11 February 2000 External T.I. 1999-0014875 - PRIVATE HEALTH SERVICES PLAN

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: What is the requirement to have a private health services plan as set out in paragraph 7 of IT-339R2

Position: General comments as to what constitutes a PHSP

Reasons: Paragraph 7 of the bulletin should be read in context.

XXXXXXXXXX 		1999-001487
J. E. Grisé
Attention: XXXXXXXXXX 

February 11, 2000

Dear Sirs:

Re: Private Health Services Plan

This is in reply to your fax of December 16, 1999, requesting a ruling regarding the arrangements for setting up a "Private Health Services Plan" (PHSP).

As stated in paragraph 7 of Interpretation Bulletin IT-339R2, an arrangement where an employer reimburses its employees for the cost of medical or hospital care may come within the definition of "Private Health Services Plan" in subsection 248(1) of the Income Tax Act (the Act). Such a plan must also, however, meet all the requirements for a PHSP set out in the definition and discussed in the bulletin. For example, the plan must be in the nature of insurance and the coverage under the plan must be in respect of hospital care or expense or medical care or expense which normally would otherwise have qualified as a medical expense under the provisions of subsection 118.2(2) of the Act. These important aspects are set out in paragraphs 3 and 4 of the bulletin.

Should you wish to request an advance income tax ruling in respect of a specific arrangement between an employer and its employees, please refer to Information Circular 70-6R3, for the procedures to be followed. In this respect, you may be interested in Advance Tax Ruling ATR-23, dated June 14, 1987. The circular and ruling are available on our internet site at: www.ccra-adrc.gc.ca.

We hope our comments are helpful.

Yours truly,

John Oulton
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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