage receipts. We have established a second computer network within our central office that is completely separate from the Internet. There are no wireless cards, or cable connections to the Intranet making our computers and network system completely independent and free standing within our business premises. The standard physical safeguards, security locks and protection are in place to protect the computers from physical interference by unauthorized entities.
How do Plan Members submit documentation to Zudura Health ? and what should be included ?
Submitting a claim online is easy, simply click on the “Submit a Claim” tab, which is only accessible once you have logged-in with your username and password. The required information will be automatically populated. Therefore, all you do is attach all relevant files (such as invoice, receipts and payment cheques). Once you are done attaching all your files, click the “Send” Button. Now you are all done, your claim will be processed by Zudura Health. Plan members are also able to submit documents via mail, fax and mobile website (mobile app coming soon).
Plan Members should include all original documents relating to the transaction with the health and dental practitioner.
What is the time period for receiving reimbursements/claims ?
Your Plan Members will see their reimbursements within two weeks of Zudura Health receiving the claim.
What is the role of my accountant in establishing a Zudura PHSP ?
Though very straightforward to use, a Zudura PHSP does require proper explanation and understanding before being adopted by a business. As a Zudura PHSP directly involve matters of taxation, it is recommended that you discuss your own particular needs with your tax professional or accountant.
How much does it cost ?
All Zudura PHSP costs are covered by the Plan Sponsor:
- Initial Setup Fee: $0*
- Re-occurring annual Fee: $99
- 7% Administration Fee on claims, plus applicable taxes
- There are no surcharges or hidden fees
*Limited Time Offer for the Initial Setup Fee effective from September 1, 2017 until August 28, 2018. For plan sponsor's that register during this Limited Time Offer, the Initial Setup Fee is $0.