WHAT YOU NEED TO KNOW
The Health Care Spending Account (HCSA) reimburses eligible medical and dental expenses not fully covered by your benefit plans. HCSA reimbursements are generally non-taxable. For Québec residents, employer-funded HCSA credits are a provincial taxable benefit.
Eligible Expenses
- Out-of-pocket expenses: Unpaid portions of health and dental costs, including coinsurance amounts and costs that exceed plan limits.
- Non-covered expenses: Eligible expenses not covered by any other benefit plan.
- Eligible medical expenses under tax law: Expenses recognized under the Income Tax Act and its regulations. Visit the Canada Revenue Agency website for a complete list of eligible expenses.
Whose Claims Are Eligible for Reimbursement?
You can use your HCSA for eligible expenses incurred by you and dependants who meet the Canada Revenue Agency (CRA) definition. A dependant must:
- Be related to you or your spouse or common-law partner; and
- Live in Canada.
This may include family members who are not covered under your health or dental plan.
Unused HCSA Credits
Unused credits in your HCSA are handled as follows:
- Carry-forward period: Any unused credits at the end of the benefits plan year are carried forward for one additional year.
- First 90 days of the new year: During the first 90 days of the new plan year, funds carried over can be used to reimburse eligible expenses incurred during the previous plan year that have not yet been submitted.
- Remainder of the carry-forward year: After the 90-day claims grace period, any remaining carried-over credits can only be used for eligible expenses incurred in the current year.
- Forfeiture: If carried-over credits are not used by the end of the year, they will be forfeited and cannot be reinstated.
If you are covered by a collective bargaining agreement, check your union contract, as eligibility and benefits might be different for each program.
