2015-0610751C6 2015 CTF Q5 PHSP update

Principal Issues: Does the CRA have an update regarding its position on what qualifies as a private health services plan?

Position: Yes

Reasons: See response

Author: Waugh, Phyllis
Section: -

2015 Canadian Tax Foundation Conference
CRA Roundtable

Private Health Services Plan

Question 5

Does the CRA have an update regarding its position on what qualifies as a private health services plan (PHSP)?

CRA Response:

After a detailed internal review and consultation with Finance Canada and external stakeholders, the CRA has revised its position on what qualifies as a PHSP.  Our previous position was that all medical expenses covered under a plan had to be eligible for the medical expense tax credit (METC) for the plan to qualify as a PHSP.  That is, it was an all or nothing test.  Effective January 1, 2015, a plan is considered a PHSP as long as the premiums paid under the plan relate “all or substantially all” to medical expenses that would otherwise qualify for METC (assuming all other conditions to be a PHSP are met). 

Our revised position will be posted on the CRA website shortly.

Phyllis Waugh
2015-061075
November 24, 2015

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