Have you heard of it?  

CBC's article highlighting PHSP

 It sounds like a hushed and secret plan. And it is, merely for the fact that not many people know of it. But it's time to unveil it. 

PHSP - Private Health Services Plan. From our Canadian Government, thank you!

Designed to help sole proprietors (meaning you, the contractor) and small businesses who don't have large extended medical plans, and therefore pay for alternative healthcare out-of-pocket. PHSP make it possible for small businesses to claim their healthcare costs, and the healthcare costs of their employees, 100% as an income tax credit. 

If you are a small business owner, you can see with the benefit of being able to claim healthcare expenses as business expenses.

At their heart, PHSPs provide a way for a business to pay for all the medical expenses of employees and their families — and that includes the business owner — on a tax-free basis.

In Vancouver, there are plenty of businesses that provide exemplary extended health care plans, but this city is also full of artisans, consultants, sole proprietors, local shops - and the employees of these establishments. A self-employed individual in an urban environment has to think carefully about cash flow and claimable expenses.

This bears repeating: With PHSPs, small business owners — including sole proprietors — can deduct all their eligible medical and dental expenses from their gross business income, instead of making them a personal expense.


Here's the easiest way to understand it:

You (as a business owner) agree to provide up to, let's say $600/year (upto a maximum of $1500) in medical/dental expenses for your employee/yourself.

You/your employee visits the naturopathic doctor (etc.), maybe purchases a prescription, pays and submits the invoice to your PHSP provider.

The PHSP writes a cheque to the claimant for the full amount paid as long as it falls within your annual limit.

The business owner gets 100% tax deduction of that amount. 

That's $600 that you couldn't claim before, that you can now. 


All this deductibility comes with a price. (A deductible price, but a price nonetheless). How much exactly? That's the tricky part.  It comes to some amount of $$ per year. That's how precise it gets. Think of it like a group insurance, but for the small shops who usually aren't eligible/able to provide the insurance that big business can. This also means the cost variability is the same: It's tough to know the costs/year from different PHSP providers.

 Most do it via a percentage of what's claimed, (which means no fees if you don't use it) but that percentage isn't advertised. Here are a couple  of examples:

 Brock Health - claims to be the lowest cost PHSP provider

Olympia Benefits - claims to be Canada's #1 PHSP provider 

 Tax tips - gives you more of the official information about getting started

Manulife has a comprehensive document about this - which I honestly didn't read. Let me know if it's worth it.  

You know what is awesome? In British Columbia and Ontario, Naturopathic Doctors are considered a valid medical service provider under PHSP rules.

Pair this system with the Change Natural Medicine Membership Model, and we've got a combination of private and socialized medicine at it's finest, so far.

 Canada. I think I love you. In fact, there is no doubt.