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PHSP Covers What Our Heath Care System Does Not

In Canada our provincial healthcare care system is designed to cover a broad range of drugs and medical procedures. That said, there are many drugs and medical procedures not covered by the standard formulary. In the future, healthcare and drug coverage may become more restrictive in order to manage the costs of the health care system.

Special situations can arise where it may be necessary to use a private or out-of-province medical facility in the case of a specialized procedure, treatment, or confined timeline for diagnosis or treatment. There can be situations where it makes sense to use a drug that may not be covered within the Saskatchewan drug formulary.

The PHSP has no restrictions on use so you can expense any medical benefits as provided for under CRA’s qualified medical expense guide.t

Different than a Health Insurance or Dental Plan

Health insurance often pools the costs related to health and dental benefits amongst the businesses enrolled with an insurer. The benefits are clearly defined in a policy document and the business pays a monthly insurance premium even if there has been no usage. The more comprehensive the benefit offering is within the insured program, the higher the monthly premiums. Imbedded in the premium costs are administrative fees, underwriting fees, sales fees and a target profit factor for the insurance company.

There are limitations to the benefits within these insured plans and there may be caps on the usage of benefits to keep insurance premiums affordable.

Examples include:

  • Orthodontic expenses may not be covered
  • Dental expenses may only cover basic work or may have an annual dollar limit or cap.
  • Chiropractor costs may be limited to a certain number of appointments or may only cover a percentage of the treatment
  • Non-generic drugs may not be covered

The other limitation of insured health benefits is that they typically end once you retire or are no longer made available to those over age 65 (although some plans provide limited coverage to age 75).

Comprehensive Lifetime Coverage

Private Health Services Plan (PHSP) on the other hand can be completely comprehensive and pay for all CRA eligible medical expenses. There are no insurance premiums to be paid. You pay for only what you use. These plans only charge an administrative fee when an expense is submitted.

The PHSP is not age dependent so can remain in place as a long as you still have a company. For many that have retired or will retire, it means that they will be able to have a lifetime of health benefits paid for in a very tax efficient way from money that they have accumulated within their company.

Private Health Services Plan - An Enhancement to Traditional Group Health Plans

PHSP’s can be used in combination with the Provincial Health Plan or with a Group Insurance Plan to provide additional benefits that pick up where the other plan coverage stops. One strategy has been to use the Provincial Healthcare system or an Insured Group Plan to insure for those benefits that are catastrophic in nature (life and disability coverage) while looking to the PHSP to pay for reimbursement coverage such as health care, drugs and dental.


The PHSP can be a valuable for:

  • Business Owners
  • Professional Corporations
  • Farm Corporations
  • For Retirees that continue to have ownership in a company
  • For Active Companies interested in attracting and retaining key people

The PHSP has a relatively broad application however this structure needs to be skillfully deployed and the decision to do so should only be made once the relevant facts of your personal and business situation have been reviewed.

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