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What is a Cost Plus claim?

It is a claim:

  • For an expense that is an eligible medical, dental or hospital expense under the Income Tax Act (Canada);
  • For an expense that is not covered, or exceeds the coverage provided, under the group benefits plan
  • For designated plan members and their dependents who are covered under the group medical or dental plan.

Cost Plus claims are limited to $50,000 per person per benefit year.

Canada Revenue Agency may determine that Cost Plus benefit coverage does not qualify as a Private Health Services Plan and therefore any Cost Plus claims processed on this basis may not qualify as either a valid business expense or as non-taxable income to the plan member.

What does the plan sponsor pay to the insurer?

In addition to the amount of the Cost Plus payment to the plan member, the plan sponsor must pay the following administration fees and taxes:

  • Insurer administration fees
  • Applicable provincial premium tax
  • Applicable sales tax