,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act--,m1n+ (
  8,private ,h1l? ,s]vices ,plan0
,numb]3 ,,it-#cci;,r#b
,date3 ,augu/ #h1 #aihi
,ref];e3 ,subsec;n #bdh7#a7 7al
  p>agraphs #f7#a77a71 #ah7#a77a71
  #aah.b7#b77q7 & #aah.b7#c77b77

               ,applic,n
    
  ,! provi.ns 4cuss$ 2l >e e6ective =!
#aihh & subsequ5t tax,n ye>s4 ,= tax,n
ye>s prior 6#aihh1 ref] 6,9t]pret,n
,bullet9 ,,it-#cci;,r dat$ ,june #a1
#aihc4

                ,summ>y
    
  ,? bullet9 4cusses ! m1n+ (a 8private
h1l? s]vices plan0 & describes "s     #a
             ,,it-#cci;,r#b          a#a
(! >range;ts = cov]+ ! co/ ( m$ical &
hospital c>e "u s* a plan4 ,x al 4cusses
! tax /atus ( 3tribu;ns made 6s* a plan
0an employ] on 2half ( an employee &!
circum/.es "u : ! premium co/s 9curr$
0an employee qualify z m$ical exp5ses =
purposes (! m$ical exp5se tax cr$it4

          ,4cus.n & ,9t]pret,n
            7p>agraphs #a-i7
    
#a4 ,3tribu;ns made 0an employ] 6or "u a
  private h1l? s]vices plan on 2half (
  an employee >e exclud$ f ! employee's
  9come f an (fice or employ;t 0virtue (
  subp>agraph #f7#a77a77;i74 ,on ! o!r
  h&1 an am.t pd 0an employee z a
  premium1 3tribu;n or o!r 3sid],n 6a
  private h1l? s]vices plan qualifies z
  a m$ical exp5se = purposes (! m$ical
  exp5se tax cr$it 0virtue ( p>agraph
  #aah.b7#b77q74 ,! am.ts s pd m/ 2 = "o
  or m (
                                      #b
             ,,it-#cci;,r#b          b#a
  7a7 ! employee
  7b7 ! employee's sp\se &
  7c7 any memb] (! employee's h\sehold )
    :om ! employee is 3nect$ 0blood
    rel,n%ip1 m>riage or adop;n4
  
  ,= fur!r -;ts on ! m$ical exp5se tax
  cr$it see ! curr5t v].n ( ,,it-#eai4
  ,= purposes (! ,act1 a 8private h1l?
  s]vices plan0 is def9$ 9 subsec;n
  #bdh7#a74
#b4 ,! 3tracts ( 9sur.e & m$ical or
  hospital c>e 9sur.e plans ref]r$ 6in
  p>agraphs 7a7 & 7b7 (! def9i;n 9
  subsec;n #bdh7#a7 ( 8private h1l?
  s]vices plan0 9clude 3tracts or plans
  t >e ei 9 :ole or 9 "p 9 respect (
  d5tal c>e & exp5ses4
--------------------------------------#b
#c4 ,a private h1l? s]vices plan
  qualify+ "u p>agraphs 7a7 or 7b7 (!
  def9i;n 9 subsec;n #bdh7#a7 is a plan

                                      #c
             ,,it-#cci;,r#b          a#b
  9 ! nature ( 9sur.e4 ,9 ? respect !
  plan m/ 3ta9 ! foll[+ basic ele;ts3
  7a7 an "utak+ 0"o p]son1
  7b7 69demnify ano!r p]son1
  7c7 = an agre$ 3sid],n1
  7d7 f a loss or liabil;y 9 respect (
    an ev5t1
  7e7 ! happ5+ ( : is unc]ta94
#d4 ,cov]age "u a plan m/ 2 9 respect (
  hospital c>e or exp5se or m$ical c>e
  or exp5se : norm,y wd o!rwise h
  qualifi$ z a m$ical exp5se "u !
  provi.ns ( subsec;n #aah.b7#b7 9 !
  det]m9,n (! m$ical exp5se tax cr$it
  7see ,,it-#eai74
#e4 ,if ! agre$ 3sid],n is 9 ! =m ( ca%
  premiums1 !y usu,y relate closely 6!
  cov]age provid$ 0! plan & >e bas$ on
  -put,ns 9volv+ actu>ial or simil>
  /udies4 ,plans 9volv+ 3tracts ( 9sur.e
  9 an >m's l5g? situ,n norm,y 3ta9 !
  basic ele;ts \tl9$ 9 #c abv4
#f4 ,9 a 8co/ plus0 plan an employ]
  3tracts )a tru/e$ plan or 9sur.e    #d
             ,,it-#cci;,r#b          b#b
  -pany =! provi.n ( 9demnific,n (
  employees' claims on def9$ risks "u !
  plan4 ,! employ] promises 6reimburse !
  co/ ( s* claims plus an adm9i/r,n fee
  6! plan or 9sur.e -pany4 ,! employee's
  3tract ( employ;t requires ! employ]
  6reimburse ! plan or 9sur.e -pany =
  prop] claims 7fil$ 0! employee7 pd1 &a
  3tract exi/s 2t ! employee &! tru/e$
  plan or 9sur.e -pany 9 : ! latt]
  agrees 69demnify ! employee = claims
  on ! def9$ risks s l;g z ! employ;t
  3tract is 9 gd /&+4 ,provid$ t ! risks
  6be 9demnifi$ >e ^? describ$ 9
  p>agraphs 7a7 & 7b7 (! def9i;n (
  8private h1l? s]vices plan0 9 subsec;n
  #bdh7#a71 s* a plan qualifies z a
  private h1l? s]vices plan4
#g4 ,an >range;t ": an employ]
  reimburses xs employees =! co/ (
  m$ical or hospital c>e may -e )9 !
  def9i;n ( private h1l? s]vices plan4
  ,? o3urs ": ! employ] is obligat$ "u !
  employ;t 3tract 6reimburse s*       #e
             ,,it-#cci;,r#b          c#b
  exp5ses 9curr$ 0! employees or _!
  dep5dants4 ,! 3sid],n giv5 0! employee
  is 3sid]$ 6be ! employee's cov5ants z
  f.d 9 ! collective agree;t or 9 !
  3tract ( s]vice4
#h4 ,m$ical & hospital 9sur.e plans (f]$
  0,blue ,cross & v>i\s life 9sur]s1 =
  example1 >e 3sid]$ private h1l?
  s]vices plans )9 ! m1n+ ( subsec;n
  #bdh7#a74 ,9 a4i;n1 ! ,gr\p ,surgical
  ,m$ical ,9sur.e ,plan cov]+ f$]al
  gov]n;t
--------------------------------------#c
  employees qualifies z a private h1l?
  s]vices plan )9 ! m1n+ ( subsec;n
  #bdh7#a74 ,"!=e1 pay;ts made 0an
  9dividual "u any s* plan qualify z
  m$ical exp5ses 0virtue ( p>agraph
  #aah.b7#b77q74
#i4 ,private h1l? s]vices plan premiums1
  3tribu;ns or o!r 3sid],n pd = 0!
  employ] >e n 9clud$ z m$ical exp5ses
  (! employee "u p>agraph #aah.b7#b77q7
  0virtue ( p>agraph #aah.b7#c77b7    #f
             ,,it-#cci;,r#b          a#c
  & >e n employee b5efits 7see #a abv74
  ,!y >e h["e1 busi;s \tlays or exp5ses
  (! employ] = purposes ( p>agraph
  #ah7#a77a74 ,on ! o!r h&1 3tribu;ns or
  premiums qualify z m$ical exp5ses "u
  p>agraph #aah.b7#b77q7 ": !y >e pd
  directly 0! employee1 or >e pd 0!
  employ] \ ( deduc;ns f ! employee's
  pay4 ,! am.ts s pd m/ 2 = "o or m (
  7a7 ! employee1
  7b7 ! employee's sp\se &
  7c7 any memb] (! employee's h\sehold )
    :om ! employee is 3nect$ 0blood
    rel,n%ip1 m>riage or adop;n4









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