Your DGC Benefits Plan provides you and your family with valuable, affordable mental and physical health coverage and financial protection if you experience an illness, injury or disability. In this section, we explain how the plan works and what’s covered under each level.
A key part of the DGC Benefits Plan is the HSA. It’s like a tax-effective bank account. You decide how much money to put in from your dollar bank, and then you spend it to help pay for healthcare expenses not otherwise covered by the DGC Benefits Plan.
During each annual re-enrolment period, you can choose to transfer money from your dollar bank to your HSA. How much you transfer each year, if anything, is up to you — as long as you have the money available in your dollar bank to transfer. Keep in mind, however, that:
You can spend HSA money as you see fit. The only requirement is that you spend it on medical, prescription drug and dental-related expenses that are not covered under the plan (or any other private or government healthcare plan), but that are allowed under the Income Tax Act.
For example, if you buy a $500 pair of prescription glasses and the plan covers $300, you’d be able to claim the remaining $200 from your HSA — provided, of course, you have allocated that much to your HSA.
For example, if you incurred an expense in October 2024, but don’t have enough money left in your HSA from your 2024 deposit to cover that expense, you cannot use money deposited in your HSA for the 2025 plan year to pay for it.
ANY MONEY DEPOSITED IN YOUR HSA FOR THE PLAN YEAR… | MUST BE USED BY… |
|---|---|
2024 | December 31, 2025 |
2025 | December 31, 2026 |
2026 | December 31, 2027 |
2027 | December 31, 2028 |
Any funds not used by the deadline will be removed from your HSA and used to offset plan costs. This use-it-or-lose-it rule is a Canada Revenue Agency requirement.
When it comes to your HSA, the definition of eligible dependants is expanded. It includes your spouse and dependant children, as well as anyone who is recognized as your dependant by the Canada Revenue Agency. For example, a grandchild, parent, grandparent, brother, sister, aunt, uncle, niece or nephew of you or your spouse will qualify, provided they:
The HSA covers a long list of eligible expenses as defined under the Income Tax Act. There are literally hundreds of eligible expenses, such as:
Keep in mind, however, that to qualify as an eligible expense, the service, procedure or supply in question must be provided or prescribed by a medical practitioner who is licensed according to the laws of the province in which he or she is practicing.
For a complete list of covered expenses, refer to subsection 118.2(2) of the Income Tax Act. Additional information on many of these expenses can be found in the Income Tax Folio S1-F1-C1: Medical Expense Tax Credit.
If you can claim an expense under another plan (such as the DGC Benefits Plan, your spouse’s benefits plan or a government drug plan), you may want to do that first before submitting your claim under the HSA.
Eligible HSA expenses must be received by Canada Life within 180 days following the end of the plan year in which the expense was incurred. If your DGC Membership and health coverage ends because you resigned or were terminated, after your coverage end date, you have 90 days to submit your HSA expenses for reimbursement.
For example, if you incurred an eligible expense in October 2024, you must submit your claim by June 30, 2025. Only money deposited in your HSA for the 2023 and/or 2024 plan year can be used to pay that claim — money deposited for the 2025 plan year cannot be used.
Keep in mind that the deadlines for HSA claims are different (and shorter) than the claim deadlines for the DGC Benefits Plan’s health and dental coverage.
YEAR EXPENSE INCURRED | THIS EXPENSE CAN BE PAID USING MONEY DEPOSITED IN YOUR HSA IN… | THE DEADLINE FOR SUBMITTING THE EXPENSE TO CANADA LIFE IS… |
|---|---|---|
2024 | 2023 & 2024 | June 30, 2025 |
2025 | 2024 & 2025 | June 30, 2026 |
2026 | 2025 & 2026 | June 30, 2027 |
In addition to reducing your out-of-pocket expenses, using the HSA can help reduce your tax hit (see example below).
This is because you don’t pay income tax on the money when it is deposited or when it’s claimed from your HSA. That can make a huge difference in how much money you have available to spend on health and dental-related expenses.
For those of you who live in Quebec, the tax rules are a bit different. Any amounts claimed from your HSA will be considered a taxable benefit. You’ll sidestep the federal tax hit, but provincial income tax will apply.
The bottom line is that the HSA offers you a clear tax advantage regardless of where you live in Canada.
Example: The HSA tax advantage
Let’s say the dentist tells you that you have two cavities that will cost $500 to fill. If you have Level I coverage, the cost of filling those cavities won’t be covered under the plan. That means you have two options:
