HSA Glossary
Clear definitions for Canadian Health Spending Account terms. No jargon, no confusion.
Health Benefit Terms
HSAHealth Spending Account
A benefit plan that lets your corporation reimburse you for medical expenses. All reimbursements are tax-free for you and tax-deductible for your business.
HCSAHealth Care Spending Account
Another name for an HSA. Some providers use this term, but HSA and HCSA mean the same thing in Canada.
Tax Terms
METCMedical Expense Tax Credit
A personal tax credit you can claim for medical expenses that exceed a threshold (3% of income or ~$2,759). Unlike an HSA, you only get a partial credit, not full reimbursement.
CRACanada Revenue Agency
The government agency that sets the rules for what medical expenses qualify for tax benefits. They determine which expenses can be reimbursed through an HSA.
T4Statement of Remuneration Paid
A tax slip reporting employment income, including salary or bonus. For a shareholder-employee, T4 income is Frontier's preferred evidence of an employer-employee relationship, but it is not the only possible evidence.
Dividends
Payments made to a shareholder as a return on share ownership. Dividends do not establish an employment relationship, but receiving only dividends does not automatically make an active shareholder-employee ineligible. Frontier requires other supporting documentation and confirmation from the corporation's accountant.
Business Terms
Eligible expenseCRA Eligible Medical Expense
Any medical expense that the CRA allows to be claimed through an HSA or for the Medical Expense Tax Credit. Includes dental, vision, prescriptions, physiotherapy, mental health services, and many more.
Still have questions?
We're here to help you understand how Health Spending Accounts work and whether they're right for your business.