5 May 1997 External T.I. 9705355 - MEDICAL EXPENSES

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.

		  					970535
XXXXXXXXXX					  B.Kerr

Attention: XXXXXXXXXX

May 5, 1997

Dears Sirs:

Re: Eligible Expenses Under Subsection 118.2(2)

This is in response to your letter of February 18, 1997, concerning eligible expenses for the purposes of subsection 118.2(2) of the Income Tax Act (the "Act") and a private health services plan.

You have asked that we confirm that fees paid to a physician for a medical examination and the preparation of a report summarizing the results of the examination would be considered eligible expenses for the purposes of subsection 118.2(2) of the Act and a private health services plan.

Our Comments

Paragraph 118.2(2)(a) of the Act provides, inter alia, that for the purposes of subsection 118.2(1), an amount paid to a medical practitioner in respect of medical services provided to an individual, the individual's spouse or a dependant of the individual, is a medical expense of the individual. In our view, provided that the physician is a medical practitioner, fees for a medical examination and the report summarizing the results of that examination would be considered to be medical expenses. You should note, however, that if the individual was reimbursed, or was entitled to be reimbursed, in respect of the fees, pursuant to paragraph 118.2(3)(b) of the Act, the fees would not qualify for purposes of subsection 118.2(1) of the Act, except if they were required to be included in income and could not be deducted in computing taxable income. In this regard, we refer you to paragraph 67 of Interpretation Bulletin IT-519R, a copy of which is enclosed.

With respect to your second query, as indicated in paragraph 4 of Interpretation Bulletin IT-339R2 (a copy of which is enclosed), coverage under a private health services plan, as defined in subsection 248(1) of the Act, must be in respect of hospital or medical expenses which normally would otherwise have qualified as a medical expense under subsection 118.2(2) of the Act. Therefore, if a plan provided coverage for expenses of the nature described above, its status as a private health services plan would not be jeopardized.

We trust that these comments will be of assistance.

Yours truly,

C. Chouinard
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch