Health Spending Accounts for Incorporated Business Owners
Reduce the after-tax cost of eligible health and dental expenses by paying through your corporation instead of personally.
What is a Health Spending Account?
A Health Spending Account (HSA) is a tax-efficient way for incorporated business owners to have their corporation reimburse eligible healthcare expenses that would otherwise be paid personally. Rather than paying with after-tax dollars, eligible medical expenses can generally be reimbursed through your corporation using an HSA.
Health Spending Accounts are commonly used by owner-only corporations, small businesses, and growing companies looking for a flexible alternative to traditional employee benefits.
Is an HSA right for my business?
✔ Incorporated Business Owners
Use your corporation to reimburse eligible healthcare expenses in a tax-efficient manner.
✔ Flexible Healthcare Benefits
A simple alternative for business owners looking beyond traditional group plans.
✔ Built to Grow
Start with yourself and extend the benefit to eligible employees whenever it makes sense.
HOW AN HSA WORKS
A simple example
Alex owns an incorporated contracting company.
During the year, he incurs $1,000 in eligible healthcare expenses such as prescription medications and routine dental care.
Instead of absorbing the cost personally with after-tax dollars, he submits the expense through his HSA.
His corporation reimburses the $1,000 allowing the corporation to deduct the expense while Alex receives the reimbursement tax-free.
Pay the expense
Alex pays $1,000 for health and dental expenses.
Submit the receipt
He submits the receipt through his Health Spending Account.
Receive reimbursement
His corporation reimburses the $1,000 through the HSA.
Tax-efficient outcome
Alex receives the reimbursement tax-free, while the corporation generally deducts the expense.
Common Eligible Expenses
Prescription Medication
Medical Devices and Supplies
Glasses and Vision care
Dental Care
Massage Therapy
Physiotherapy
Chiropractic Care
Psychology and Counselling
Gym Memberships*
Personal Training*
Fitness Equipment*
Group Fitness Classes*
*Some incorporated business owners also choose to add a Wellness Spending Account (WSA) for taxable wellness expenses.
“Why does this matter?”
One of the advantages of an HSA is that it can effectively move eligible health and dental expenses from your personal after-tax dollars to your corporation's pre-tax dollars. For many incorporated business owners, this can be a more tax-efficient way to pay for these expenses.
Running an incorporated business often means balancing cash flow, managing employees, investing in growth, and keeping expenses under control. Many business owners continue to pay eligible health and dental expenses personally, even though a Health Spending Account can provide a tax-efficient way for the corporation to reimburse those costs.
Ready to Explore an HSA?
Whether you're an incorporated business owner looking for a more tax-efficient way to pay for healthcare expenses, or exploring benefit options for your business, an HSA may be worth considering.
Questions about whether an HSA is right for your business?
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The information provided on this page is intended for general educational purposes only and should not be considered tax, legal, or accounting advice. Health Spending Accounts are subject to eligibility requirements, applicable legislation, and the terms of the specific plan. Individual circumstances vary. Please consult your accountant or tax advisor regarding your particular situation.