Funding Platforms

In today’s competitive environment it is essential to have a custom tailored benefit plan to attract and maintain your valued employees. After all they are your driving force and are instrumental in the success and growth of your company. Let us help you design a plan using one or more of the following funding platforms. This will insure that you and your employees get the best value for your premium dollars.

Fully Insured Plan: A group benefit plan in which the insurer pays all claims and assumes all risks in exchange for premium payment.

Administrative Services Only (ASO): An arrangement in which a plan sponsor contracts with a third party, such as an insurer, to provide services such as claims adjudication and processing.
The purpose of an Administrative Services Only (ASO) plan is to reduce the high administration costs charged by an insurance company.
Under this arrangement, an employer provides benefits to plan members on a self-insured basis. No premium is paid to the insurer for ASO benefits. The employer only pays for the actual claims incurred by plan members, plus an administration fee.
The ASO arrangement is best suited for benefits such as Extended Health Care and Dental, since claims for these benefits are somewhat predictable, short-term, and generally not catastrophic.
Refund Accounting: In its simplest form, refund or retention accounting means the annual determination of the past year’s surplus or loss. Funds are then either owed by the policyholder to the insurer, or to the policyholder by the insurer. The plan is credited with premiums and interest and charged with claims and expenses.

Cost Plus: is a tax-effective way for an employer to pay for an individual’s claims that are not covered under the group benefit plan. This program is usually provided for incorporated business owners and other executives.
Unlike the traditional fully insured group benefit plan, Cost Plus is a self-insured program, paid with corporate dollars on a claim-by-claim basis.
Cost Plus covers medical and dental expenses that qualify under the Income Tax Act.

Advantages of Cost Plus

  • Benefits paid to an individual are non-taxable
  • 100% tax deductible business expense
  • No monthly premium payments required
  • Covers a more extensive range of services and expenses than a group benefit plan
  • Broader definition of an eligible dependent

Health Spending Accounts: A Health Spending Account (HCSA) provides reimbursement for medical and dental expenses that qualify under the Income Tax Act, and that are not covered elsewhere.

While a Cost Plus program is usually only set up for business owners or key executives, a Health Care Spending Account can deliver benefits in a tax-effective manner for all employees.
In order to be a tax-effective program, an HCSA must comply with regulations set out by the Canada Revenue Agency, and it must be fully funded by employer contributions.
An HCSA works essentially like a bank account. A credit amount is allocated to each employee. The employees use the credited amount to cover an extensive range of medical and dental costs incurred for themselves or their dependents.

Advantages of a Health Spending Account

Employees Employers
  • Credit amounts are non-taxable (except in Quebec).
  • Covers a broad scope of health and dental services not reimbursable under group plan.
  • Gives the employee more control to spend their credits on what they need.
  • Offers an expanded definition of dependent.
  • Employer paid credits are tax deductible.
  • Effective cost containment strategy since benefit spending is limited to a defined contribution amount.
  • Can be coordinated with the group plan, or offered on a stand alone basis.

Find out what’s best for your company!