“I’m thinking about employee benefits for my incorporated firm. I currently have a benefit plan – but it does not cover the type of health & wellness services that my employees require. I would like to know how this plan works and what it would cost to join the Direct Benefits Plan.
What is the Direct Co-ops Benefits Plan?
Maintaining your families good health can be very expensive. Due to limitations in most standard group insurance plans – this may limit the very services that you need the most. Typical Health and Dental Insurance policies provides benefits you may not need or want but must be included and paid for.
The solution is to provide tax free Health and Dental benefits for your employees and their families or key employees while at the same time making these expenses tax deductible to your company.
You can:
- Top-up your existing benefit plan or implement as a stand-alone program
- Customize a Benefits Plan to meet the specific needs of your industry
- Create a spending account for Key Employees
What is a Private Health Services Plan – Direct Benefits Plan? It is a Canada Revenue Agency approved health & welfare trust that allows self-employed individuals and Corporations to tax-deduct their health and dental expenses in a tax-effective and cost-efficient manner. The trust takes advantage of Section 248(1) of the Income Tax Act. This particular plan has been named the “Direct Benefits Plan” and is administered by MEBA / McKee Employee Benefits Administration Ltd.
Why use an Administrator like MEBA / McKee Employee Benefits Administration Ltd.? CRA insists upon a 3rd Party Trustee and Administrator to adjudicate for accuracy and compliance.
How is the plan administered? You pay for the expense and submit it to MEBA along with an administration fee and any applicable taxes for reimbursement. You will then be reimbursed (tax free) for the actual expense less the administration fee. Your tax-deductible expense includes the administration fee.
What expenses qualify? The following are qualified expenses under a Private Health Services Plan (PHSP). This is only a partial list. Allowable expenses must qualify as outlined in the Income Tax Act (IT-519R2). If you have already used any of the following services this year and have paid for the expense out of your pocket with after-tax dollars, then you need to start a PHSP now so you can turn the expense into pre-tax value before it is lost forever.
| Acupuncture | Fees paid to health institute (prescribed by a Doctor) | Pediatrician |
| Alcoholism treatment | Guide dog | Physician |
| Ambulance | Gynecologist | Physiotherapist |
| Anesthetist | Hearing aids and batteries | Post-natal treatments |
| Artificial limbs | Hospital bills | Pre-natal care |
| Birth control pills | Hydrotherapy | Prescription medicine |
| Blood tests | Insulin treatments | Psychiatrist |
| Braces | Lab tests | Psychoanalyst |
| Cardiographs | Laser eye surgery | Psychologist |
| Chinese medicine | Lodging (away from home for outpatient care) | Psychotherapy |
| Chiropractor | Metabolism tests | Radium therapy |
| Contact lenses | Naturopath | Registered massage therapy |
| Contraceptive devices | Neurologist | Special school costs for the handicapped |
| Crowns (dental) | Nursing home (including board & meals) | Spinal fluid test |
| Crutches | Obstetrician | Splints |
| Dental treatment | Operating room costs | Sterilization |
| Dental implants | Ophthalmologist | Surgeons |
| Dental X-rays | Optician | Telephone or TV equipment to assist the hearing impaired |
| Dentures | Oral surgery | Therapy equipment |
| Dermatologist | Organ transplant | Transportation expenses (relative to health care) |
| Diagnostic fees | Orthodontist | Ultraviolet ray treatments |
| Diapers for incontinence | Orthopedic shoes | Vaccines |
| Drug addiction therapy | Orthopedist | Vasectomy |
| Drugs (prescription) | Osteopath | Viagra |
| Eyeglasses | Oxygen and oxygen equipment | Vitamins (if prescribed) |
| Wheelchair | X-Rays |
The process of obtaining a no-obligation quotation for your firm is fast, confidential and accurate. For those who currently have a group benefit plan or those who don’t – contact us about the Direct Benefits Plan!
What is included in the Direct Benefits Plan?
- $100,000 Accidental Death & Dismemberment Insurance (member only)
- Out of Province / Country Emergency Hospital / Medical Travel Insurance (member and/or family)
- Monthly cost: $4.92 single coverage / $7.65 family coverage
- PLUS: Process all health & dental claims, reimbursed tax-free / and a tax deductible expense to your company**
**Example of claims submission:
Dental claim for $1,000.00
You pay:
| 1. Cost of treatment | $1000.00 | |
| 2. Administration fee | 10% | $100.00 |
| 3. Ontario Retail Sales Tax | 8% | $88.00 |
| 4. Premium Tax | 2% | $22.00 |
| Total Paid to Claims Administrator | $1210.00 |
Why pay the cost of treatment plus administration fees & taxes?
You are not eligible for a full tax deduction unless proper claims adjudication, record keeping & documentation is in place. $1,100 + applicable taxes are an expense to your organization.
Example of cost savings:
| Tax Rate | Pre-Tax Income (No Cost Plus) | Pre-Tax Income (With Cost Plus) |
| 40% | $1667.00 | $1210.00 |
| 45% | $1818.00 | $1210.00 |
| 50% | $2000.00 | $1210.00 |
Interested? Contact us today for more information!
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McKee Employee Benefits Administration Ltd. (MEBA) has as its prime target and function, Employee Benefits Consulting, Management and Administration. Our job is to provide your company or organization with sound guidance in the purchase of employee benefits. Our obligation is to do that in a manner that is consistent with the goals of your organization and to do it in the most cost effective manner possible, now and into the future.
We create benefit programs that are ideally suited to each client and support those programs with an uncommon level of service. We combine professionalism with an equal degree of commitment and responsiveness unique in any industry.
MEBA is an independent brokerage. MEBA represents the majority of insurance companies in Canada, which allows us to meets the needs of our clients in a bias free manner.