Private Health Service Plans (PHSP)

At Beyond Numbers we firmly believe every small business should have some form of extended health care coverage; whether it be in the form of insurance or a PHSP.

We also believe a PHSP is a plan you should consider. Quite simply, they save you money, and that’s good. They are simple to administer, cost efficient and offer a breadth of expense coverage that would be unaffordable in a conventional insurance plan. As these plans cover actual expenses, costs you will have whether you have a plan or not, you might as well save the taxes and the money.

PHSP Concepts:

PHSP’s have been around since 1986.
There are a number of forms a plan can take depending upon the size and needs of a business.
The basic goal of a PHSP is to allow a business to expense healthcare costs without then becoming a taxable benefit to the employee.
Plans include the employee, spouse and family members living under the same roof.

How is a PHSP Different than Insurance?

PHSP’s deal with actual expenses with limits set by the business owner – payments go out only when transactions occur. Healthcare insurance is a premium paid in anticipation of a future claim. Insurance costs vary widely based upon the “risk” of coverage selected. Premiums are adjusted each year based on use and have a sales, admin and profit component.

Advantages of PHSP:

Make your family medical expenses 100% tax deductible
Reduces your business taxes
Get comprehensive coverage of expenses with few limits
They can supplement plans held by a spouse who works outside your

PHSP Plans for Small Business -

We have two plans we recommend to the small business owner.

Self-Administered PHSP*

This option has an initial up front cost to create the plan with no on-going fees. The model also has a greater level of responsibility for record keeping and document storage. This is a great long term plan for a small company.

*Please Note: This option is only available in a corporation.

Third Party PHSP

This is a popular option for a small business, with many providers in the market. Typically these plans will involve a modest up-front fee to set up the plan and charge a transactional fee; typically 10% of the expense.

The provider does most of the administration and provides a third party protection for safeguarding employee privacy. The plans are easy to set up, although this model will generally have a greater long term direct cost as compared to a self-administered plan.

Please contact us if you would like to learn more about how a PHSP can work in your business and discuss our products further.

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