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

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 $1,926, whichever is less. The calculation used takes three elements into account. –Actual medical expense, less –3% of income, or –$1,926 Which ever is less

4. $60,000 income with $2000 medical expenses With PHSP –Cost: $2,000 –Fee(10%): $200 $2,200 Deductible as an expense $ 2432 includes taxes Without PHSP –Cost:$2,000 –Deduct: $1,800 (3% Rule) – $200 Provincial Tax Credit = 6% Federal tax Credit = 15% Total Non- Refundable Tax Credit$42.00