Individual Health Insurance – TAXATION

If you are Self EmployedWEB--Self-Employed

You can deduct the Health and Dental premiums you pay as tax deductible business expenses on your income tax return.   To qualify as a Private Health Services Plan (PHSP) by CRA you must meet certain rules and there may be limits based on your individual situation.

Check with your accountant that you qualify as self-employed, and which category of limits would apply to you.

Here is a brief list of the rules:
1.  At least 50% of your income must come from being self-employed.  Or – no more than $10,000 of your annual income comes from other than being self-employed.
2.  If  you have No Arms Length Employees – $1500/adult and $750/minor child in your household –  maximum premium deduction
3.  If you have Arms Length Employees – premiums are proportionately deductible to what you pay for health premiums for your employees

So for example – if you qualify as self employed and under rule 2.  And you have 2 adults and 2 children.  The maximum annual deduction would be:  2 x $1500:   $3000,   plus 2 x $750:  $1500
For a total annual maximum deduction of $4500.
Your deduction would be the lesser amount of either your premiums paid, or the maximum deduction available to you.

Any excess premium beyond the limit would qualify towards your medical expense tax credit.

There are more details to these rules, so it is important to consult with your accountant to see what applies to you.


The following is a document you can download that explains deductibility of health insurance premiums in more detail.



If you pay for your Health Insurance premiums, and are not self employed.
Such as Contract Worker, Part Time, Semi-Retired, Retired, or Not Employed.WEB-Employees-&-Other-1

Health and Dental premiums  can be used as a medical expense in the Medical Expense Tax Credit area of your income tax return.

So add up all the premiums and then included them as a medical expense.

It all adds up.  Adding these premiums to any medical expenses that you have paid for, that have not been reimbursed by the insurance company, under your group plan or individual health plan, can all be combined, and help you benefit from the Medical Expense Tax Credit.


Save Your Medical Receipts AND Your Health Claim Stubs Save Your Receipts

Remember to save all medical receipts (even if you file electronically) and your Health Claims Stubs.  Health Claim stubs are usually called Explanation of Benefits, or EOB, and are your insurance reimbursement explanations.

More – It all adds up
Expenses that that have not been reimbursed by the insurer, can be used as medical expenses on your personal income tax return.
These include deductibles you have paid including drug card deductibles,  the co-insurance amount you have paid out of pocket – ie. if you have paid 20% of the expense.   And amounts of claims that are over your plan maximums.


If you would life information on Individual Health Insurance plans visit Here