When it comes to health benefits, Canadian employers have options. The issue is, most employers haven’t been exposed to self-funded solutions like a Health Spending Account (HSA).
So how do they compare to traditional premium-based plans we commonly see in real life? Let’s follow the journey of two employees—Sarah, who uses an HSA, and Jake, who is covered under an insured plan—to see how their healthcare experiences unfold.
Meet Sarah: The HSA Member
Sarah is a marketing professional who loves staying active and prioritizes her well-being. She enjoys hiking on weekends, hitting the gym after work, and keeping herself as healthy as she can. Her employer provides an HSA, which gives her a tax-free account to pay for any CRA eligible medical expenses.
Sarah’s Experience with an HSA
One morning, Sarah wakes up with a stiff neck from a tough workout. Instead of worrying about whether her health plan covers physiotherapy or how much is still eligible, she books an appointment with her preferred physiotherapist, knowing she can claim the full expense through her HSA. After her session, she quickly uploads the receipt to her benefits portal and gets reimbursed within a few days.
A few months later, Sarah needs a new pair of prescription glasses. She browses her favorite optical store without stressing over coverage limits. Since her HSA funds are flexible, she opts for a more stylish, high-quality pair without concern for out-of-pocket expenses. She pays upfront, submits her claim, and receives her reimbursement shortly after.
Sarah appreciates that she doesn’t have to worry about monthly deductions from her paycheck. The money in her HSA is hers to use for the health expenses that matter most to her, without restrictive categories or surprise claim denials. With her benefits working for her lifestyle, she feels in control of her healthcare choices.
At year's end, Sarah checks her HSA balance and is delighted to see she still has funds available. Sarah's HSA funds accumulate for two years, so she’ll be able to carry her balance forward and cover all her expected expenses the following year, as well as any unexpected expenses that arise from her on-the-go lifestyle.
Meet Jake: The Insured Plan Member
Jake works in a similar role to Sarah and enjoys a busy social life. He plays in a recreational soccer league, travels frequently for work, and occasionally experiences muscle strains from an active lifestyle. His employer provides him with a traditional insured plan that follows a standard structure, with defined coverage categories and maximum limits.
Jake’s Experience with a Traditional Insured Plan
After pulling a back muscle during a soccer match, Jake books an appointment with a physiotherapist. However, when he checks his benefits afterwards, he realizes his plan only covers a portion of the visit, leaving him to pay a significant amount out of pocket. Since he’s already paying a portion of his monthly health premiums, this unexpected cost is frustrating.
Later in the year, Jake’s prescription glasses break, and he finds himself on the hunt for a new pair. He finds a stylish pair but soon discovers that his plan only covers $200 for eyewear every two years, even though the glasses he wants cost $400. He either has to downgrade his choice or cover the extra cost himself.
One day, Jake hears about acupuncture from a coworker and thinks it might help his chronic back pain. Excited, he looks into it—only to find out his plan doesn’t cover alternative treatments. If he wants to try acupuncture, he’ll have to pay entirely out of pocket.
Despite having a benefits plan, Jake often feels like he’s paying for coverage he can’t fully use. He continues to pay monthly premiums but finds himself limited by predefined coverage categories and annual limits. Sometimes, he wonders if there’s a better option.
At the end of the year, Jake sees his coverage reset. He’s all set, for the first few months anyways. He reflects on all those items he sees listed as part of his plan that he didn't need this year – drugs, prosthetics, therapy – is he paying “just in case” he uses those services and missing out because he didn't?
