List of HSA Eligible Expenses

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HSAs, or Health Spending Accounts, are an increasingly common component of employee benefits plans.

In Canada, HSAs allow employers the set aside a fixed dollar amount for employees to spend on healthcare needs. Those expenses are tax exempt, meaning employees don’t pay tax, and employers can write them off as a 100% business expense.

But not all healthcare expenses count. HSAs in Canada are regulated by the CRA’s Income Tax Act, an important (and lengthy) document detailing medical expenses and the conditions required to claim them.

What else is covered?

In addition to the items above, Health Spending Accounts can also cover the portion of expenses not covered by a pre-existing health or dental benefits plan. This includes

  • deductibles
  • coinsurance
  • amounts that are over your maximums
  • expenses not covered under your spouse’s plan.

What is not covered by an HSA?

One way to think about HSA coverage is that it includes everyday medical and health care needs beyond what provincial health plans will provide; however, HSAs do not cover critical care, lifestyle, or cosmetic expenses.

Some items not covered by an HSA are

  • cosmetic procedures
  • gym memberships
  • disability benefits
  • life insurance
  • vitamins
  • weight loss programs or smoking cessation programs

What to do now

If you already offer an HSA as part of your business’ benefits package, you can save this list and use it as a quick reference for you and your employees.

Not sure if an HSA or other employee spending account is right for your organization? Check out our comparison of HSA vs. FSA vs. WSA plans.

These lists are not exhaustive, and are subject to any changes made to the Income Tax Act in Canada. For complete information on eligible HSA expenses, consult the CRA, your benefits broker, or your insurance provider.

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