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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: What is a reasonable period for the submission of claims to a health care spending account following the end of a particular plan year?
Position: Generally, a grace period that does not exceed 6 months would normally be considered acceptable. However, we would be willing to accept a longer time period if it is warranted by the circumstances.
Reasons: Question of fact
Bob Naufal, CMA
XXXXXXXXXX (613) 957-2744
2003-002887
October 15, 2003
Dear XXXXXXXXXX:
Re: Health Care Spending Account
We are writing in response to your letter dated July 7, 2003, wherein you asked for our views on the maximum reasonable "grace period" for the submission of claims to a Health Care Spending Account ("HCSA") following the end of a particular plan year and whether a 24-month period would be an acceptable grace period.
Your letter refers to an advance tax ruling (Document No. 9629843) whereby the HCSA described therein qualified as a Private Health Services Plan ("PHSP"). In that situation, the HCSA contained a "60-day grace period", which allowed for claims arising in a particular year and submitted for processing within the first 60 days of the next year to be paid from the particular year's HCSA.
It is our practice to review all the facts and circumstances to determine an acceptable grace period for a particular plan. Generally, a grace period that does not exceed 6 months following a plan year would normally be considered acceptable. However, we would be willing to accept a longer time period if it is warranted by the circumstances.
The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the CCRA. Our practice is to make this disclaimer in all instances in which we provide an opinion.
We trust our comments will be of assistance.
Yours truly,
D. Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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