Add Flexibility to Your Benefits Plan with a Personal Spending Account

Jul 12 | 2017

Personal Spending Accounts (also known as Wellness Spending Accounts) are all the rage these days! These accounts are a great way to provide additional health and well-being options to employees above and beyond what is covered under their traditional benefits plan.

Employers typically design the Personal Spending Account (PSA) by allocating a set amount of money to each employee or defining a percentage of their salary that goes towards their spending account. The employer sets the rolling type and determines the frequency of allocation – monthly, quarterly, or annually.

The big bonus? PSAs are a taxable benefit for your employees.

I’ve heard a lot about Health Care Spending Accounts. How is a Personal Spending Account/Wellness Spending Account different?

The big difference between a Health Care Spending Account (HCSA) and a Personal Spending Account (PSA) is what is covered. HCSAs cover eligible health, dental, and medical claims as determined by the Canada Revenue Agency. Employers typically offer HCSAs as a way to provide coverage above their traditional benefits plan coverage.

On the other hand, PSAs cover a wide-range of health and well-being benefits. These can include but are not limited to, gym memberships, education fees, caregiver support programs, and childcare.

How Does a Personal Spending Account/Wellness Spending Account Work?

Similar to a Health Care Spending Account (HCSA), employees with a Personal Spending Account (PSA) submit their claims to their insurance provider. If the service is covered by the PSA, the employee will be reimbursed for their claim – simple as that!

Depending on the PSA provider you are working with, some will allow you to limit what can be covered under a PSA. If you want the PSA to only cover fitness-related fees, you can set those parameters in your plan design.

What does a Personal Spending Account/Wellness Spending Account cover?

The possibilities are endless for what a Personal Spending Account (PSA) can cover! Here are a few eligible expenses:

  • Personal Training, Consultation
  • Gym, Fitness Centre, Pool, Annual Memberships
  • Childcare
  • Eldercare
  • Educational and Personal Development
  • Hobby and General Interest Classes
  • Sports equipment, team registration fees, or lessons
  • Education Fees, Tuition, Books
  • Smoking Cessation Programs
  • Safety Equipment
  • Medical Tests
  • Non-Health Professional Services
  • Legal Services
  • …and much more!

Want to learn more about Personal Spending Accounts and what they can do for your business?

Contact us