S. 6(1)(a)(i) excludes a taxable benefit from the employer’s funding of a private health services plan (PHSP) for its employees, including in the case of a health spending account (HSA) (under which an employer agrees to reimburse its employees’ hospital and medical expenses incurred during the year up to a pre-determined limit).
However, CRA considers that an HSA established for a single shareholder/employee (and family members) likely does not qualify as a PHSP. This is based on its view that “for a plan to be a PHSP … the plan must be a plan of insurance” and, here, “[e]ffectively, the sole employee-shareholder is paying for the personal hospital and medical expenses for themselves and their family members through their solely owned corporation without any risks being assumed by the corporation.”