Tim Kane at MyHSA explores the ins and outs of Health Spending Accounts (watch for US articles here - American HSAs are a substantially different tool than Canadian HSAs). There has been much concern in the past 2 years about the extent to which corporations where the owner is the sole employee can employee HSAs. The article also details the difference between an HSA and a Cost-Plus arrangement, which presents substantially more tax risk.
HSA’s for Sole Employees
We recently received the question “are PHSP’s/HSA’s suitable for a sole employee, who is also a shareholder?” An advisor sent us this question after reading this tax update that was sent to them by a client’s accountant. Although the writer does bring up some valid points on the plans, there seems to be a lot of confusion between a “cost plus plan” and a true “PHSP” plan. A PHSP (HSA) and Cost Plus plan, although conceptually alike (cost plus fees), the treatment of the two plans in the practica
Tim Kane
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