Health Spending Accounts

Hundreds of thousands of Canadians already use Health Spending Accounts. They’re quickly becoming the preferred way to offer health benefits in Canada.

HSA Health Wallet

HSA Plan Structure .
Guidelines and Rules.

A Health Spending Account (HSA) is a CRA-recognized Private Health Services Plan (PHSP) that provides a flexible, tax-efficient way for employers to offer health benefits. Below is an overview of the key rules and structural requirements that govern Health Spending Accounts in Canada.

1. T4 Income

Employees must receive T4 employment income. As a best practice, annual HSA allocations should not exceed approximately 20% of an employee's T4 income, up to a maximum of $25,000 per year.

2. Business Structure

Available to incorporated businesses with active income and nonprofits. Sole proprietors also qualify if they have at least one full-time arm’s-length employee.

3. Health Expenses

All expenses on the Coastal HSA Eligible Health Expenses List qualify for reimbursement.

Eligible Health Expenses List

4. Claim Date Eligibility

Coverage begins on your plan start date. Only expenses incurred on or after that date are eligible. Under CRA rules, plan start dates cannot be backdated.

5. Allocation

HSA credits are distributed either quarterly (January 1, April 1, July 1, and October 1) or annually (January 1), as determined by the Plan Administrator.

6. Fairness

Employees should be grouped into classes based on role and responsibilities, and all employees within the same class should receive the same HSA allocation.

7. Claim Deadline

Expenses must be submitted no later than March 31 of the following year and will be reimbursed only from credits allocated in that plan year.

8. Rollover

By default, unused HSA credits roll over on January 1 and remain available for 12 months. After that period, any remaining unused credits expire at no cost. This rollover feature is optional and can be disabled upon request.

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140+ Eligible Health Expenses.

100+ Eligible HSA Expenses

* Items with an asterisk require a prescription or written confirmation from a licensed medical practitioner to qualify. A licensed or registered medical practitioner must be recognized in the employee’s province and acting within their authorized scope of practice for the expense to qualify.

* Authorized Medical Practitioners
  • Exams
  • Cleanings & Polishing
  • Oral Hygiene
  • X-rays
  • Gum Treatments
  • Repair
  • Root canals
  • Fillings
  • Tooth extractions
  • Denture repair and replacement
  • Orthodontic work, including braces paid to a medical practitioner or a dentist. Expenses for solely cosmetic procedures are not covered.
  • Eyeglasses
  • Contact lenses
  • Optician, Optometrist, Ophthalmologist
  • Laser Eye Surgery
  • Acupuncturist (R.Ac.)
  • Anesthesiologist
  • Athletic Therapist (must provide professional registration number)
  • Audiologist
  • Chiropodist
  • Chiropractor (DC)
  • Clinical Counselor (RCC)
  • Dermatologist*
  • Dietitian or Nutritionist (Registered)
  • Gynaecologist (Ob. Gyn)
  • Homeopath (Registered Professional)
  • Kinesiology (Ontario only; must provide professional registration number)
  • Massage Therapist (must be provincially registered). Any tips are not eligible for reimbursement.
  • Midwife (Registered)
  • Naturopath (ND). Over-the-counter vitamins, supplements, and herbal products are not eligible. All drugs must be dispensed by a licensed pharmacist to be eligible for reimbursement.
  • Neurologist
  • Nurse (RN, LPN, NP)
  • Occupational Therapist
  • Orthopedist
  • Osteopath (must have a certificate or be licensed in the jurisdiction where the individual resides)
  • Pharmacist
  • Physician (MD), Pediatrician, Podiatrist (DPM), Surgeon
  • Physiotherapist (B.PhysT, B.ScPhysio, B.Physio, CPTA)
  • Plastic Surgeon (must be medically required with doctor certification)*
  • Prosthetist
  • Psychiatrist (MD)
  • Psychoanalyst
  • Psychologist (R. Psych)
  • Psychotherapist (RP)
  • Registered Psychotherapist
  • Respiratory Therapist
  • Social Worker (RSW, MFT)
  • Speech Therapist (SLP)
  • Traditional Chinese Medicine Practitioner (TCM)
  • X-Ray Technician
  • Any prescription medicine obtained through a licensed pharmacist is eligible. Please include a copy of your prescription and payment receipt when submitting your claim. 
  • Cosmetic surgery – considered a medical expense if performed for medical or reconstructive purposes, such as correcting a congenital deformity or an injury from an accident
  • COVID tests – completed and processed by a lab or pharmacy
  • Electrolysis – amounts paid to a qualified medical practitioner
  • Fertility-related procedures – expenses for medical treatment or hospitalization for conception of a child (expenses for a surrogate mother are not covered)
  • Laser eye surgery – amounts paid to a medical practitioner or a public or licensed private hospital
  • Medical services provided outside of Canada – eligible if paid to a medical practitioner or a public or licensed private hospital while traveling
  • MRI, ultrasound, and X-ray treatments
  • Treatment centre for a person addicted to drugs, alcohol, or gambling*
  • Diagnostic tests – non-holistic tests such as electrocardiographs, stool examinations, blood sugar tests, metabolism tests, radiological services, urine analysis, spinal fluid tests, allergy and asthma testing* (cannot be prescribed by a naturopath or nutritionist)
  • Women's Hormone Health (Science&Humans)
  • Men's Hormone Health (Science&Humans)
  • Weight Optimization (Science&Humans)
  • Women's Fertility (Science&Humans)
  • Men's Fertility (Science&Humans)
  • Perimenopause & Menopause (Science&Humans)
  • Andropause (Science&Humans)
  • Air conditioner – for a person with a severe chronic illness, disease, or disorder (eligible amount is $1,000 or 50% of the cost, whichever is less)*
  • Air filter, cleaner, or purifier – for severe chronic respiratory ailment*
  • Apparatus or materials – paid directly to a doctor, dentist, nurse, or hospital
  • Mobility devices – designed to assist an individual with a mobility impairment in walking
  • Baby breathing monitor – with written certification from a medical practitioner confirming risk of sudden infant death syndrome*
  • Bathroom aids – to help a person get in or out of a bathtub or shower, or on and off a toilet*
  • Brace – for a limb or spine
  • Braille devices – note takers, printers, synthetic speech systems, large print-on-screen devices, computer peripherals, and similar equipment for individuals who are blind*
  • CPAP (continuous positive airway pressure) devices and supplies
  • Crutches
  • Diabetic supplies and devices
  • Electronic bone healing device*
  • Exercise equipment – prescribed by a physician for treatment or recovery from an illness or injury*
  • Hearing aids or personal assistive listening devices, including repairs and batteries
  • Blood coagulation monitoring devices, pacemakers, including repairs and batteries*
  • Hospital bed – if required for use in the home*
  • Incontinence supplies – catheters, catheter trays, tubing, etc.*
  • Orthotic inserts, orthopedic shoes or boots*
  • Oxygen and related equipment*
  • Phototherapy equipment – for treating psoriasis or other skin disorders
  • Prosthetics – including artificial limbs
  • Renovation expenses – specifically required for a person with a mobility impairment (doctor confirmation required)*
  • Support hose or compression stockings – to relieve swelling*
  • TENS or electrotherapy devices*
  • Wheelchair, scooter, power-operated chair, or lifts – for individuals with mobility impairment*
  • Wigs – for individuals with abnormal hair loss due to an accident, disease, or medical treatment*
  • Doctor’s note or form completed by a doctor
  • Employee premiums paid to a non-government health, dental, or vision plan (e.g., Blue Cross)
  •  Gluten-free products (only the cost difference from a standard product is eligible)*. A celiac diagnosis is required. Include this diagnosis in your first claim. 
  • Home care – for an illness or disability*
  • Private healthcare – when membership or access fees to a private medical clinic are prepayment for eligible medical expenses
  • School – for individuals with mental or physical impairments* (subject to additional conditions; please contact us before claiming)
  • Travel for healthcare – when equivalent medical services are not available near your home and travel is reasonably direct and necessary* (subject to additional conditions; please contact us before claiming)
  • Travel insurance – emergency medical coverage only
  • Ambulance – to and from the hospital
  • Hospital bills
  • Vaccines*
Getting Started

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