HSA & Benefits Glossary

A group benefits funding model where the employer self-insures and pays actual claims directly, with an insurer or third-party administrator handling only plan administration (reviewing claims, managing reimbursements, maintaining documentation). An HSA/PHSP is inherently an ASO model: the employer funds the plan, bears the cost of claims, and pays no pooled premiums to an insurer.

The dollar amount an employer assigns to each employee (or employee class) per plan year for their HSA or other benefit wallet. The employer sets the allocation freely — the CRA has no maximum. Different tiers of employees (e.g., full-time vs. part-time) may receive different allocations, provided the tiers are based on documented, non-discriminatory criteria.

A CRA concept describing a transaction or relationship between parties who are independent of each other and acting in their own self-interest. For HSA/PHSP purposes, the employer and employee must be dealing at arm's length. An owner who controls more than 50% of a corporation's voting shares is generally not arm's length with that corporation, which affects their ability to participate in the plan as both employer and employee.

A reimbursement request submitted by an employee through the benefits platform. A valid claim includes the type of eligible expense, date of service, amount paid out of pocket, and a supporting receipt. The third-party administrator reviews the claim against CRA Section 118.2 criteria before approving the reimbursement.

The provision of the Income Tax Act of Canada that defines eligible medical expenses for the purposes of the Medical Expense Tax Credit. This same list of eligible expenses also governs which costs can be reimbursed through an HSA/PHSP. Qualifying expenses include dental, vision, prescription drugs, paramedical services, mental health treatment, and many medical devices. Non-qualifying expenses (gym memberships, cosmetic procedures, etc.) cannot be reimbursed through an HSA.

For HSA reimbursement purposes, an eligible dependent includes the employee's spouse or common-law partner, and children under 18 years of age (or under 21 if enrolled full-time in post-secondary education). Other individuals may qualify as dependents if they meet CRA dependency criteria. Claims for eligible dependents count against the employee's own plan allocation.

Any expense listed under CRA Section 118.2 of the Income Tax Act that can be claimed as a medical expense. The same list governs what an HSA/PHSP can reimburse. Common categories include dental treatment, prescription eyeglasses, prescription medications, physiotherapy, chiropractic care, mental health services, hearing aids, and hospital room upgrades. The provider must generally be a licensed practitioner for services such as massage, acupuncture, or psychotherapy to qualify.

An insurer-branded term for an employer-funded benefit account that reimburses CRA-eligible medical expenses — the same product as a Health Spending Account (HSA) or Private Health Services Plan (PHSP). Insurers like Sun Life, Manulife, and Canada Life typically offer HCSAs as a component within a larger group insurance package. The underlying CRA rules are identical regardless of the label used.

A CRA-approved employer-funded Private Health Services Plan (PHSP) that reimburses employees for eligible medical expenses under CRA Section 118.2 on a tax-free basis. The employer sets an annual allocation, the employee submits receipts for qualifying expenses, and the administrator reimburses the employee — no premiums, no pooled risk, no insurer. Not a registered savings account: it is a reimbursement arrangement governed by CRA IT-339R2.

The CRA bulletin that defines the requirements for a valid Private Health Services Plan (PHSP). It sets out the arm's length rules, the requirement for a written plan document, and the eligibility criteria that allow PHSP reimbursements to be tax-free for employees and deductible for employers. IT-339R2 is the legal backbone of every Canadian HSA.

An employer-funded taxable benefit wallet for wellness, fitness, learning, and lifestyle expenses that do not qualify under CRA Section 118.2. Common eligible LSA expenses include gym memberships, fitness equipment, streaming subscriptions, personal development courses, and travel. Because LSA reimbursements are not governed by the PHSP rules, they are taxable employment income and reported on the T4. Many employers offer both an HSA (tax-free) and an LSA (taxable) to provide comprehensive coverage.

Professional health services provided by licensed practitioners outside of physicians and dentists, which are eligible for reimbursement under CRA Section 118.2 when the provider is licensed in the province where the service is rendered. Common paramedical services include physiotherapy, chiropractic care, registered massage therapy, naturopathic medicine, acupuncture, occupational therapy, and speech therapy. The specific licensing requirements vary by province.

A taxable employer-funded benefit wallet designed for personal wellness and ergonomic expenses that fall outside CRA medical eligibility. Typical PSA categories include home office equipment, ergonomic furniture, alternative therapies, and personal development tools. Like an LSA, PSA reimbursements are taxable income for the employee.

The written legal arrangement that establishes the PHSP. The CRA requires a formal plan document to exist for a PHSP to qualify for tax-free treatment. The document sets out the plan year, allocation tiers, eligible expense categories, rollover policy, and other plan terms. The third-party administrator (such as NuvioLife) typically generates and maintains the plan document on behalf of the employer.

The 12-month period during which employees can incur eligible expenses and submit claims against their allocation. A plan year commonly aligns with the calendar year (January 1 to December 31) or the employer's fiscal year. Claims for expenses incurred within the plan year must typically be submitted before the plan year ends or within a designated grace period. The employer may also offer a rollover of unused balances into the next plan year.

The official CRA term for what employers and employees commonly call a Health Spending Account (HSA). A PHSP is a contractual arrangement between an employer and a plan administrator under which the employer agrees to reimburse employees for eligible medical expenses on a tax-free basis. The legal framework is defined by CRA Interpretation Bulletin IT-339R2. All valid Canadian HSAs are PHSPs.

The core mechanic of an HSA/PHSP: the employee pays an eligible expense out of pocket, submits a receipt through the plan administrator's platform, and is repaid (reimbursed) the approved amount from their plan allocation. On NuvioLife, reimbursements are processed within 48 hours by EFT or Interac e-Transfer and are received tax-free by the employee.

A plan design feature where unused HSA allocation from one plan year carries forward into the following plan year rather than lapsing. Rollover is optional and must be specified in the plan document. Some employers allow a full rollover, others cap the amount that can roll over, and others apply a "use it or lose it" policy where all unused funds revert to the employer at year end.

The Canadian tax slip issued by employers each year reporting an employee's total employment income and statutory deductions. HSA/PHSP reimbursements are not employment income and are not reported on the T4. By contrast, Lifestyle Spending Account (LSA) and Personal Spending Account (PSA) reimbursements are taxable benefits and must appear on the T4.

A company that administers a benefit plan on behalf of the employer. For an HSA/PHSP, the TPA reviews claims against CRA eligibility criteria, processes reimbursements, maintains the required plan documentation, and provides the platform employees use to submit claims. NuvioLife is a TPA. Using a TPA ensures the plan meets CRA requirements and that the employer's obligation ends at setting the budget.