Leave a commentThe Health and Welfare Trust provides expanded medical and dental coverage to professional and business owners, their families and designated employees. The only stipulation is that the sponsoring company must be incorporated.
What are the advantages?
- Contributions made to the HAWT are tax-deductible to the company
- Employees enjoy a tax free benefit
- Out-of-pocket medical costs are turned into tax-deductible corporate expenses
- Reduced administration cost as the Plan is internally administered
- Flexibility in providing additional coverage for employees or providing coverage that would otherwise be cost prohibitive through established insurance providers
How It works
- The Employee submits claim form & receipts.
- The Employer receives claim form & issues a cheque for the expense to the HAWT account
- The HAWT account receives the cheque & issues a cheque for the expense from the HAWP account to the employee
The Rules
- Employer’s contributions to the fund cannot be more than the amounts required to provide the benefits listed in the agreement.
- The HAWT must be set up for two or more employees or for a single worker provided the benefits are available to future non shareholder employees.
- The Plan must not be established as a shareholder’s only benefit but may be made available to shareholders who are actively employed by the Company.
- To qualify for a HAWT the funds of the trust can not revert to the employer.
- Members should be provided with letters confirming that their benefits and their eligibility for Plan benefits are as a result of their employment with the company. This letter should also detail the benefits which are covered under the trust and stipulate any benefit maximums.
- Health spending limits are for the current year and cannot be carried forward in the next calendar year.
- The benefit amount offered to employees should not be below a minimum of $1,000 per year.
To inquire further or to set up a HAWT contact a reputable Trust Lawyer or Actuary.