Health and Dental for Incorporated Consultants in Canada

Quick answer

An incorporated consultant outside Quebec has three options. An HSA through the corporation reimburses dental, vision, paramedical and prescriptions, best when spending is modest and predictable. Individual insurance covers large drug or out-of-country costs, with premiums whether or not you claim. Many pair the two. The HSA's main limit: a sole shareholder who is the only employee needs accountant review.

This guide is published by Frontier HSA. We checked the linked provider pages on November 9, 2026. Amounts are Canadian dollars before applicable taxes unless stated otherwise.

What changes when you leave an employer plan

The day your contract starts, the group dental and drug plan ends. From then on, a filling, a pair of glasses or a physio visit comes out of money you already paid tax on. The medical expense tax credit gives some of that back, but only on expenses above a threshold, and only as a non-refundable credit you need tax payable to use. For a family with a few thousand dollars of routine expenses, it returns little.

Your corporation can change that. A Health Spending Account in Canada is a Private Health Services Plan: the corporation pays eligible medical expenses for its employees, deducts the cost, and the employee receives the money tax-free. It is not the American savings account of the same name.

Option 1: an HSA through your corporation

The corporation sets an annual limit for you as its employee. You pay for an eligible expense, submit the receipt, and the corporation reimburses you through the plan. The corporation deducts the claim and the administration fee. You receive the full amount tax-free. Expenses on the CRA's eligible medical expense list qualify, subject to the plan's rules and provincial practitioner recognition: dental, vision, prescriptions, physiotherapy, orthodontics, fertility treatment and more.

There are no premiums, no medical underwriting and no exclusions for pre-existing conditions. With a pay-per-claim provider, a quiet year costs the corporation nothing. Your spouse or common-law partner and your children are covered as dependants under most plan terms; our guide for incorporated professionals covers who qualifies.

The limit is the thing to understand. An HSA reimburses up to the annual amount the corporation set and no further. It does not insure anything. If a $30,000 specialty drug year arrives, the HSA covers it up to the limit and the rest is yours.

Option 2: individual health and dental insurance

Individual insurance does what the HSA cannot: it takes on risk. A policy can cover specialty drugs, out-of-country emergencies and, in many cases, dental with waiting periods and annual caps. You pay premiums every month whether or not you claim. Medical underwriting is often part of the application, and the policy wording says whether conditions you already have are excluded or rated.

We have not verified any insurer's rates, so this post quotes none. Get two quotes against the coverage you would actually use, and read the drug formulary, dental caps and exclusions before comparing price. One useful detail: premiums paid to a policy that meets the CRA's private health services plan tests are themselves an eligible medical expense, so a corporation with an HSA can often reimburse them.

Option 3: both

Many consultants with a family end up here. Insurance covers the tail risk: the drug that costs more than a car, the hospital stay abroad. The HSA covers everything else: deductibles, co-pays, dental, glasses, physio, counselling. The insurance premium is predictable, the HSA spend is whatever the family actually used, and nothing is paid twice. Our comparison of HSA versus insurance works through how the two fit together.

The eligibility question nobody wants to hear

An HSA is an employee benefit, so the corporation needs an employee. A shareholder-employee qualifies when they actively work in the business and receive the benefit because of that work, not because they own shares. T4 salary or bonus is Frontier's preferred evidence. If you pay yourself only dividends, you will need other documentation of your role and your accountant's confirmation before enrolling.

Then there is the harder point. At the May 3, 2022 CALU roundtable (technical interpretation 2022-0928901C6), the CRA said a self-insured HSA for a sole shareholder-employee and their family would likely fail the insurance requirement a Private Health Services Plan must meet. Its reasons: the family would likely be reimbursed for the full annual amount, and the owner's corporation could change or end the plan at any time without notice. An annual cap alone does not fix this. Our accountant guide sets out the CRA's reasoning and the questions to work through with your accountant.

Frontier reviews owner-only plans before they start. That review does not make a plan compliant; the facts of your employment do. If you are the only employee and the sole shareholder, have the conversation with your accountant before you set anything up, and check your eligibility first.

A worked year for a one-person corporation

Here is an illustrative year. A consultant with a spouse, incorporated in Alberta, where GST applies to the administration fee only. Over the year the family has $3,000 of approved claims: a crown, two pairs of glasses and some physio.

• Claims reimbursed: $3,000, received tax-free
• Frontier fee, 8% of approved claims: $240
• GST on the fee: $12
• Corporation pays: $3,252, all deductible to the corporation

In a quiet year, the corporation pays $0. The same $3,000 paid personally would come from income already taxed at your marginal rate.

How do the published administration fees compare on $3,000 of claims? These are before tax, checked November 9, 2026, and exclude the claims themselves.

• Frontier HSA: 8%, no setup, annual or per-member fee. $240.
• Coastal HSA: 7% plus a one-time $50 setup fee. $260 in year one, $210 a year after that.
• Olympia Basic: $249 a year flat, no claim fee, with a published $15,000 annual claim limit. $249 whether you claim $500 or $10,000.
• Wellbytes Pay-As-You-Use: 10%, no setup fee. $300.
• EasyHSA: 10%, no setup or annual fee. $300.

Said plainly: at $3,000 of claims Frontier is the cheapest of these by $9 to $60. Above $3,112.50 of claims a year, Olympia Basic's flat fee is cheaper than Frontier's 8%. Above $5,000 in year one, and at any claim volume after the setup year, Coastal's 7% is cheaper than Frontier. A consultant with a steady $6,000 of family claims should look hard at both. Frontier's case is the quiet year and the uncertain one: nothing upfront, nothing annual, and $0 if nobody claims. The true cost of an HSA works through a full year including provincial taxes.

Setting the limit

The CRA publishes no dollar cap for a Private Health Services Plan. The limit must be reasonable for the role and the pay, which is a judgement your accountant should make with you. Our incorporated professionals guide notes that most professionals set between $2,000 and $10,000 a year. Start near what your family actually spends. With Frontier, increases apply right away, and once the plan year has started decreases take effect at the next plan year, so there is no cost to starting modestly.

What a claim looks like

You pay the dentist, photograph the receipt and submit it in your account. We review it against the CRA's eligible expense rules. After approval, Frontier invoices the corporation for the claim, the fee and taxes. With automatic bank payments turned on, you are paid as soon as the debit starts. With manual invoices, you are paid once the corporation pays the invoice. For a one-person corporation we recommend automatic payments, since you are both the claimant and accounts payable. We do not promise a number of days. The how it works page shows each step.

Where another option fits better

• Heavy, predictable drug costs. Insurance for that line can cost less than reimbursing it in full every year, and the HSA stops at its limit.
• You want life or disability cover. An HSA reimburses expenses; it does not insure your income or your family. That is an insurance purchase.
• You are a sole proprietor, or your corporation is in Quebec. Frontier does not serve either. Quebec treats HSA reimbursements as a taxable benefit provincially, and sole proprietors face their own limits under the CRA rules. Other providers have their own eligibility pages.
• You want one flat annual fee and expect more than about $3,100 in claims. Olympia Basic's published offer is cheaper than Frontier's 8% at that volume, within its plan limit.

What we recommend

For an incorporated consultant outside Quebec whose health and dental spending is modest and predictable, we recommend an HSA through the corporation, with individual insurance added if large drug or out-of-country costs would hurt. Confirm your shareholder-employee status with your accountant first, especially if you are the only employee. Frontier charges 8% of approved claims and nothing else; on $3,000 of claims that is $240, and in a quiet year $0. Look elsewhere in two cases: steady claims above about $3,100 a year on fee alone, where Olympia Basic's flat fee costs less, and a family that needs protection against large costs, where insurance belongs in the picture.

FAQ

Can I have an HSA if I am the only employee of my corporation?

Possibly, but have your accountant review it first. The CRA has said a self-insured HSA for a sole shareholder-employee and family would likely fail the insurance requirement, because the family would likely claim the full amount and the owner could change the plan at will. Frontier reviews owner-only plans before they start.

Can I pay myself dividends and still use an HSA?

Dividends alone do not establish employment. You must actively work in the corporation and receive the HSA because of that work, not because you own shares. T4 salary or bonus is Frontier's preferred evidence. A dividend-only shareholder-employee needs other documentation and confirmation from the corporate accountant before enrolling.

Is an HSA or individual insurance cheaper for a consultant?

For modest, predictable expenses, an HSA usually costs less, because you pay only approved claims plus a fee and nothing in a quiet year. Insurance charges premiums whether or not you claim, in exchange for covering large or unexpected costs. Price both against what you actually spent in the last two years.

Can my HSA reimburse my individual insurance premiums?

Premiums paid to a plan that meets the CRA's private health services plan rules are an eligible medical expense. The trip cancellation or baggage portion of a travel policy does not qualify. Ask the insurer which part of the premium relates to medical coverage, then submit the receipt like any other claim.

Are my spouse and kids covered?

Yes, under most plan terms. CRA rules let a private health services plan cover the employee, their spouse or common-law partner, and their children. With Frontier, dependants claim against the employee's annual limit rather than a separate one, so set the limit with the whole family's expenses in mind.

What limit should I set as a one-person corporation?

The CRA publishes no dollar cap; the limit must be reasonable for your role and pay. Our incorporated professionals guide notes that most professionals set between $2,000 and $10,000 a year. Start near what your family actually spends, since increases apply right away with Frontier, and ask your accountant to confirm.

Related reading

• HSA for incorporated professionals in Canada
• HSA vs insurance in Canada
• Best HSA providers in Canada