Meet Daniel, a seasoned financial advisor in Toronto, Ontario, who built his incorporated practice helping clients navigate investments and retirement planning. At 52, Daniel’s life changed when he underwent surgery for health issues, resulting in the need for ongoing ileostomy and colostomy pads. Balancing client meetings with managing his condition, he worried about the mounting costs of these essential supplies—not fully covered by insurance—and the tax hit from paying out-of-pocket.

Frustrated by traditional benefits’ gaps, a colleague’s tip led him to explore HSAs. Discovering Wellbytes transformed his challenge into a compliant tax strategy, ensuring CRA-approved reimbursements that eased his financial burden and let him focus on advising others.

Client Overview

Our client is an incorporated financial advisor in Ontario, running a thriving practice and earning over $200,000 per year. While he had basic insurance, it did not cover all his healthcare needs, particularly the ongoing costs for ileostomy and colostomy pads following surgery. These supplies, essential for his daily life, were initially planned to be paid out-of-pocket using after-tax dollars.

Challenge

The client was unaware that an HSA in Canada allows incorporated individuals to convert eligible healthcare expenses, like medical supplies for ileostomy and colostomy pads, into tax-free events under CRA guidelines. Without an HSA, he faced using after-tax dollars, increasing his burden in Ontario’s 45% tax bracket. This meant his $15,000 in annual expenses required over $27,000 in pre-tax earnings, compounded by compliance concerns and traditional insurance gaps. After validating with his accountant, he signed up with Wellbytes for CRA-compliant HSA claims.

Solution: Wellbytes HSA

Signing up for Wellbytes was seamless. The client:

  • Downloaded the Wellbytes app.
  • Completed the registration process in minutes.
  • Connected his bank account.
  • Began making claims without the need for a plan sponsor adjudicating them.

Under Wellbytes, he could submit claims for himself and his dependents, allowing for a smooth reimbursement process that emphasized CRA-compliant HSA claims.

Claims & Savings Breakdown

The client organized his receipts, separating insurance-covered items. He submitted 18 claims, of which 15 were approved (a few ineligible due to minor categorization errors). Financial Breakdown:

  • Total claims submitted: $15,500.
  • Claims approved: $15,000.
  • Wellbytes admin fee: $500 (for claims over $10,000).
  • HST on admin fee: $65.
  • Premium tax (2% on claims + admin fee): $310.
  • CRA RST (8% of claims): $1,200.
  • Total expenses + taxes: $2,075.
  • Total payment from corporation: $17,075.
  • Total reimbursement to personal level (tax-free): $15,000.

Savings Analysis Without an HSA

If the client had paid personally using after-tax dollars, he would need to withdraw as taxable income from his corporation. At a 45% personal tax rate, he’d require $27,273 in pre-tax earnings to net $15,000 after taxes. By using Wellbytes HSA, he saved $10,198 in taxes.

Why Every Incorporated Individual Should Have an HSA

Healthcare costs are unpredictable. With an HSA, incorporated professionals can:

  • Convert personal medical expenses into fully tax-deductible corporate expenses.
  • Pay for eligible medical costs with pre-tax dollars.
  • Reduce taxable income and optimize corporate tax planning.
  • Save thousands annually, with long-term financial benefits.

Additionally, these savings can be invested into RRSPs or TFSAs, where compounded growth can provide significant retirement benefits.

Comparison to Competitors

Most HSA providers charge 10% of claims in fees, meaning this client would have paid over $1,500 just for administrative costs with a competitor. Wellbytes provides a simple, low-cost structure based on spending tiers:

  • $250 for claims up to $5,000.
  • $350 for claims between $5,000 – $10,000.
  • $500 for claims over $10,000.

This pricing ensures seamless access to benefits without excessive fees.

Challenges in Traditional Benefits

  • Complexity & Lack of Transparency – Traditional benefits systems are difficult to navigate.
  • Limited Flexibility – Many plans don’t allow customization for individual needs.
  • Administrative Burden – HR teams struggle with manual processes and compliance.
  • High Costs – Many employees pay out-of-pocket due to coverage gaps.

How Wellbytes Simplifies Benefits

Wellbytes leverages technology to provide a modern solution:

  • Automated & Streamlined Onboarding – Employees can sign up and customize benefits in minutes.
  • Comprehensive Brokerage Portals – Advisors and resellers can seamlessly onboard companies and employees.
  • Full CRM Integration – Automates operational tasks, finance, and invoicing.
  • User-Friendly App – Simplifies claims submission and tracking.
  • AI & Automation in Claims Processing – Reduces administrative costs and ensures accuracy.

Conclusion

For incorporated professionals, an HSA is a crucial financial tool that provides tax-free savings on essential healthcare expenses. This case study highlights how one client saved over $10,000 in taxes, demonstrating the powerful benefits of Wellbytes. With its low-cost structure, easy-to-use platform, and automated claims process, Wellbytes ensures that individuals can focus on their health while optimizing their tax savings.