This little Piggy likes questions! FAQ Guide A guide to some of the most frequently asked questions related to health spending accounts and some additional tips smart folks should know.
Table of Contents Page What is a Health Spending Account? 1 Who Can Open a Health Spending Account? 1 How Much Can I Put Into a Health Spending Account? 1 How Do I Contribute to my Health Spending Account? 2 What Are the Benefits of a Health Spending Account? 2 Who Is Covered by a Health Spending Account? 2 How Much Experience Does UTC Financial Have? 2 What Happens If I Don t Use The Funds In My Account? 3 Can I Simply Withdraw The Funds From My Account? 3 What is Considered an Eligible Expense? 3 What Are Some Typical Expenses I Can Claim? 4 What Items Are Not Covered? 6 When Can I Submit a Claim? 6 What is Considered Acceptable Proof For a Claim? 7 What Costs Are Associated With Submitting a Claim? 7 What if My Claim Amount Exceeds My HSA Balance? 7 Where Do I Send My Claim? 8 Why Do I Need to Keep My Original Receipts? 8 How Will I Be Reimbursed for Approved Claims? 8 What Fees and Charges Should I Be Aware Of? 9 What Happens In The Event That I Die? 9 HSA 101 Funds Coverage Claiming Other Items
What is a Health Spending Account? A Health Spending Account is a uniquely funded trust account allowing an incorporated employer or incorporated professional to deposit a fixed amount for themselves or an employee to spend on their choice of health-related services. The funds deposited are a tax-free benefit for the recipient or employee and a business expense for the incorporated entity.. The funds are deposited into a trust account in the name of the recipient. The funds are protected and secured for exclusive use by the recipient. When you or an employee incur a claim, a claim form with receipts are sent to UTC Financial. Our company acts as a trust administration and adjudication firm. We adjudicate the claims based on the rules set by Canada Revenue Agency and reimburse you or your employee with the funds available within their health spending account. Who Can Open a Health Spending Account? If you are an incorporated company with multiple employees OR an incorporated single professional in Canada, you may open a health spending account with UTC Financial. Our company offers a Health Spending Account in the form of a Health and Welfare Trust and is managed by the guidelines set by Canada Revenue Agency. These special accounts may only be opened by incorporated entities for the tax-free benefit of full-time Canadian employees. How Much Can I Put Into a Health Spending Account? On your enrolment form, you can choose the amount you wish to deposit into your HSA. The amount should be reasonable given what your company earns and the payment each employee receives for their job function. You can choose one of two schedules: Annual or One-Time Contribution If you choose to set up an annual or onetime contribution, the amount you will receive will be deposited into your health spending account within 30 days of your start date into the plan and you will receive an additional deposit, if applicable, in 12 months. Monthly Contributions If you choose to set up monthly schedule for contributions, you should receive a fixed deposit amount into your health spending account on or near the first of each calendar month provided you are still an active employee of the sponsoring company. 1
How Do I Contribute to my Health Spending Account? When you open an account, you can choose to make a single contribution or make regular monthly deposits into the accounts of you and your employees. For a one-time or annual contribution, you may choose to send a cheque from your incorporated business for the full amount along with your enrolment forms or the banking information for our associates to withdraw the funds from your account using electronic fund transfer (EFT). For monthly deposits, all funds are collected from your incorporated business s banking account each month via EFT. What Are the Benefits of a Health Spending Account? Besides the ability to set a fixed contribution amount each year, the major benefit to most companies and incorporated individuals is taxation. Health Spending Accounts are a full business deduction for the contributing corporation and a tax-free benefit for the recipient. Further, the plans cover more than most traditional insurance plans hence their popularity with employees who have unique or higher healthcare costs they need to cover. Who Is Covered by a Health Spending Account? When you enrol into the plan, you can choose to add a dependent and allow them to submit claims for reimbursement as well. An eligible dependent is anyone related to you by blood or marriage who is financially dependent on you in a given year. This can include your spouse, children, or other relatives who rely on you for financial support within a given tax year, provided they are a resident and citizen of Canada. How Much Experience Does UTC Financial Have? The professionals at UTC financial each have over 6 years of experience and expertise managing health spending accounts across the country. Further, our leadership team has over 13 years of experience offering professional services to customers within the insurance, health, and benefits administration industries. These unique qualities of our team means that UTC Financial has the skills, experts, and professional acumen to manage your funds and support you long-term. 2
What Happens If I Don t Use The Funds In My Account? Once funds have been deposited into your health spending account they are yours for life. These funds are deposited in trust for you and cannot be returned to the sponsoring company. Should you have a balance at the end of the year, the balance rolls-over to the next year for you to use. Considering this, you may choose to save money for a future expense you anticipate or use the funds as needed each year. Either way, any remaining balance will be available to you in the future. Can I Simply Withdraw The Funds From My Account? The funds deposited into your Health Spending Account are held in trust and can be used exclusively for eligible medical and healthcare related expenses. These funds are a tax-free health benefit to you from the sponsoring company to assist in paying the healthcare costs of you and your family. The funds can never revert back to the sponsoring company and they are held in your name until death. When you submit a claim it is adjudicated by our professional adjudication team and if approved we release funds from this account to reimburse you accordingly. What is Considered an Eligible Expense? A Health Spending Account provides you and your employees with a much wider range of coverage than traditional insurance plans. There is no maximum to what you can claim other than what you have available in your account as a balance. There are two main qualifiers for an expense to be considered eligible 1. A service must be performed by a licensed medical practitioner, 2. All items must be prescribed by a licensed medical practitioner and dispensed by a licensed medical practitioner or a pharmacist. An eligible medical expense is any payment made by you or one of your eligible dependents to a licensed medical practitioner qualified to practice under the provincial laws of the place where you live. 3
What Are Some Typical Expenses I Can Claim? Depending on your province of residence, many items are eligible for claims reimbursement provided they follow the rules outlined above. Some examples of items you can submit for claims reimbursement include: Prescription Medicines & Drugs Costs incurred for prescription medicines and drugs (i.e. over the counter drugs) qualify as medical expenses if purchased by you or one of your previously registered dependents provided it was as prescribed by a medical practitioner and dispensed by a licensed pharmacist. Note that you do not need a prescription for insulin, oxygen, liver extract injectibles or vitamin B12 (if for pernicious anemia). Vision Care Taking care of your eyes is important! That is why eyeglasses, if prescribed, are eligible medical expenses and can be reimbursed from your health spending account. You may submit the cost for both the frames and the lenses for yourself or one of your previously registered dependents. You may also submit claims for other devices used in the treatment or correction of vision including contact lenses and laser eye surgery. As always, in order for the items to be considered an eligible expense they must have been prescribed by and dispensed by a medical practitioner such as an optician, ophthalmologist or an optometrist. Dental Care A trip to the family dentist can be a scary event, especially for the little ones. Luckily, your health spending account has you covered. Payments made to a dentist, dental hygienist, dental surgeon or dental mechanic for services provided are considered eligible medical expenses for you and your previously registered dependents. The plan will cover most basic dental needs including check-ups, cleanings, and related preventative health services. However, the funds may also be used for more unique or specialized procedures not covered by many dental plans including dentures, crowns, bridges, oral surgery, dental X-rays, gum treatment, filling teeth, extracting teeth, and even teeth whitening treatments. Further, there are no limits to the number of procedures you incur in a year. If there is enough funds in your account, and the claim is eligible, you can be reimbursed. 4
Preventative Medicine & Services Whether you visit a specialist as part of a preventative health regiment or need services to help you overcome a health-related issue, your health spending account can help. An amount paid to a licensed medical practitioner for services as a preventative or elective nature is an eligible medical expense. They can include, depending on your province of residence, services performed or prescribed by any of the following: Audiologists Chiropodists Chiropractors Christian Science Practitioners Dentists Dental Hygienists Dental Technicians Denturists Dieticians Massage Therapists Midwives Naturopaths Neurologists Occupational Therapists Opticians Osteopaths Physiotherapists Podiatrists Podiatrists Psychiatrists Psychoanalysts Physician and Surgeons Psychologists Radiologists Registered Nurses Respiratory Therapists Speech Therapists It is important to note that all of the medical professionals noted above must be authorized to practice under the laws of the provincial or state where the service is rendered. If you are unsure, ask for proof of their license to perform medical services before engaging in them for their services. Travel & Transportation When you need to get somewhere for treatment and have to rely on third parties to get you there, these costs can be reimbursed from your health spending account. Travel and transportation related costs can include ambulance charges as well as commercial transportation services to and from a clinic, hospital or doctor s office for a patient and an attendant (if medically necessary to accompany the patient). For travel related to commercial transportation, the distance traveled must be in excess of 40 kms to obtain equivalent services as would be available in their home region. If the distance traveled is greater than 80 kms, the eligible costs may also include meals and accommodation for the patient and attendant. Special Needs & Elder Care Sometimes the need to care for a loved one full-time requires a specialist, unique schooling, or a specialized facility to meet their unique health-related needs. Your health spending account may be used to cover the expenses incurred for prescribed and medically supervised and performed services for elderly parents, schooling and therapy for those with learning disabilities or special needs, as well as related nursing and housing provided by a licensed medical facility or practitioner. 5
Insurance Premiums If you pay premiums for a private group health insurance plan for yourself and your family, you can claim these costs as an eligible expense from your health spending account. Simply submit a statement from the insurer of the premiums paid. However, please note that government-sponsored benefit programs are not eligible. What Items Are Not Covered? While your health spending account does cover many services and products, some items should be considered as ineligible under all circumstances. The following list of items are examples of products and services that are considered ineligible medical expenses from your health spending account. For a complete list, you should refer to Canada Revenue Agency s Web site: 1. Non-prescribed contraceptive devices and related equipment or devices 2. Wigs and other cosmetic devices unless required due to a disease, medical treatment or an accident 3. Funeral expenses for you or any of your dependents 4. Health or medical club memberships as well as fitness equipment or apparel 5. Expenses previously fully-reimbursed by another form of insurance be it private or public 6. Non-prescription sunglasses or related cosmetic eyewear not used to enhance vision based on a medical prescription 7. Fees paid to social workers and counsellors who are not members of OCCSW/OASW 8. Fees paid to a medical professional for services not generally offered by them. When Can I Submit a Claim? Once you have fully enrolled in the plan, you can begin to make claims. You may submit any eligible claim incurred AFTER your enrolment date if you are the primary claimant. For dependents, eligible claims may be submitted if the service occurred AFTER the date you added them to your plan. If you submit a claim for a consolidated cost over a period of time, a UTC Financial adjudicator will review the claim and adjust the reimbursement amount based on the start date of you or your dependent. For example, if you had paid an insurance premium each month throughout a given year but only enrolled into the health spending account plan mid-way through the year, the amount reimbursed to you would be reduced to reflect your start date accordingly. 6
What is Considered Acceptable Proof For a Claim? It is not that we don t believe you, we simply need to follow the rules. Whenever you submit a claim for reimbursement you need to be able to provide some information to our adjudicators to assess and accept or deny the claim. When submitting a claim, you must provide documentation to validate it. This can include: 1. A prescription from a licensed medical practitioner for the service or product, AND/OR 2. An Explanation of Benefit (EoB) or statement of services from a clinic, pharmacy, practitioner, or insurer, AND 3. Proof of Payment in the form of a receipt indicating the amount paid, the date of payment, and the method of payment. What Costs Are Associated With Submitting a Claim? There is a modest $1.99 CDN claims adjudication and processing fee paid for every claim submitted and adjudicated. This fee is paid from the funds in your HSA and is deducted off the total amount owed to you. What if My Claim Amount Exceeds My HSA Balance? If you submit a claim and the amount of the claim exceeds your balance, you have one of two options: The Partial Payment option allows you to receive reimbursement as funds become available. You will be charged the one-time claims adjudication fee and the balance of funds in your HSA will be used to pay a portion of the amount owed immediately. As new funds are deposited we will reimburse you for the remaining amounts owed. Each subsequent payment will be subject to our $1.99 processing and payment fee. The Hold for Payment option allows you to place the claim into a queue until your account balance is sufficient to pay the claim in full. You will be charged the one-time claims adjudication fee and the claim will be fully-reimbursed once you have sufficient funds in your account. However, we will only charge the $1.99 CDN claims adjudication fee once. 7
Where Do I Send My Claim? Submitting a Claim By Mail You can mail your signed and printed claim form with supporting receipts and documentation to the address located to the right. UTC Financial Claims PO Box 57008 Toronto, Ontario M8Y 1L0 Submitting a Claim By Fax You can fax your signed and printed claim form with supporting receipts and documentation to the following toll-free number: (866) 651-4007 Why Do I Need to Keep My Original Receipts? If you submit your claim by fax you are doing so with the understanding that we are adjudicating the claim based on copies, and not the original receipts you would have received. For audit purposes, and to prevent fraudulent activities, you may be asked to supply the originals at any time should you choose to send your claim via fax. Therefore, you should keep your original receipts and any related documentation originally sent to us to validate a claim in a secure and organized place at all times. This could be a file folder in your home office, a special box you use for your tax receipts, or another location where you will remember the location and have access to them at any time. We recommend that you keep these original documents in a safe and secure place for at least seven (7) years. How Will I Be Reimbursed for Approved Claims? When you enrolled, you provided us with your personal banking information. This is the account we deposit approved claims reimbursements into using electronic fund transfer or EFT. When you submit a claim, our team of adjudicators will look at the information provided and approve or deny it accordingly. If approved, the amount owed to you (less the adjudication fee) will be transferred directly into your personal bank account via EFT within 5 days of receipt. 8
What Fees and Charges Should I Be Aware Of? We have few fees here at UTC Financial and to be honest, we think that is a better way to run our business. Other than the 10% administration fee charged to each deposit, we do charge fees for two items you should be aware of. Claim Adjudication Fee There is a modest $1.99 CDN claims adjudication and processing fee paid for every claim submitted and adjudicated. This fee is paid from the funds in your HSA and is deducted off the total amount owed to you. Should you not have enough funds in your account and wish to receive partial payments for a claim submitted, you will be charged the one-time claims adjudication fee and the balance of funds in your HSA will be used to pay a portion of the amount owed immediately. As new funds are deposited we will reimburse you for the remaining amounts owed. Each subsequent payment will be subject to our $1.99 processing and payment fee. Unsuccessful Fund Transfer Fee Should you fail to update your banking information on file with us, provide inaccurate or false information, or close an account prior to submitting a claim or making a deposit, a charge of $24.99 CDN may be applied. If an attempt to withdraw or reimburse funds is unsuccessful, UTC Financial reserves the right to charge this fee for costs incurred from investigating, updating your account information, and re-submitting the transaction for transmission. This fee is paid from the funds in your HSA and is deducted off the total amount owed to you. To avoid this fee, always ensure you submit any banking changes in advance of a claim and have received confirmation from UTC Financial that information has been changed. What Happens In The Event That I Die? In the unfortunate scenario where you should die the remaining funds in your health spending account may be used by previously registered dependents on file prior to your death. You should also note that your relationship with the company will also cease and no new funds will be deposited into the account after your death. The remaining funds in your account will be reserved for your registered dependents and they may continue to submit claims until the balance in the health spending account is zero. 9