Why are business owners so interested in owning their own Private Health Service Plans?

Nov. 18, 2010 - PRLog -- The health insurance industry is changing and the direction it is going is not one that supports people with affordable health care.Today insurance companies are putting more and more limitations on what they cover for people as well as adding clauses like no coverage for pre-existing conditions.

I asked Trudy Ames of Collaborative Business Solutions, why this is.  She commented, "What insurance companies are saying to you is, buy when you can still get coverage. If you wait till you have a health issue, anything you need will not be covered. It's similar to Life Insurance only your not getting a better rate by buying young. While it is true that taking care of your health proactively is wise, the money you will pay in premiums over the years is huge and does nothing for your health. In fact the constant outlay of cash often causes stress on people and as we all know, that has a negative impact on health."

Trudy says business owners do have other options.

She explained to me that under the income tax act, a business owner can set up a Private Health Service Plan where they self direct and self administer their own plan. This means, they own their own health benefit plan. The limits are set according to what the company needs and they get to choose what streams of health care they want to access as long as it is considered health care in Canada.  The business owner administers their own plan and then they get to deduct 100% of their medical costs from their business income.  No premiums to pay to outside insurance companies, no percentage of expenses taken by a middle man. They simply pay for their health care and reimburse themselves through their company. Corporations and Proprietorships or Partnerships are different and have different requirements but when set up correctly, they meet the requirements of the Income Tax Act and are quiet simple for the owners to manage.

I asked Trudy about what is covered under one of these Private Health Service Plans  and she started by telling me it is not like an Insurance companies where they put limits on what you can claim, which saves them money not you. When you own your own plan, you can choose what health benefits work best for you and your families health.  I then asked what practitioners I can see. She tells me that is determined by the provinces and it covers all the standard medical care in Canada. Collaborative Business Solutions keeps an eye on these changing topics with the Income Tax Act and the provincial health services and posts the changes for their clients to keep up to date. Many of these resources are on their site for anyone to reference.

My question to Trudy after learning all this was,  Is it really that simple?  Trudy comments, "Almost"  "There are some differences between proprietorships and corporations, and of course, Revenue Canada has all kinds of requirements and criteria that have to be met. These plans do have to be set up properly. There are a number of reference documents on my site that I am happy to share with you. Come and have a look." Her advise to all of us,  "Take the time to consider the option that gives you the most freedom and flexibility with your health and reduces what you send to the tax man."
http://privatehealthserviceplan.com/phsp/

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Collaborative Business Solutions brings together Tax Strategies, Health Care, Labour Relations and Business Management with over 20 years experience. Saving you more Money through Paying Less taxes and creating Freedom with your Health Care choices.