Principal Issues: Whether the fees paid for a private health plan qualify as an eligible medical expense for the purposes of the METC.
Position: It is a question of fact whether the fees would qualify as an eligible medical expense under subsection 118.2(2) of the Income Tax Act. Where an amount paid to a medical clinic can reasonably be considered a prepayment of services that are to be provided over the course of the year and the services are actually provided in that year the fees (block fees) will generally be an eligible medical expense It is also a question of fact whether a particular arrangement may satisfy the definition of a PHSP for purposes of paragraph 118.2(2)(q) of the Act. Where the plan is not considered to be a PHSP within the meaning of subsection 248(1) of the Act, the fees are not an eligible medical expense for purposes of paragraph 118.2(2)(q) of the Act.
Reasons: Payments made for the availability of medical services or certain lab and diagnostic procedures and services would not qualify as an eligible medical expense under subsection 118.2(2) of the Income Tax Act (Act). However, a block fee is an eligible medical expense for the purpose of the METC where it is paid for eligible medical expenses as described in subsection 118.2(2) of the Act. Where the plan is considered to be a PHSP within the meaning of subsection 248(1) of the Act, the fees for a private health plan may be an eligible medical expense under paragraph 118.2(2)(q) of the Act.
