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Cost Plus Policy – Template

Many plan sponsors use Cost-Plus as an effective tool for benefit plans. It is important to ensure a Cost-Plus policy is on-file. This policy would outline who in the company is eligible for Cost-Plus on a class basis, to avoid discrimination, and also ensure that these expenses are reasonable.

Below is a plain-text version of a sample suggested Cost-Plus Agreement. At minimum, if your company uses Cost-Plus, this should be modified to fit your company, printed off, and saved in your accounting files. Please note that this suggested template has not been reviewed or approved by the CRA, but rather, Beneplan Inc’s opinion regarding the proper handling of such items.

Beneplan Inc. Cost-Plus Agreement

Effective <DATE> between
Plan Sponsor


Claims Adjudicator
Beneplan Inc http://beneplan.ca (herein referred to as “Beneplan” or “Beneplan Inc”)
500-150 Ferrand Drive
Toronto ON M3C 3E5

This agreement hereby appoints Beneplan Inc as the claims adjudicator for the Plan Sponsor’s Cost-Plus arrangement.

Benefits and Class Structure

CLA – Executives

Executives are eligible for $5,000 per individual in the family, per calendar year.
The benefit cannot be rolled over into the following calendar year. Claims must be made within twelve (12) months of the date of service.

Eligible plan members are the Owners of the plan sponsor who are actively at work.

CLB – Management

Management employees are eligible for $500 per calendar year in Cost-Plus claims. The benefit cannot be rolled over into the following calendar year. Claims must be made within twelve (12) months of the date of service.

Eligible plan members are active, full-time, non-seasonal management employees of the plan sponsor who are actively at work.

CLC – Regular Employees

Regular Employees are not eligible for cost-plus claims.

Claims Adjudication

All expenses submitted to Beneplan Inc must be medically necessary and an eligible medical expense according to Canada Revenue Agency guidelines.
Please see http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/llwbl-eng.html for a full list of items.

Here is a summary of what can be claimed:
• Prescription drugs
• Paramedical services
• Nursing services
• Dental care
• Medical equipment
• Home care products
• Physician services
• In vitro fertility programs
• Vision care expenses
• Medical services provided outside of Canada by licensed physicians or hospitals
• Travel expenses incurred to obtain medical services
Please also consult the list of which expenses are not considered eligible: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/ntllwbl-eng.html. They largely consist of cosmetic procedures which are not medically necessary.

Any non-eligible expenses submitted to Beneplan Inc will not be reimbursed. Original receipts will not be returned.

Please note that all health and dental practitioners must be licensed within their Province’s jurisdiction and regulatory requirements. For example, a claim may be made for time spent with a licensed and registered Psychologist, licensed with the College of Psychologists of Ontario. However, a claim for time with a therapist without this license or registration would not be considered eligible because of CRA guidelines.
How to Make a Claim

Here are the steps on how to make a cost-plus claim with Beneplan:
1. Pay for the expenses out-of-pocket.
2. Photocopy and file all receipts and invoices.
3. Fill out the Beneplan Cost-Plus Claim Form, attach original receipts, and mail it to Beneplan Inc at 500-150 Ferrand Drive, Toronto ON M3C 3E5.
4. Beneplan will reimburse the member for the cost of the expenses, and add an amount owing on the next scheduled billing as a special item.
5. The Plan Sponsor must pay the next billing and include a separate cheque to the order of ‘Beneplan Inc’ for the amount on the billing.

Fees and Taxes

The CRA requires that cost-plus claims are subject to taxes. Here is a breakdown of all fees and taxes which each claim attracts:
1. 3% Beneplan Inc administration fee charged on the claim.
2. 2% Premium Tax charged on the claim.
3. 8% Ontario Retail Sales Tax for Insurance Premiums charged on the amount of the claim plus the above 5% fees and taxes.
Total fees and taxes are 13% of the claim.

Tax Deductibility

All cost-plus expenses are deductible by the Plan Sponsor as a business expense, providing that it meets the following criteria:
1. All employees of the Plan Sponsor are eligible to partake in the program;
2. Expenses are deemed eligible by the CRA; and,
3. Associated fees and taxes are paid.

Premium Payment

Premiums are due upon the Plan Sponsor’s receipt of the billing. The date which Beneplan Inc produces and emails the billing to the billing contact on file will be deemed to be the date that the Plan Sponsor is in receipt of the billing. Late premiums for cost-plus services will be subject to a 2% late penalty. Premiums which are over 45 days late will lead to the Plan Sponsor’s account being suspended. Suspended accounts are not eligible for claims payment until any outstanding premiums have been collected. Premiums over 60 days late may mean a permanent suspension of claims payment with all carriers who underwrite claims or risk for the Plan Sponsor as arranged and administered by Beneplan Inc. Suspended accounts or suspended claims will be reinstated within 5 business days of any late premiums being received for outstanding claims or services.

Governing Laws

Notwithstanding the above, this agreement defers to the governing laws of the Province of Ontario and the Nation of Canada.

Signed Without Prejudice

Full Name, Title, and Signature of the Agent of the Plan Sponsor

Full Name, Title, and Signature of the Agent of Beneplan Inc.