Travel Insurance and Your HSA

Tickets? Money? Passports?  Have you got everything for the coming Canada Day long weekend?  While many Canadians will be laying low this year with the price of gas, I myself will be making my annual trip to see friends and family abroad, at a significant premium over last year.  Like many small business owners, I have a personal out-of-province travel policy to take with me.  What many people don’t know is that these policies are an eligible expense from a Health Spending Account!

That’s right!  You can sign-up for most group medical travel plans and the premium can be claimed from your HSA, similar to a private group insurance plan like Manulife’s Cover Me or similar products from Blue Cross.  I have Travel Assist, a product from Benecaid and ETFS.  It provides me with out-of-province medical and emergency sickness for up to $5 million of coverage per trip per person and a $75,000 referral benefit to cover medical and transportation costs in excess of provincial coverage.  Even better, it provides coverage for trip cancellation and lost baggage!  Having a travel policy is essential when leaving your province and given the nominal cost, every Canadian should be investing in this type of overage, especially during the busy summer travel months.

Since it is an eligible expense from my HSA, the premiums are paid with tax-free money making it even more affordable!  If you have an HSA, or are considering one, be sure to add a travel policy, you won’t regret it.  Bon Voyage!

Buyer Beware #6 – Mandatory Insurance

Some more help on finding the right HSA for you in my series on items you should look for when choosing an HSA provider…

Mandatory Insurance

There are many Health Spending Account (HSA) providers in the Canadian market these days.  I will not get into a name game over various providers but I did want to stress one major issue I have over how they package HSAs and their availability.  Specifically, the issue related to mandatory insurance.

Don’t get me wrong, insurance is ALWAYS a good idea if you are using an HSA for your core  benefits plan.  The issue that is counter-productive is the requirement of many HSA providers when it comes to insurance.  First off, an HSA is supposed to be a financing vehicle for your healthcare spending, not just a nice to have addition to insurance.  Many providers will not allow you to have an HSA unless you purchase their core health insurance product.  Why would they do this you ask?  It is a cash grab.  Most HSA providers use the HSA as a “nice to have” bonus to an individual health insurance product or combine the HSA into the overall plan itself.  The issue here is that as an HSA owner, you have the right to choose the insurance product you want to buy and it should never be a conditional requirement to access the benefits of an HSA.

I, for example, have had a Manulife “Cover Me” insurance product for many years.  It is my emergency back-up insurance should I ever need it.  I have never made any significant claims and pay the low premiums purely for protection only.  I also have a Benecaid HSA as an employee of the company.  At the time, I could have opted to purchase Benecaid’s Premiere Plan product (in my opinion superior to Manulife), however I decided to stay with Manulife as I had been with them for many years and my medical history for pre-existing conditions would have remained intact by staying.  Over the past few years, I have been able to claim my premiums to Manulife as an eligible expense from my HSA.  The key thing to note here is that I used my HSA from one provider to pay an insurance premium for a product I chose to purchase from another provider.   Choice is the key. 

When an HSA provider requires you to purchase their insurance product with an HSA, it takes away the freedom of choice the HSA is supposed to provide as a core benefit.  The HSA is your money and you should have the right to choose how it is spent.  If you want basic insurance coverage, you should be able to select any provider you desire.  The HSA allows you to tailor your overall health plan to suit your needs.  When an HSA provider asks you to choose a specific insurance plan they represent, they are not acting in the best interest of the client.

If you currently have an HSA or are considering one, be sure to ask your HSA provider about any requirements related to a sponsored insurance product.  If they only permit you to buy the product they recommend….buyer beware!!