A PHSP is based on tax legislation and so the basic plan does not differ from one supplier to another.
However, as you are buying a long-term product (one that you will keep and use for years), a consumer’s focus should be on the business that is supporting it as well as the fees. Since this is a ‘tax product’, it is important that the PHSP supplier be able to back you up – both financially as well as with accounting and legal support.
Set up costs can vary from just $40 up to over $1,500, depending on the supplier and what guarantees they offer. Remember that this entire cost is ‘one time’ only ie. not every year. When compared to the thousands of dollars going through your plan over the ten to twenty years that you will use the plan, the tax deductible set up fee becomes insignificant with any of the suppliers.
We prefer a PHSP run by a Chartered Trust Company as they are regulated by the government under the Financial Institutions Act (like banks) and due to the financial and investment expertise that they are required to have as a trust company. Trust companies are also required to have a ‘reserve’ (cash float with governmental controls) of $2 million up to $10 million (depending on province), so they are financially dependable. We will be happy to give you our recommendations.
Usual set up fee is a one-time only cost of $335 for the base plan plus $40 for each employee put on the plan. HST must be added to this. This is only for the first year – there are no further set-up fees for any of the following years of the lifetime of the plan. The entire cost is tax deductible.
All plans with ‘arms-length’ employees do require ‘pre-funding’ for the employees. “Employee Health Care Plans” (‘arms-length’ employees) may offer an alternative monthly ‘per employee’ administration charge recovered from the fund instead of the usual ‘per claim’ fee structure. All fees chareged also cover the direct access to HO as well as personal on-line claims information, forms, etc. for the employees. It will also give ‘real time’ fund status of the total plan to the employer. The plan will still remain less expensive than a standard group insurance plan.
Options such as Exceptional Expense will ‘insure’ that the funding that the employer has put in the plan is not completely drained due to a severe medical incident suffered by an employee (eg. whelel chairs, ambulance, private duty nursing, etc.) by paying for these services firsts before going to your plan funding. Also available is Travel Insurance, usually on a preferred (ie. better) basis.