With tax reform from Ottawa proving divisive, Edge Benefits launches new program to aid incorporated businesses
We are still some way off tax season, but it’s the topic that’s dominating discourse in the advisory field currently. The federal government’s proposed changes for incorporated business, specifically income sprinkling and passive investment accounts, have not been warmly received by financial planners.
The self-employed make up a significant part of advisor’s practices, and tax planning is a major service they provide to them. Another is setting up benefit packages, which are becoming increasingly complex. While the tax advantage of being your own boss may be reduced in the near future, perks do remain in incorporating a business.
This month, The Edge Benefits launched its Health Spending Account, which accompanies its Health and Dental platform that was released in June. Small business owners are the Edge’s main clients, and company president and CEO Neil Paton is confident the new platform will prove popular among that community.
“It really is designed as a bolt onto the health and dental plan,” he explains. “It gives people that own their own business all kinds of flexibility to use corporate dollars to pay for whatever medical expenses they have for the family as opposed to personal dollars.”
In addition, the platform is versatile enough that business owners can differentiate between their employees. The working environment is much more fluid in 2017, with contract and part-time workers more common. It means benefit programs need to be adaptable too, as Paton outlines.
“The idea is that you set up a health spending account and you can decide whether it is just for you as an owner of an incorporated business or if you want to include different classes for employees, like more benefits for executives,” he says.
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The self-employed make up a significant part of advisor’s practices, and tax planning is a major service they provide to them. Another is setting up benefit packages, which are becoming increasingly complex. While the tax advantage of being your own boss may be reduced in the near future, perks do remain in incorporating a business.
This month, The Edge Benefits launched its Health Spending Account, which accompanies its Health and Dental platform that was released in June. Small business owners are the Edge’s main clients, and company president and CEO Neil Paton is confident the new platform will prove popular among that community.
“It really is designed as a bolt onto the health and dental plan,” he explains. “It gives people that own their own business all kinds of flexibility to use corporate dollars to pay for whatever medical expenses they have for the family as opposed to personal dollars.”
In addition, the platform is versatile enough that business owners can differentiate between their employees. The working environment is much more fluid in 2017, with contract and part-time workers more common. It means benefit programs need to be adaptable too, as Paton outlines.
“The idea is that you set up a health spending account and you can decide whether it is just for you as an owner of an incorporated business or if you want to include different classes for employees, like more benefits for executives,” he says.
The Edge Benefits, a member of The Co-operators Group, has been in operation since 1985. Using Green Shield as its insurance provider, its focus has moved principally into the digital realm in recent years. The new platform enables smart phone expense submission, using a "pay as you go" methodology that does not require any up-front funding. The Health and Dental program has proven a huge success since its launch in June and the company’s head has high hopes that the Health Spending Account will prove similarly popular.
“There are some limitations in our Health and Dental plan, some things that aren’t covered, but the beauty of a Health Spending Account is that whatever legitimate medical expenses an individual is faced with, if they want it to be covered by the Health Spending Account and want to use corporate dollars, they don’t have to worry about the limits in our Health and Dental program,” he says.
That means combining both programs for your benefit needs, which will prove even more important should the proposed tax changes for incorporated businesses come to pass in the next budget.
“If you want to pay for braces for one of your kids, then you can use the Health Spending Account for the braces, and use the Health and Dental for basic medical expenses. It gives you more power and flexibility to take advantage of the tax deductibility associated with CRA programs for medical benefits.”Related stories:
Advisors and brokers should stop ignoring living benefits, says industry veteran
A certain hard-driving professional having a tough time getting coverage
