How a PHSP Works for better Health & Dental Coverage

Step 1 – Obtaining the Service

The Covered Employee (or member of their household) obtains a health or dental service for which they pay directly to a health service provider, such as a dentist, doctor or optometrist. It can be by cash, cheque or personal credit card. The business does not pay directly for this.

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Let’s use a $100 dental expense for an example. Once the dental service is provided, a receipt is obtained from the dentist. When asked by your dentist if the patient has dental coverage, the answer is ‘No’. A PHSP provides full dental coverage but since there are no premiums like traditional dental plans, there are no funds to co-share with an insurance company. In some cases, health providers even have lower fees for patients with no health & dental plan.

At this point the employee is out-of pocket $100.

Step 2 – Making the Claim with a PHSP

Brock Health offers two kinds of health and dental plans. (Prepaid and Pay-as-You-Go). While the fees and coverage are the same under both, the process for submitting claims is slightly different.

Prepaid Plans

The employer has already made arrangements to fund the plans on behalf of the Covered Employee. So, in this case the claimant simply submits the claim along with copies of the receipts to Brock Health, directly through our website using our secure email service, e-Courier, or through regular mail. The form and instructions for doing so are on this website at this page.

Pay-As-You-Go Plans

In this case, the employer needs to provide the funding to Brock Health before the Covered Employee can be reimbursed. Unlike a traditional health & dental plan, where premiums are paid in advance, Brock Health has no funds to pay out the claim until the employer provides them.

To initiate the claim, the claimant (Covered Employee) must provide a copy of all receipts and a completed claim form to the employer (PHSP planholder).

The PHSP planholder forwards the receipts and claim form to Brock Health along with payment. In our example, the payment will total $105.00 (the $100 medical expense plus the $5 Brock Health fee*).

Payment can be made in a variety of ways:

i) By filling out a cheque and then scanning and submitting it to us through our website using our secure email service e-Courier,

ii) Authorization for Brock Health to withdraw funds electronically by Pre-Authorized Debit (PAD) from a bank account of the business. PAD’s are reoccurring and do not need to be submitted with each claim. The PAD Agreement is located here.

iii) A business cheque for the total amount by postal mail

Step 3 – Receiving the Reimbursement

When Brock Health receives the claim, the claimant will receive an email confirming that the claim has arrived and processing has begun. Brock Health then adjudicates the claim to ensure the health & dental coverage is correct and accurate, thereby earning their 5% fee. Brock Health strives to complete this processing within 5 business days. Any portion of a claim that is disallowed will be refunded to the business, including the administration fee.

The tax-free reimbursement is then made to the claimant. A second email notification is sent to the claimant indicating that payment has been issued and is en-route. In our example , the payment would be for $100 (less any disallowed amount for ineligible items). This payment can be sent to the claimant in paper or electronic format. It will be:

i) A cheque for the total eligible amount of the claim by postal mail, or

ii) Brock Health can Direct Deposit funds electronically into the bank account of the Covered Employee. To register for Direct Deposit simply send a copy of a VOID cheque to Brock Health with the Direct Deposit Authorization, either through our website with E-Courier secure email or through regular mail. All claims will then be paid electronically to that bank account until you change or terminate the authorization. Direct deposit will take up to five business days from receipt of the second email.

The Final Outcome – A health & dental plan where 95% of the cost will benefit the employees

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At this point, the Covered Employee is now fully reimbursed and is no longer out-of-pocket anything. From the Covered Employee’s viewpoint, it is better than traditional health & dental plans because it offers more comprehensive health & dental coverage and is much quicker.

The business remains out-of-pocket having fully funded the employee claim. As a result, the PHSP planholder (in our example) receives a tax receipt of $105 from Brock Health at the end of their fiscal year. A health & dental plan is a 100% tax deductible business expense as a non-taxable employee benefit.

The net effect of these transactions is the PHSP business owner has now borne the cost of providing employee health benefits to its Covered Employees.

  • For small business owners with no employees, this means your family health benefits are now tax free.
  • For businesses with employees, the 5% fixed fee combined with caps established by the PHSP planholder makes this much more economical than premium-based health & dental plan insurance.

 

* Brock Health charges GST/HST on our administration fee only. Please make sure to use the proper claim form for all calculations and include this amount in the payment.