Sun Life: Health & Personal Spending Accounts (HSA/PSA)
Overview
When you enroll in the group benefits plan with Sun Life, you'll receive an allocation of $300 split evenly between a Health Spending Account (HSA) and a Personal Spending Account (PSA). These accounts provide flexibility in managing health and wellness expenses.
Each January following your start date, you'll receive $300 and you may update your account elections at the end of each year to tailor your benefits depending on your health and wellness preferences (e.g. you may allocate 100% of the $300 to your HSA, or 100% of the $300 to your PSA).
Note: There is no carryover for HSA or PSA accounts—they can only be used in the same calendar year they are allocated for.
Explanation of Account Types
Health Spending Account (HSA)
The HSA is a non-taxable benefit designed to reimburse costs for medical, hospital, and dental expenses that are eligible under the Income Tax Act (Canada) and are not paid, or not paid in full, under your group plan, your spouse’s plan or any government-sponsored plan. More information about the HSA and eligible expenses can be found here.
Who is this best for? An HSA is beneficial for team members who want to use their $300 towards medical expenses only. For example, it can be used for topping up the difference for paramedical services, covering the cost of medical equipment, contributing towards the cost of major dental work, making a contribution towards laser eye surgery, etc.
Personal Spending Account (PSA)
The PSA supports a broader range of wellness-related expenses, including fitness memberships, health products, and even financial services. Unlike the HSA, the PSA is a taxable benefit, giving you the freedom to invest in your overall well-being. Because they are taxable, PSA expenses are not limited by the CRA’s Income Tax Act. Offering a PSA is similar in some ways to offering a cash bonus—Any amounts used are added to payroll at the end of the year as a taxable benefit since it’s considered income. The list of options a PSA can be used for is endless, but common claims can be found here.
Who is this best for? A PSA is beneficial for anyone that wants the flexibility to put their $300 towards non-medical activities or things that they’ve identified will support their wellbeing. You cannot submit medical expenses through a PSA account. It can be used for RRSP or TFSA contributions as well, making it a flexible option to contribute towards your personal savings accounts. For more information, seeSun Life's List of Eligible PSA Expenses.
How will I be taxed if I choose to use the PSA? The bonus amount will be added to your income for the year and you'll pay taxes on it just like you would any other income. For illustrative purposes, let's say that your salary is $50k, and you've used your full $300 PSA this year. The $300 bonus amount would be added to your overall income bringing your total income to $50,300. The $300 bonus would then be taxed on the assumption of your new annual income of $50,300 being the highest marginal tax rate rather than a tax rate based on your salary.
Submitting HSA/PSA Claims
To be able to submit claims through your HSA/PSA, you will need to ensure you have set-up your direct deposit information. Navigate to Submit a Claim after logging in for the first time to set up your direct deposit.
When you select Submit a Claim, you will see either HSA, PSA or both available depending on your allocation for the year. You can submit a claim directly to these accounts, or for HSA only, you can submit the remainder of a health claim that has been submitted through our group benefits plan. For example, if you submitted a claim for a $100 massage, and only $80 was covered, you can submit the remaining $20 through your HSA. Whereas if you bought a new bike for $500, you could get reimbursed through your PSA for $300 if your funds are allocated there.
Checking Your Balance
At any time, you can log in to the Sun Life mobile app to check the balance in either your HSA or PSA account. To do so, click Coverage Information and select the account you'd like to check the usage for. Once you have exhausted your HSA or PSA balance, it will no longer appear as an option you can submit claims to.
Updating HSA/PSA Elections
We will send an announcement each December to determine how you want to allocate your HSA/PSA funds for the next calendar year. This is the only time of year changes can be made. You will be able to submit changes in December by logging into BambooHR, navigating to My Info > Personal, and updating the HSA and PSA election amount fields, ensuring the total of both fields is equal to the allocated total amount you've been given. For new team members, your funds will be split equally between both options, so you will receive $150 in each account.