Best Way to Set Up a Health Spending Account for a One-Person Corporation in Canada

By Frontier Team•February 11, 2026•5 min read

The best way to set up a Health Spending Account for a one-person corporation in Canada is through a third-party HSA administrator. You cannot self-administer your own plan -- the CRA requires that an independent provider manage it for your HSA to qualify as a Private Health Services Plan (PHSP) and keep its tax-deductible status. The good news is that signing up with the right provider takes about 10 minutes and can save you thousands of dollars a year on healthcare.

Why You Need a Third-Party Administrator

This is the single most important thing to understand. The CRA says your HSA must be administered by an arm's-length third party -- someone who is not you, your spouse, or a related person. If you try to run it yourself, the CRA can deny your deductions entirely during an audit.

A third-party administrator handles the plan documentation, reviews claims against CRA rules, processes reimbursements, and takes care of annual reporting. This is what keeps your plan compliant and your deductions safe.

Watch Out for US HSA Advice

If you've been searching online for HSA information, you've probably come across providers like Fidelity, Lively, PeopleKeep, and Take Command Health. These are all American companies that manage US-style Health Savings Accounts. US HSAs work completely differently from Canadian ones -- they're tied to high-deductible health insurance plans, they have strict annual contribution limits set by the IRS, and they are not available to Canadians.

What you're looking for in Canada is a Health Spending Account (also called a PHSP), which is a completely separate concept. Canadian HSAs are employer-funded benefit plans that reimburse eligible medical expenses. There are no personal contributions, no investment accounts, and no connection to insurance plans.

If a provider asks you to open a savings account or link a high-deductible insurance plan, you're looking at a US product. Move on.

Canadian Providers Worth Considering

Here are the main Canadian HSA providers that work well for one-person corporations:

  • Frontier Health -- Built specifically for solo incorporated professionals. No setup fee, $120/year annual fee, 8% per claim, and 24-hour reimbursement. Sign up at app.frontierhsa.ca.
  • Olympia Benefits -- Established provider with tiered pricing. Higher annual fees, but well-known.
  • EasyHSA -- No annual fee, 10% per claim.
  • National HealthClaim -- One of the older providers in the space with traditional pricing.

For a one-person corporation, Frontier Health tends to be the simplest and most affordable option. There's no contract, no setup fee, and you only pay when you actually submit a claim.

The T4 Salary Requirement

Before you sign up with any provider, make sure you're paying yourself a T4 salary from your corporation. This is a non-negotiable requirement. An HSA is structured as an employee benefit, so you need to be a legitimate employee of your own corporation -- not just a shareholder taking dividends.

You don't need to pay yourself a large salary. Many solo incorporated professionals pay a modest T4 salary alongside dividends, and that's enough to qualify. If you're currently paying yourself only in dividends, talk to your accountant about adding a small salary component.

How to Set Up Your HSA in 10 Minutes

Here's the step-by-step process with Frontier Health:

  1. Sign up at app.frontierhsa.ca -- Enter your business name, incorporation details, and contact info.
  2. Choose your monthly budget -- Most solo incorporated professionals start with $50 to $150 per month. This sets your annual benefit limit. There's no penalty for setting it higher than you use, because you only pay when claims are submitted.
  3. Start submitting receipts -- Pay for a dental visit, pick up a prescription, or book a physio appointment. Take a photo of the receipt and submit it through the app.
  4. Get reimbursed within 24-48 hours -- Directly to your personal bank account by e-transfer.

That's it. No paperwork to mail, no waiting period, no pre-funding required.

What It Actually Costs

Here's a concrete example. Say you spend $3,000 on healthcare this year -- a couple of dental visits, new glasses, a few physio sessions, and some prescriptions.

With Frontier Health:

  • Annual admin fee: $120
  • Claims fee: $3,000 x 8% = $240
  • Total admin cost: $360
  • Total business deduction: $3,360 ($3,000 reimbursement + $360 admin)

What you save:

At a 40% marginal tax rate, paying $3,000 in health expenses from your personal income would require about $5,000 in pre-tax earnings. With the HSA, your corporation deducts the full $3,360 and you receive the $3,000 tax-free. You keep roughly $1,640 that would have gone to taxes.

The admin cost pays for itself many times over.

Get Started

If you run a one-person corporation in Canada and you're paying for dental, vision, prescriptions, or any other medical expenses out of pocket, you're leaving money on the table. Setting up an HSA takes 10 minutes, costs nothing upfront, and starts saving you money on the very first claim.

Sign up for Frontier Health and turn your health expenses into tax-free business deductions.

Simplify Your Business Health Benefits

Get Started