Cost Plus is a fee-for-service program that can be used to reimburse plan members for eligible expenses that are not covered under your current employee benefits program.
Cost Plus can be used to cover special health expenses, annual deductibles, co-insurance amounts, as well as services that exceed annual plan limits. It can also be used to reimburse expenses which are prohibitive to insure for many small businesses like orthodontics or laser eye surgery.
Cost Plus provides a two-fold benefit. Firstly, it provides a tax effective way to enhance the benefit plan for a specific class of employees who you may want to benefit from higher reimbursement rates or broader coverage. Secondly, the cost of the claim, the fees and the taxes are deductible health care expenses for the company and are non-taxable income for plan members in most provinces. The tax treatment of Cost Plus claims should be discussed with your professional tax expert to ensure compliance with CRA.