Health Spending Accounts
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Health and Welfare Trusts are used by businesses as employee benefit plans or as a supplement to employee benefit plans. HWT are also referred to as Health Spending Accounts. They are available to all types of business. It is a method to level the playing field with large businesses.
Large business is able to offer tax free benefits to employees and have the expenses tax deductible to the business. As well, large business is usually more able to negotiate different kinds of coverage, as well as different classifications, to meet the diverse needs of the large number of employees. With benefit packages that are normally available to small business, this was difficult, if not impossible to accomplish. The flexibility of the Health and Welfare Trusts addresses these very challenges.
Whether your business operates as a sole proprietorship, a partnership, or a corporation, all businesses qualify for the program. Canada Revenue Agency allows your business to set up a trust and flow tax free benefits thru this trust, for the employees/owners of that business. Now before you start thinking this is too complex, read on.
In its simplest form, The Benefit Guys can assist in setting up a Health and Welfare Trust for your business. The initial setup, one-time fee, to establish a HWT is only $200.00. The trust then becomes a relatively self administered program. There are pre-established forms and procedures that are approved and simple to use.
Businesses use health and welfare trusts for a number of different reasons. First of all, you control costs. You can establish different categories of employees, and establish what your business contribution will be annually. You can review it as often as you like. Secondly, employees can establish which benefits apply best to them. Some families will have higher dental needs, some need more prescription drugs and yet others need to spend money on eyeglasses. The HWT allows this kind of flexibility. Administration is a breeze.
Companies that have current employee benefit packages may want to add some benefits for their employees, and allow full flexibility as to what the employees spend the money on, with this additional benefit. It is next to impossible to negotiate that kind of flexibility with a normal employee benefit package, (group insurance), so companies will use a HWT as a supplement to an existing benefit package. If you are a family owned business, you definitely want to review the benefits of a HWT for your family members.
The Benefit Guys would like to explain how this type of program can work for you and your business, but it is very difficult to do that in a few brief paragraphs. If you click here, you will be taken to a much more detailed article on the subject. Also, you can watch the video below for more information.
If you want some more specific information from The Benefit Guys as to how a health and welfare trust program will work for your business, please complete the Client Data page with your questions, and we will get back to you by your chosen method of contact.