Understanding Flexible “myFlex”-Style Plans in Canada

Across Canada, more employers are turning to flexible spending models because they reflect the realities of a modern workforce - diverse needs, different life stages, and evolving expectations around wellbeing.

What is a myFlex-Style Plan?

A myFlex-style plan provides an employer-funded allowance that employees allocate according to their priorities. The HSA covers CRA-eligible medical and dental expenses, and, when structured as a Private Health Services Plan (PHSP), reimbursements are generally non-taxable. The WSA covers wellness and lifestyle expenses not eligible under CRA rules, with reimbursements treated as taxable benefits. Together, these accounts offer a flexible model that supports both healthcare and overall well-being.

Health Spending Account (HSA) Basics

A Health Spending Account is an employer-funded account that reimburses eligible employees and their dependents for medical, dental, and vision expenses that qualify under CRA guidelines. When structured to meet PHSP requirements, an HSA is a tax-efficient way for employers to support health costs. Employees usually receive tax-free reimbursements, and employers can typically deduct these expenses as business costs. This approach helps organizations support employee healthcare without relying on less efficient salary increases.

An HSA often includes dental services like cleanings, fillings, and orthodontics, as well as vision care such as eye exams and prescription glasses or contact lenses. Many plans also reimburse prescription drugs and certain medical supplies, as well as professional services such as physiotherapy, chiropractic care, psychology, and registered counselling. For many employees, an HSA can also help fill gaps in traditional insured benefits, especially when coverage limits or exclusions apply.

Interested to learn more about HSAs? Please check out our blog on it!

Wellness Spending Account (WSA) Basics

A Wellness Spending Account covers wellness and lifestyle expenses not eligible under CRA rules. WSA reimbursements are generally considered taxable income and subject to payroll deductions. While WSAs do not offer the same tax advantages as HSAs, they provide flexibility, choice, and a modern approach to wellbeing that aligns with current employee priorities.

What Can a WSA Cover?

Unlike an HSA, WSAs often cover fitness and recreation expenses, mental wellness resources, and lifestyle supports such as ergonomic equipment, personal development courses, or financial coaching. This flexibility allows organizations to tailor plans to their culture and workforce needs while maintaining clear rules and consistent administration.

Interested to learn more about WSAs? Please check out our blog on it!

How a myFlex-Style Plan Works in Practice

To start, the employer provides an annual credit, and during enrollment, employees decide how to allocate funds between the HSA and WSA based on their anticipated needs. For example, those expecting medical expenses may allocate more to the HSA, while others prioritizing fitness or lifestyle may choose the WSA. Employees pay for eligible expenses, submit claims online or via mobile app, and receive approved reimbursements directly.

Key Advantages for Employees

The main advantage of myFlex-style plans for employees is personalization. Flexible spending allows individuals to address their unique needs based on life stage, health, and family responsibilities. HSAs offer tax-efficient support for medical, dental, and vision costs, while WSAs extend benefits to areas not covered by traditional plans. Understanding the differences between HSA and WSA reimbursements gives employees greater clarity and control over their benefits.

Key Advantages for Employers

For employers, these plans offer a practical way to deliver competitive benefits with predictable costs. This is because the employer sets the annual credit amount. By setting the annual credit amount, employers control spending and improve forecasting. HSAs are tax-efficient for both employees and the business, while WSAs enhance total rewards by supporting wellness.

Many organizations combine flexible spending accounts with traditional insured coverage, such as life, disability, and extended health insurance, to create a balanced, cost-effective benefits package.

Is a myFlex-Style Plan Right for Your Organization?

A myFlex-style plan is well-suited for employers seeking meaningful benefits without the risk of unpredictable premium increases. It also offers employees clear, accessible benefits that support both healthcare and overall well-being.

If you have any further questions about myFlex style plans, please don’t hesitate to contact us.