TEST – HCSA

Health Care Spending Account – An Introduction

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.

Health Care Spending Account

Introduction

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) 🎉

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Covers some medical expenses that your regular benefits plan does not fully pay — like co-pays, ineligible services, or amounts over the standard maximum.

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Works alongside your existing health and dental coverage — it’s a top-up benefit.

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Only expenses defined as a medical expense in the CRA Income Tax Act are eligible. General wellness items like gym memberships are ineligible.

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HCSA follows the CRA Tax definition of dependents. If you can claim the medical expense tax credit for someone on your taxes, they may be eligible. See the CRA website for details.

Health Care Spending Account

Section 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!

Health Care Spending Account

Section 1 – Eligible Expenses

Section 2
How Does It Work? Submitting a Claim

Step-by-Step: Using Your HCSA

Pay for your eligible expense as normal — at the pharmacy or out of pocket. The HCSA cannot be used at Point of Purchase.

Submit to the base plan first. When using your HSCA, indicate you want benefits to be paid from both the benefit plan and the HCSA through the My Canada Life at Work app/website or paper form).

Eligible amounts will be deducted from your HCSA balance.

Reimbursement is tax-free (except Quebec). View your balance anytime through the My Canada Life at Work website or app.

⚠️ Note: HCSA claims cannot be submitted at the point of purchase. You must submit for reimbursement through My Canada Life at Work or by paper claim. The choice to use your HCSA is always yours!

💡 No Enrolment Needed: You’re automatically enrolled in the HCSA as long as you’re eligible and enrolled in health and/or dental benefits. Start submitting claims April 1st!

Health Care Spending Account

Section 2 – How to Submit

Section 2
What Happens to Unused Funds? Carry Forward Rules

Carry Forward Example

2026

New Allocation

$650

Carry Forward (In)

Total Available

$650

HCSA Claims Paid

$200

Forfeited

Carry Forward (Out)

$450 ✓

2027

New Allocation

$800

Carry Forward (In)

$450

Total Available

$1,250

HCSA Claims Paid

$400

Forfeited

-$50

Carry Forward (Out)

$800 ✓

2028

New Allocation

$1,000

Carry Forward (In)

$800

Total Available

$1,800

HCSA Claims Paid

$1,200

Forfeited

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.

Health Care Spending Account

Section 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.

🎯 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.

Health Care Spending Account

Section 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!

Health Care Spending Account

Administrative Items

That’s a wrap!
Stay tuned for more information over the next few weeks! 🎉

Quick Recap

Section 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.

Section 2: No enrolment needed — just submit claims through My Canada Life. Unused balances carry forward to December 31st of the following year.

Section 3: Be aware of administration rules — balances carry forward for one plan year only.

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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.

Health Care Spending Account

End of Presentation

This communication is for informational purposes only. If there is any discrepancy between this and the policies, the policy will prevail.
Health Care Spending Account • Effective April 1, 2026