Reference guide
Arm's Length
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.
← HSA & Benefits Glossary
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