Welcome

Health Care Spending Account (HCSA) — An Introduction

A benefit that works for YOU

What's an
HCSA?

An HCSA is a flexible, tax-effective benefit that covers a wide range of health and dental expenses for you and your eligible dependents.

📋 Section 1 – What is it?
⚙️ Section 2 – How it works
🏖️ Section 3 – Administration
📅 Effective April 1, 2026 — this benefit will be available on the active member plan.
Hi there! Let's learn about your HCSA together! 🎉
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Health Care Spending AccountIntroduction
Section 1

What is a Health Care Spending Account (HCSA)?

The Big Picture

An HCSA is an employer-funded account that gives you a set amount of money each year to spend on eligible health and dental expenses — 100% tax-free for you! (Except Quebec) 🎉
  • ✓Covers health costs that your regular benefits plan does not fully pay — like co-pays, ineligible services, or amounts over the standard maximum.
  • ✓Works alongside your existing health and dental coverage — it's a top-up benefit.
  • ✓Only expenses defined as a medical expense in the CRA Income Tax Act are eligible. General wellness items like gym memberships are ineligible.
Think of it as a flexible health "bank account"! 💳
Health Care Spending AccountSection 1 – Overview
Section 1

What Expenses Are Eligible?

CRA-Eligible Expenses & Allocation Amounts

✅ Commonly Claimed Items

  • Prescription drugs & medications co-pay
  • Dental treatments not covered under the base plan
  • Vision care (glasses and contacts) top up
  • Physiotherapy & massage therapy over the maximums
  • Some medical supplies not covered through the health plan

✅ Annual Allocation Amounts

  • Shortened first year with escalating entitlements. Expenses with a service date on or after April 1, 2026 are eligible.
  • April 1, 2026: $650
  • January 1, 2027: $800
  • January 1, 2028: $1,000
💡 Tip: Claim eligibility is based on the full CRA Medical Expense Tax Credit list — typically much broader than what your regular insurance covers. Always check your balance and eligibility before incurring an expense!
So many things are eligible — you might be surprised! 😊
Health Care Spending AccountSection 1 – Eligible Expenses
Section 1

Who Can Claim?

Eligible Members

Members who are eligible: Full-time members and Regular Part-time (RPT) members enrolled in either the health or dental benefits.

Who Can Claim?

  • 👤You (the active member).
  • 👨‍👩‍👧‍👦Your dependents — based on CRA definitions, which are broader than the insurance plan definition.
  • 👥Shared Allocation: The allocated amount for the year is per family (member and eligible dependents).
⭐ Important: CRA's definition of "dependent" includes a wider circle — parents, grandparents, siblings, and other relatives if you can claim a medical expense tax credit for them. They must be residents of Canada. Confirm eligibility on the CRA website.
More family members may qualify than you think! 👨‍👩‍👧
Health Care Spending AccountSection 1 – Who Can Claim
Section 2

How Does the HCSA Work?

Claiming

🙅 Payment is not automatic. You must indicate on the app or claim form that you want unpaid balances paid through your HCSA. Otherwise the expense only goes through your base plan.

How Do I Submit a Claim?

  • 1Pay for your eligible expense as normal — at the pharmacy or out of pocket. The HCSA cannot be used at point of purchase.
  • 2Submit to the base plan first. Indicate whether you want the unpaid portion assessed against your HCSA.
  • 3Any eligible unpaid amount will be applied to your HCSA balance. Check your balance on the app or by calling Canada Life.
  • 4Reimbursement is paid tax-free (except Quebec)! ✅
📋 Deadline: HCSA claims must be submitted by May 31 of the following year after the expense was incurred.
You're already enrolled — no extra paperwork needed! 🎊
Health Care Spending AccountSection 2 – How It Works
Section 2

Balance Carry Forward — How It Works

Don't Lose Your Balance!

Unused HCSA funds may be carried forward to the next year to December 31st. Here's an example:

Year Carry Fwd In New $ Total Claims Balance Forfeited Carry Fwd Out
2026$0$650$650$200$450$0$450 ✓
2027$450$800$1,250$400$850-$50$800 ✓
2028$800$1,000$1,800$1,200$600$0$600 ✓
2026
New Allocation$650
Carry Forward In$0
Total Available$650
Claims Paid$200
Forfeited$0
Carry Forward Out$450 ✓
2027
New Allocation$800
Carry Forward In$450
Total Available$1,250
Claims Paid$400
Forfeited-$50
Carry Forward Out$800 ✓
2028
New Allocation$1,000
Carry Forward In$800
Total Available$1,800
Claims Paid$1,200
Forfeited$0
Carry Forward Out$600 ✓
⏰ Key Rule: The balance can be carried forward for one additional plan year (to December 31st). After that, any remaining carry-forward is forfeited. The balance carries forward but the claim date does not — you cannot use a new year's budget for prior year claims.
Unused funds roll over for 12 months! 💰
Health Care Spending AccountSection 2 – Carry Forward
Section 3

Additional HCSA Administration

Things to Keep in Mind

Your HCSA ceases as of your retirement date 🏖️ — only claims with a service date on or before your retirement date are eligible. You will have extended time to submit claims.

You cannot contribute your own funds or roll over unused amounts to another account (e.g. RRSP). The allocation has no cash value outside the plan.

Members must be eligible and enrolled in health and/or dental benefits to access the HCSA. Members on employer-paid leave are eligible as long as the employer continues funding the premium.

🎯 Tip: Confirm claim eligibility before it is incurred, and use your HCSA balance strategically to avoid forfeiting amounts at year-end.
📌 Note: For members with common-law spouses, the base plan has no co-habitation restrictions. However, for the HCSA, a common-law spouse must qualify as a common-law partner for the CRA medical expense credit.
Your future self will thank you for planning ahead! 🌟
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Health Care Spending AccountSection 3 – Things to Note
Admin Notes

Important Administrative Items

Key Dates & Rules

📅 Effective Date

The HCSA is effective April 1, 2026. Expenses incurred before this date are not eligible.

⚠️ Claim Submission

Submit through My Canada Life at Work, the website, or paper form. Cannot be submitted at point of purchase. Indicate "unpaid balances to HCSA" when submitting. The choice to use your HCSA is always yours.

⚠️ CRA Requirement: CRA governs both claim eligibility and dependent eligibility.
📋 Quick Checklist: Eligible & enrolled in health/dental? ✓   Checked CRA-eligible expense list? ✓   Checked dependent eligibility? ✓   — You're good to go!
A few important rules — you've got this! 📝
Health Care Spending AccountAdministrative Items
That's a wrap!

Stay tuned for more information over the next few weeks! 🎉

Quick Recap

  • 1Section 1: An HCSA is a flexible, tax-free (except Quebec) health account funded by your employer, using CRA's broad eligible expense and dependent definitions.
  • 2Section 2: No enrolment needed — just submit claims through My Canada Life. Unused balances carry forward to December 31st of the following year.
  • 3Section 3: Be aware of administration rules — balances carry forward for one plan year only.
  • 📋Admin: HCSA is effective April 1, 2026.
🌟 Remember: Your HCSA is a valuable benefit — make the most of it! This is just the first of a few information pieces coming your way.
Great job! More info coming soon! 🌟🎊
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Health Care Spending AccountEnd of Presentation
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