Principal Issues: Does the CRA have an update regarding its position on what qualifies as a private health services plan?
Position: Yes
Reasons: See response
2015 Canadian Tax Foundation Conference
CRA Roundtable
Private Health Services Plan
Question 5
Does the CRA have an update regarding its position on what qualifies as a private health services plan (PHSP)?
CRA Response
After a detailed internal review and consultation with Finance Canada and external stakeholders, the CRA has revised its position on what qualifies as a PHSP. Our previous position was that all medical expenses covered under a plan had to be eligible for the medical expense tax credit (METC) for the plan to qualify as a PHSP. That is, it was an all or nothing test. Effective January 1, 2015, a plan is considered a PHSP as long as the premiums paid under the plan relate “all or substantially all” to medical expenses that would otherwise qualify for METC (assuming all other conditions to be a PHSP are met).
Our revised position will be posted on the CRA website shortly.
Phyllis Waugh
2015-061075
November 24, 2015