CRA considers that a self-insured health care spending account (“HCSA”) for a sole employee-shareholder likely will not qualify as a private health services plan

CRA considers that:

In a situation where a corporation provides a self-insured HCSA for its only employee who is also its sole shareholder … it is likely that the sole employee-shareholder would be reimbursed for the full amount allocated to him or her annually.

On this basis, CRA would view the arrangement as not being a plan of insurance and, thus, not a private health services plan, so that there would be a taxable benefit to the employee-shareholder, even where the benefits were comparable to those available to non-shareholder employees performing similar services for similarly-sized businesses.

Neal Armstrong. Summary of 14 September 2017 CPA Alberta Roundtable, Q.9, 2017-0703871C6 under s. 248(1) - private health services plan.