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Cost Plus: Use Tax-Free Money to Pay For Unexpected Medical Expenses

With costs for health expenses continually rising year after, pressures rest on employers (especially small business owners) to offer quality coverage to their teams in a cost effective manner. Health insurance companies have come up with unique products to help employers on this front. One of the most notable products is the Cost Plus Plan.

What is a Cost Plus Plan?

The Cost Plus Plan is a form of coverage that enables employers to use tax-free funds to pay for eligible medical, hospital, dental and vision expenses that are limited or not covered under your existing group plan. The Cost Plus Plan is a pay-as-you-incur plan with no monthly premium and does not affect your existing plan’s premiums or renewals.

Who is it for?

This product was originally conceived for small to medium business owners looking to pay for their personal and dependents’ medical expenses using tax free funds. However it has since expanded to larger enterprises looking to offer enhanced coverage for their C-suite and executives in a way that is more tax-efficient than salary increases.

What expenses are eligible?

Only approved medical expenses under the Canadian Income Tax Act are eligible for this plan, see the list here

How does it work?

A Cost Plus arrangement can be set up with an insurer on a fee per claim basis. Insurers generally charge an administrative fee that is a % of the amount claimed. To get signed up, you can complete the Cost Plus Agreement and start by submitting your first Cost Plus claim here.

Alternatively, you can learn more about this plan by speaking with your Beneplan advisor.