1. How we pay our medical expenses
Using a fully insured plan
Out of pocket
Private Health Services Plan (PHSP)

2. There are tax consequences in not using a PHSP
3% Rule
Using after tax dollars
Why settle for a non-refundable tax credit when you can deduct the entire medical cost from income?

3. CRA 3% Rule …. Line 330
Your total expenses have to be more than either 3% of your net income (line 236) or $2,208, whichever is less.
The calculation used takes three elements into account.
Actual medical expense, less
3% of income, or
$2,208
Which ever is less

4. $60,000 income with $2000 medical expenses
Without PHSP
Cost: $2,000
Deduct: $1,800 (3% Rule)
$200
Provincial Tax Credit = 6%
Federal tax Credit = 15%
Total Non- Refundable
Tax Credit $42
With PHSP
Cost: $2,000
Fee(10%): $200
$2,200
Deductible as an expense
$ 2432 includes taxes